TRANSCRIPT
slava (00:02.357)
Hello and welcome to another episode of Smart Humans. I'm super excited to have our next guest. It's actually a repeat guest for somebody that the audience has asked to come back. Kendrick Nguyen, who's the CEO and founder of Republic. Welcome back.
kendrick (00:05.396)
Thank you.
kendrick (00:19.822)
Slava, thank you so much for having me. It's really a joy to be back here speaking with you.
slava (00:25.267)
Absolutely, so just to set context, we usually start with how did you get into Alts, but you already gave us that story about two years ago. So much has changed, so much has evolved, but can you imagine that two years ago we weren't even talking about AI. Open AI did not even yet start to the public. So tell me, how has AI and all these things changed your world or impacted the things that you're working on these days?
kendrick (00:51.598)
Slava, I mean, first it's hard to even remember what things were like two years ago, right? March 2022. I think the market was still amazing back then. Definitely AI wasn't on everyone's mind. I think crypto was at the last all time high. And now fast forward two years. What an incredible challenging for many, including for us two years. But AI in particular, I think it has become...
so core to our operating activities within each team, each division, so much slava that at Republic there's a soft mandate that you gotta become more cost efficient by at least 33 % within each team, each division by leveraging AI. How each team does it is different, but I can tell you that from following up, drafting email, research, things that I'm doing now day to day,
much, much more efficient than a year and a half ago before chat GPT, to be honest, is still my go -to tool. But that's just the baseline, right?
slava (01:56.021)
Do you have an example or two, I know you mentioned generically, but how you're actually or one of your employees is tangibly using any of these AI things to improve the efficiency?
kendrick (02:14.158)
I'll give you an example. I do a lot of planning through talking things out loud, obviously, oftentimes with a team, but even just myself, like thinking, structuring. And there's an app that I use called Quill, Q -U -I -L -L. I actually don't think it's public or has formally launched just yet. I'm one of their beta users. And I just turn that on. It's not recorded anywhere in my full control to delete and remove.
But after, say, an hour meeting with the team, it can dish out several iterations of templates, summaries in various forms, including if I need to send a partner a follow -up email encapsulating our conversation. All of that can be done literally in like minutes, tens of seconds compared to a year and a half ago.
Kendrick would be like sitting there typing everything up and that would take me at least a couple hours, right? So that's just one small instance, one example of how for someone like me, so much of my days about planning, strategizing, and then following up, sharing that information, I mean, it is just game changing in terms of efficiency.
slava (03:24.213)
That's an amazing example. I'm definitely have to check that out. What other, you know, you had this great quote when we spoke last time, which is, you know, failure is what leads to the learning. And I imagine over the last two years with AI and the ups and downs in the markets, there's been opportunities for let's call it learnings.
So is there any like, can you give us a highlight or two of the last two years of some learnings that have happened?
kendrick (04:00.878)
I have so many, but where do I begin? So we are a Web3 financial firm after all. Republic we know for a lot of things, but decidedly a Web3 leaning financial firm and financial infrastructure. That means a couple of things. Let's see two years ago on our balance sheet, we sat on digital assets, securities, and at a very decent valuation.
We felt really good about ourselves, right? And then fast forward 18 months through the depth crypto winter, learning really about capital efficiency, about turning non -cash assets into cash, and even just having a more measured approach, a mindset towards looking at what we have today, meaning that now obviously,
crypto market seems to be picking up beyond anyone's expectation, even just compared to three, four months ago. But we have a much more modest, humble, conservative, or cautious view as to the value of these assets on our balance sheet. We don't look at just what's being trading in the market to say that, oh my God, we're doing so well. And conversely, if things
crash tomorrow. We're also not going to have like the same anxiety and the more reactive approach that we perhaps did have 18 months ago. So through a winter I think it makes everyone stronger, more resilient and that's definitely the case for me and the team.
slava (05:34.421)
Yeah, a lot of the best companies really come out of some winters, right? When the markets are tough is really where a lot of build happens. What have been some of the things that your company's been focused on in terms of building at that time over the last two years? And we'll go into the details about some of your exciting new projects, but...
infrastructureally, what were you all building?
kendrick (06:07.276)
You know, first though, I want to touch on that remark that you just made. And I think I'm going to do a very poor job at quoting our mutual friend, Jenny Fielding, the GP at Everywhere Fund. She had this incredible tweet a while back, maybe a month or two ago, probably late last year, when the economy and then things were pretty glim or much, much, much more, you know, the markets weren't nearly as strong. And I think she was saying something along the line of.
you're gonna, if you have more money during that product market fit assessment, it's gonna take you just twice as long to learn the same lessons if you have twice the amount of money. So another way of saying that is that during a phase when you have to deal with extreme capital efficiency, that's when a team, an individual, a leader, a product manager, an engineer should train.
and get themselves into the most optimal state of efficiency. And I think that those have managed to survive 2022, 2023. And I know that there were thousands of companies that didn't make it, but those that did and now emerge out of this winter, there's no question in my mind that naturally everyone, it's just a better quality in terms of what's in the market. And Slava, can you...
share the question you asked me before I wean off on that side remark there.
slava (07:35.797)
No, just the idea of where did you focus as part of trying to create more efficiency, but it's okay. We're gonna double click on that in a few minutes anyway. So I totally agree with you in regards to the Jenny Fielding quote, because whether it's meeting time or spending money, it's really the same. You will use as much as you have. So if you have an hour for a meeting, they'll spend an hour for the meeting. But if there's only 15 minutes for that meeting,
you'll somehow get to the results in 15 minutes. And the same is with $10 million or a million dollars. If you have to figure it out, you figure it out. Constraints are a good thing. So would you agree with that?
kendrick (08:12.814)
I love it.
kendrick (08:16.686)
I love that comparison, I'm gonna weave that. I agree completely, I haven't heard anyone putting meeting time, and amount of cash available for a project, as an analogy, but I agree 100%. And I think I'm trying to keep most meetings, not all, at a 15 minute, 20 minute length for that exact reason, but 100 % on the same page.
slava (08:42.901)
Yeah, if you think about it, time is the most valuable asset. So it's kind of like cash. So moving on, you mentioned about Crypto Winter. So I'm gonna probably blow your mind here a little bit. And also the listeners, the last time you were on, approximately two years ago, I asked you for two predictions as to what were, you know, asset, I asked you for one prediction, you gave us two, which is, you know, what would you invest in three years out? So now we're two years out from that prediction. And you said Bitcoin, as well as Amazon.
So Bitcoin at the time was $26 ,000. And those that are listening today, it's at an all time high of $73 ,000. Yes. And Amazon was about $110 and now it's around $175. So let's call it a solid 50 % up. So, you know, what's other examples of like, why did you have that belief in those things at that time? Obviously Bitcoin and Amazon are two completely different things.
kendrick (09:15.022)
Yes!
slava (09:37.631)
But why believe in those things and how it's evolved over the last two years?
kendrick (09:45.102)
And two years ago, we hadn't been able to launch our own Republic Note token. That's why that wasn't one of the predictions. And that definitely would be one of the choices if I were to make one today. But I very much am a believer in this technology that is distributed ledger technology and how it's going to change our aspect of the financial market.
But when it comes to looking at it as an asset class, the space hinges on retail adoption, more and more people coming to participate in this space. You know, if you go back to like the 90s, one of the reasons why people think that the first tech crash in early 2000 or late 90s, I've read somewhere, is that the rate of adoption of the internet at the time globally, very, very low.
And then as years went by, through the past 20 years, it becomes internet is pretty much virtual. I mean, everywhere, global adoption. That has enabled to weather certain events that otherwise would have led to another massive tech bust. But nonetheless, the market became more resilient. So if you look at that, what is the first thing that a person who now decides they want to
buy something in this quote unquote crypto space is going to be Bitcoin. So that's just basically the gateway, the entry, the first asset, the first thing that I think by and large, if not everyone, probably 90 plus percent of newcomer, that's where they're going to put their first $10 in. And because of that, with a limited supply, that's my conviction that even today at an all time high, I believe.
that certainly Bitcoin is going to be one of the asset choices for me anyhow to hold long term. Amazon, given that Republic's...
slava (11:49.621)
Where can Bitcoin be ten... Oh, sorry.
kendrick (11:57.014)
No, please, Slava.
slava (11:58.485)
Sorry about that. No, no, no, go for it on Amazon.
kendrick (12:05.834)
Yeah, no, I, there's a little bit of a sound quality disruption. So I'm like fading in and out from your side. I can only hear about every few seconds or so. How's my sound quality coming through Slava? Good.
slava (12:19.029)
You're coming through great.
kendrick (12:24.718)
Okay, great. Sorry, because it seems like it's coming through great on my end, but on your side, there's a little bit of a delay somehow. But sorry, your question again, if you don't mind.
slava (12:35.573)
Yeah, just you were bullish on Amazon. What were you thinking when you were bullish on Amazon and where are your thoughts on that today?
kendrick (12:49.13)
Amazon is also a story of adoption. You know, now that people know that we have a robust operation in Europe, in London, to be specific. And Republic is, I think today is the only cross -Atlantic investment platform. But I'm in London a lot, right? We have a large team there. And it's incredible. You know, 10 years ago, people weren't ordering.
things on Amazon in the UK. I mean, I was there and it wasn't a thing. And now they manage to turn that market into almost as strong in terms of adoption of their product as they have here in the US. So based on just seeing how Amazon's capability to continue to grow in terms of market size as a global marketplace, I think that's one of the reasons why two years ago it was one of the...
top choices for me. And I think that may still continue. I think marketplace is heavily competitive. It's a very crowded space. But for us, one of our North Star is to become the Amazon for private investing, you know, global and accessible to the retail public. So maybe that's also a side reason why I picked Amazon as an investment choice, again, for me.
slava (14:12.053)
And then the last question related to our interview from before, but you mentioned you were gonna try to read the Goldman Sachs book, The Partnership, but it was like 700 pages or something. So there was Vegas odds, you know, whether or not that was ever gonna be read. So did it go over or under? Was it read more than 20 pages or it wasn't able to happen?
kendrick (14:37.294)
It was read, I think, about 20 to 30 pages. But now that you've reminded me, I'm going to leverage ChatGPT. I'm going to ask it to dish out a 20 -page summary of the 700 -page book. And I guarantee you, next time we talk, you would not know that I didn't, in fact, read and memorize the book, because probably all of the salient points would be captured. And again, the power of AI and efficiency.
slava (15:06.389)
Amazing, amazing. So switching topics, what do you think of today's market? That's a very open -ended question. Take it wherever you want. Just run with it, whether it's the macro economy, the public markets, the private markets, the crypto markets, take it wherever you'd like.
kendrick (15:06.83)
the
kendrick (15:15.456)
Oof. Yeah.
kendrick (15:26.734)
You know, through each winter and summer, through each market cycle that one has survived or gone through, if there's one thing again is to not overreact, right? To not be overly exuberant or overly gloomy, gloom and doom, truly where the market is right now or the markets plural, the public equity market, the crypto market, venture private equity.
Just even four months ago, November, October, the beginning of Q4 of 2023, I don't think anyone could have predicted how solid, robust, warm, whatever term you wanna use to describe the market now entering the tail end of Q1, 24. I'm optimistic on at the very least that on a level of stability.
that you're probably not going to see a major crash, that this somehow is a one quarter moment in time type thing and it is going to get back to early 2023 levels. So I'm hoping and estimating or guesstimating a degree of stability. How much frothier or how much stronger, how much growth one can expect to see in any of these markets, that's truly
you know, above my pay grade and beyond my expertise to predict. If things grow stronger, incredible for us as a firm and for many builders and operators in FinTech and the industry. If things stay more or less where they are right now, still amazing, still beyond my wildest expectation last summer. And you know, if things go awfully wrong, that is if the market crashes by more than 50%.
We're very well prepared, having lasted through a winter, and it teaches us that even in a proverbial economic nuclear fallout, a republic is going to emerge like a cockroach 30 years out of need.
slava (17:34.901)
Nice, emerging like a cockroach. I love it. It's gonna exist forever. So let's transition to Republic. Give the audience some color. I know when we last spoke, you were already starting to distribute billions of dollars around the world processing and obviously managing a lot of money. You now have two more years behind you. Give us a sense of scale and some of the awesome stats.
kendrick (18:01.162)
Two years ago, we had plans to become a global firm, but these were just plans at the time. Fast forward two years, now we run and own one of the largest investment operations in Europe with the base in London, formerly known as Cedars and now known as Republic Europe. We own a significant stake in a large investment platform out in the Far East, South Korea.
And the plan is in due time to integrate that even more as well. We now have team members. You know, for example, as the result of the war in Ukraine, we overnight had many team members residing, living in the Middle East, in the UAE. And that, in a way, opened the door to our prioritization of the region.
our expansion plans into the GCC. So there's no doubt that in the past two years, we have indeed executed on our goal of becoming the first cross border private investment platform and bridge the regulatory rail and the product rail as well. We have managed to incubate it and spun out two startups and now they are strong, robust.
businesses, EveryRAM led by founder and CEO Janine Uriel and Brassica led by founder and CEO Young -Roe Lee. Brassica just got acquired by Bitgold and I think that's in the news about a month ago, which is kudos to Young -Roe and the team there. So that's another aspect of our growth in the past two years. But I think the biggest and the most valuable component.
that we managed to have built that contributes to Republic as an enterprise is the infrastructure that enables us to digitize any asset, revenue stream, real estate, cap table of a company, and then the legal framework to enable the distribution and facilitation and sale and giving and trading of these.
kendrick (20:22.484)
digital securities. So Republic today, first and foremost, is a investment infrastructure firm. You know, when people think of Amazon, they oftentimes may not think of AWS, particularly if they're the retail public. But in many ways, the core of Amazon on the one hand is an e -commerce infrastructure, and obviously the cloud storage platform AWS. For us, the core of Amazon is the
core of what we do is not what the public sees. It's an e -finance infrastructure that is cross -border, retail -focused, and increasingly with secondary liquidity. So on top of that infrastructure, you may see real estate one day in one market. You may see tech companies in London and New York, but in Qatar, you may see coffee shops doing business on revenue sharing. That infrastructure,
has grown tremendously, the Republic e -finance infrastructure, I believe has grown to become one of a kind in the market and will be stronger yet. But that's something that has really resonated with our investors, the backers in Republic, but we really hope that this year you're gonna see us supporting with this infrastructure some household name, like it may be.
Hopefully the 49ers or Lady Gaga's next music financing album, whatever it may be, these are hypothetical scenarios here, but we think that we're ready for truly the global stage and enabling the retail public everywhere.
slava (21:50.869)
But if it may be, we have a whole series of scenarios here, but I can do things with that.
slava (22:01.973)
I love it. Digitize any asset that's like so sharp. So the 49ers or Lady Gaga sound like amazing aspirations in terms of working with them to be able to get loyalty through shareholders. But can you share with us any of the actual high level stats? You know, you mentioned backers, like how many backers are we talking about today? I know it's a lot or.
How many dollars are going through the platform, through the audience? Can you just give a sense? Because I know you're totally global now and a very large organization. So it'd be great for the audience to know.
kendrick (22:42.35)
I knew the larger stat across the entire ecosystem, Slava, counting everything that we do, which is including private syndication, which is taking in accredited investors and funnel them through SPVs, but at a higher dollar amount. That's one arm of what we do. Another arm is obviously the retail financing in the US, in the UK and beyond. But across everything that we do, we now have more than 2 ,000 portfolio companies.
of a wide variety and we have an upside interest in almost all of them, or I think in all of them. And more than $3 billion has been deployed through various form and pocket of the ecosystem into these 2000 plus companies and counting. Every week we obviously close more and more and more deals. So the entire ecosystem of users have gone through...
some varying degrees of KYC, I mean, I was also, I think, crossed the three million mark, but none of this is by any means success or reaching some level of maturation. I think quite the contrary. I think we're still so early in this next era of retail -focused finance that really is not as successful for us, for the industry, until the number of retail investors reaches the billions, right? So I think we're...
probably still has a growth trajectory of like a thousand X or more. Now it's a growth trajectory. I'm not saying that we definitely or that I'm like hyper confident that we will achieve on it. I think we have a path to that. I'm just speaking to the addressable market and where a company like Republic and other people building in FinTech can look at, I think it's gonna be probably among the largest.
growth in share market size that anyone has ever seen. Maybe space tech is the only one that I can imagine to have a potentially larger addressable market than digitized finance.
slava (24:52.489)
Nice, so 3 ,000, sorry, 3 million members today and looking to try to get up to a billion or more. I know that you're innovating with lots of amazing assets and products along the way. And you mentioned the Republic Note briefly. I would love to hear more about the Republic Note, because I think it's a great segue. You mentioned 2 ,000 portfolio companies, 2 ,000 companies in your portfolio, and I believe you have up -sided many of them.
So the Republic Note is just a brilliant way to package that all up. Can you give us more color on that?
kendrick (25:29.678)
Slava, if I may touch on the billion KPI for less anyone thinks that well, you know, what wildly unfounded ambitious thing to say and detached from reality. You know, let's see Taylor Swift the next song or the next album that she's willing to allow her fans to invest and have an economic upside on a digitized basis.
And only when it's done on a digitized basis, you can accommodate a dollar investment. Okay? So assuming, and there's no question in my mind that this future is going to come across all industry, but let's just make Taylor Swift. If she were to allow fans around the world to invest a dollar, not 10 ,000, not 100, a dollar, how many do you think, and obviously to do that, she got to use Republic to facilitate.
How many new users would we acquire overnight just by supporting Taylor Swift, Man City, Manchester United, a cricket league in Pakistan or India? I know nothing about cricket, but I've heard there's like, you know, in and in and by itself, like nations in terms of like fandoms. So quite realistic to get everyone to become a stakeholder here.
and that's through passion, entertainment, and sports. Moving on to your question though about the Republic Note. You know the note, I think as we discussed last time, is meant to be a product that if you hold a single note, you're gonna share a little tiny bit in the success of every company that touches Republic because Republic itself has an upside interest in
slava (27:04.149)
you know the note, uh, as we discussed last time, is meant to be of a product that if not all, a single product, you're gonna share.
kendrick (27:25.454)
each and every of the portfolio companies that come and raise throughout ecosystem. The promise of the note here is that whenever a company sees a positive exit, we receive a cash proceeds from that event. And a portion of that is gonna go back into this pool that's gonna keep getting sent out. I think the example that I used last time was also Amazon imagine in the early 90s, Amazon had a token.
that captures 10 % of their revenue on a perpetual basis and at the end of each year, they'll send back that cash out. It would be tremendously difficult to quantify the value of such an instrument back in the early 90s, but needless to say, I would have put all of my savings in Amazon stock back then and in any such instrument. Now, that is not the way.
for anyone to invest in anything and certainly not the Republic Note. But we very much hope that this is a product, a financial product, that mimics and captures the growth and success of not just Republic as a firm, but the entire ecosystem. So that if you hold a single note, and later on, one of our portfolio companies goes public on the New York Stock Exchange, and it's headline news in the Financial Times.
you know that it has something to do with you. It may be a fraction of a cent in interest, but you feel connected, related to the world that's happening around you. And I think that has always been the purpose behind this Republic Note financial product. But now it's live in the very early phase. Still beta testing on a few things, but very much live and able to be purchased and sold. On INX, I should share.
slava (28:55.957)
And how?
slava (29:18.869)
And how do I buy the Republic Note? What's the minimum? Am I able to buy and sell it? Can you give me some of the mechanics?
kendrick (29:28.75)
Yes, given that this is a financial product and I'm obviously the CEO of a company that issues the instrument, I want to be extra careful in not making any overly robust statement here. I think the easiest way is if you Google INX, like literally INX exchange, that is the trading platform, our exclusive partner on which the note token as a digital security.
is currently being offer listed, tradable and sellable 24 -7. So it's a live market, better than a public stock market in that it's truly 24 -7 with the degree of volatility. Highly recommended you read up on the risk, on how the process works and decide for yourself whether or not this is something that you want to spend a dollar or 50 cents to dabble with.
slava (30:29.173)
Amazing, and just for people to understand, a company's IPO and then you can buy and sell those stocks like on NASDAQ or New York Stock Exchange, what's the difference between an IPO and the Republic Note?
kendrick (30:49.774)
Well, an IPO or a public equity, a public company stock simply for the end user means you don't have to be very high net worth to be able to purchase the equity, the securities, and then you'll be able to sell them this liquidity around it. If just based on that from the user experience, the plan is in due time, I think the line,
between private markets and public markets will blur for the end users. The regulatory framework behind that, how certain private companies like Republic can present securities to the public market without going through the huge expenses and the inefficiency, but also the protection of a truly publicly.
Listed company like Apple and Microsoft. That's probably for a very in -depth legal deep dive in due time But I compared to like, you know a guy with a mullet which is like simple upfront hopefully for the end users and very complicated and ugly in the back and probably is not is not not great to showcase but but it is indeed jokes aside a very very
difficult, nuanced, expensive undertaking to build. And that's precisely what I describe as e -finance infrastructure. How do you make the private markets outside of Republic today? No liquidity, you need a lot of money to participate, and it gotta be country and country specific, meaning people in the US can only buy securities in the US, people in London can only buy securities in the EU and the UK.
and the infrastructure that we have been building and we've gone quite far functional, there's a lot more to come. But to make that infrastructure to accommodate a tiny amount of fractionalized interest with liquidity on a cross border basis applicable to a wide array of industry. And that's where Republic, I believe, is at the forefront. But...
slava (33:02.517)
And just to confirm the upside that the Republic Note investor would get is both the underlying portfolio assets as well as Republic as the parents. Is that right? Or is it only the underlying assets?
kendrick (33:09.512)
We're only as good as the trust and the confidence of the retail public here.
kendrick (33:31.266)
Yes, so the Republic Note captures a revenue stream that Republic will be receiving from this growing basket of portfolio companies. So it is a portion of the revenue that Republic Parent Co. derives from the success of the companies that have gone through Republic to fundraise. And that's on an evergreen basis.
So the two are the same. And because of the complexities around this, I definitely would want to direct any listener who may be interested in the notes to read up on the information on republic.com/note before you make any investment so that you know all the relevant facts and what we do commit to.
slava (34:22.677)
Yeah. So for disclosure, we're not providing investment advice. Any listeners should definitely go and read on their own to make sure they understand all of the facts. That said, even from my own brain, just to simplify it down. And I know it's much more complicated than this. I love your mullet example. Only Ken can bring a mullet into a podcast. But is it simplified down to a very innovative way to do an IPO? It's not truly an IPO because that's not actually what it is.
But is that really at its simplified world? What it is, is a massively creative, innovative way of doing an IPO.
kendrick (35:03.758)
It is not a formal initial public offering as defined by the markets and as naturally or commonly known, but it is a process whereby the general public will have access to this particular securities and the ability to sell and trade it. I think down the road, the hope is that companies will go on Republic before they go public.
slava (35:10.643)
Absolutely.
kendrick (35:31.212)
and some which is basically enable liquidity through the Republic infrastructure and may not ever touch the public market again for smaller businesses. But yes, the value proposition is to make private securities widely accessible to the general public at a global basis. Compliantly, I should say.
slava (35:52.501)
Yeah, and I've known you now, yeah, compliantly. I've known you now for over a decade, and I must say, Republic, under your leadership, it's just hands down the special sauce, which is the ability to navigate the complexity of legal and finance and compliance to create innovation with technology and product, which so many people are afraid of.
and you not only are not afraid of it, you just take it on as your special sauce. So would you agree with that?
kendrick (36:30.542)
You're far too kind. Thank you very much. But I do think that you're being too generous. I think if just one thing, looking back, that we have stood out and ended up things working in our favor is perhaps a little bit of a crazy insistence in building this model. And it is hard and expensive and distracting. And there's so many, almost every single week, things another.
examination or an audit from some state regulator as an example. But it is because it seems too daunting that we're lucky that not too many people want to just keep on driving at it. And I think that that kind of like the insistent or whether you call it perseverance or whatnot, we ended up now as a, you know, an N1 in the market. But I really hope that the entire e -finance stack.
will be commoditized later on similar to e -commerce, heavily commoditized everywhere and that really is the hope here, not so that we have some weird monopoly around this infrastructure.
slava (37:37.301)
Great. You know, you mentioned a phrase which is passion, entertainment, and sports, which is super interesting. And most of those have big audiences where there's lots of individuals who care. You mentioned the 49ers, Lady Gaga, Taylor Swift, cricket, Manchester United, all kinds of amazing teams. And you've created this new concept called share drops, right? To try to get...
these folks to be able to participate in the upside, the loyalty, etc. Can you just Can you share can you just share can you just share with me what is ShareDrops and what's the future there?
kendrick (38:13.39)
absolutely the term share drop is a play on airdrop, right, which is in the crypto industry. Airdrop means issuers of projects, literally giving away tokens to the issue, just to like build a community. And a lot of these things are securities, even if they believe that the tokens are not, but that's the term airdrop, very, very commonly used.
Share drop here's the notion that let's pick the next Uber or Airbnb. Oh, you know what? Let's pick Uber itself. Go back in time a little bit 2015 and just a few years, four or five years before Uber going public. See Uber wanted to give away, not asking the drivers to buy, just want to give away a share each for any driver who's been driving for
more than a year, or have done more than a hundred trips. And this is a way to say thanks to the community. It's also a way to retain the loyalty of the most important user base of the business. The process of giving away securities is what we call share drop. And there's no question in my mind that down the road, you walk into a coffee shop and it may be that,
they will allow you to either make a small investment or that after, you know, similar to like the Starbucks cart and the Malish point, but now it's like a true stake in that business. So the notion of giving away equities upside to users, to fans, is a regulated process as the securities offering in the US and that's the share dropped financial product, so to speak.
slava (40:06.965)
Awesome, so Reddit is about to go IPO and they have some power users. My understanding is that they're giving some shares to those power users. So would you call that a share drop as well in like, you know, in terminology?
kendrick (40:24.302)
I really gotta ping Alexis Ohanian, the founder of Reddit and an advisor of ours, let yourself slava, so that I need to learn more on how Republic can support Reddit's effort to do so. To my knowledge, there's no easy way to do that without a compliant.
framework and a product framework to manage the community. And we are uniquely, if not singularly, capable of doing that. But indeed, I'm so glad to hear that that may very well be the case. But I think that sets an example for the future companies that are looking at going public and wanting to give the most loyal customer base.
potential upside even if it's just a nominal thing people just want to feel that they belong and they're rewarded as such and Yeah, that does a that's an example of going on Republic before you go public
slava (41:29.565)
All right, awesome. And then what else would you want to cover in regards to equity crowdfunding or the rest of your business in terms of the latest innovations or what's happening?
kendrick (41:42.318)
Probably, when it comes to equity crowdfunding, I think I probably have the desire to have a new term in place that that word, equity crowdfunding, has come to define the entire industry. And unfortunately, because the retail public, the general public, the people I think have less than like 10 seconds of attention span nowadays. So you gotta, I think equity crowdfunding is so misunderstood.
it defines the earliest phase of this industry, which is enabling the company to take in retail public as investors. It doesn't speak to secondary trading. It doesn't speak to the community management aspect of it. It certainly doesn't speak to the cross -border need for enterprises that have a global presence. So it's truly about retail investing, isn't it? That's primary and secondary offering.
But that's very much, again, the e -finance infrastructure that we're aiming to build. What businesses you add on top of that in Republic launched eight years ago, nearly eight years ago, focusing on tech, the binary venture deals. And that will always be a strong component of what we do. But have no doubt, you're going to see revenue sharing, sports and entertainment, real estate in more and more market. So...
I think equity crowdfunding largely defy, encapsulate that which we aim to do, but it should be a lot more, much, much more than tech binary venture style investing for the general public.
slava (43:24.565)
So, segueing off of that, two, three years from now when I have you back on again, what's Republic gonna look like? What's your predictions?
kendrick (43:37.134)
who definitely would be in, I would hope by then, have crossed into at least three continents, I would say four, three years from now, right? All right, we should, our legal infrastructure should be operating in at least four continents, which is, you know, pretty much four out of five, right? And we should have had more than one global...
household brand like the 49ers, like the Taylor Swift of the world, leveraging our infrastructure to engage their global fan base. And those fans will be able to trade and sell and buy the interest in these brands, uh, compliantly through the Republic infrastructure. So retail, secondary, liquidity, cross -border.
and enabling supporting at least a few brands that everyone would recognize is the prediction that would have for the firm.
slava (44:42.709)
I love it. I love it. So transitioning from that, let's talk about the next book that you're not going to read. So what is it that you've been watching? What is it that you like to read? What is it that you like to listen to? How can we be more like Ken? So to try to copy some of the information sources that you're getting. Anything you recommend?
kendrick (44:54.67)
Hahaha!
kendrick (45:08.942)
I promise this is not an effort to butter you or our other advisors up, but I think I've come to realize that it's very unlikely that I'm going to be able to commit to reading any set of books anytime soon. And truthfully, the insight and the self -learning that I have...
if any, that I have had over the past few years, I think have all come from the interactions, the lunches, the meetings, the Zoom calls that I have had with friends and personal advisors who are just leaders in their space and the insight that they provide and combining it together. So unlike last time that I had committed to reading the...
the partnership, the story of Goldman Sachs book, I won't make that mistake again. And if I do end up reading a book, I'll let you know, or a lengthy book, I'll let you know, but I think my focus is to find more time, more space to really engage and learn with what is a powerful network of friends and advisor that I feel very, very fortunate and grateful to have had and built and hopefully to maintain in the years to come.
slava (46:31.309)
Awesome, we haven't had that answer before. And the final question, like you told us before, which was Bitcoin and Amazon about two years ago, the final question is today, what would be your suggestion as to what you would invest into for three years out? It could be anything you want, the more specific you can say, the better.
kendrick (46:55.822)
I'll have three. May I offer three? It would definitely be the Republic Note. Obviously, I'm a major, major believer in Republic, what we're building, needless to say. The second one would be Bitcoin again. And the third one would be AMD.
slava (46:56.277)
Sure. Well, you were two for two last time, so if you could be three for three, the audience will be happy.
kendrick (47:22.552)
And if I may provide an explanation as to why AMD, which people would think like, what is this, you know, dated brand, semiconductor brand, Nvidia, obviously, has, is top of mind when it comes to AI and dominating that market. I think AMD is very understated and may potentially give...
Nvidia a run for its money. So again, this is what I would do for myself and my personal portfolio. How about this? To make sure that it is really not investment advice. These are actually three positions that Kendrick personally is exposed to in this particular moment. And I plan to hold them long term for years to come. So I'm just sharing with you what I'm doing for myself.
I'm not in any way suggesting or making recommendations for anyone else to do anything.
slava (48:21.653)
And if anybody would know how to thread the line legally and compliantly, it is you, so thank you. This has been an absolutely amazing conversation. And just to summarize, we've covered so many topics from recommending Quill as an app to create summary notes and others, to being able to navigate the winter, to be able to use it as a time for building. You know, you mentioned Bitcoin is a gateway for crypto, which is amazing in such a short, concise line.
You're not looking at a hard landing for the economy, which is great. You've been going global. You're focusing on digitizing assets. You know, you have a massive organization already, yet you think you're just in the very beginning of the process. Over 2000 portfolio companies, $3 billion deployed across the organization, three million members and growing passion, entertainment and sports from the Niners, Lady Gaga, Taylor Swift, cricket, Manchester United. One of them will soon hopefully be using Republic.
And obviously then there's the Republic Notes, which is very exciting. I love the idea of being able to go public, sorry, to go on Republic before you go public. And capturing that in the Republic Note is a great way to get that. Obviously, as you say, you are an N of one now tackling these challenges, trying to commoditize the e -finance stack, and that is super difficult to accomplish. ShareDrops sounds awesome.
Some organizations have tried to do it on their own, whether it be Reddit or others, and now you're looking to be able to do it for anyone. You're about eight years old now, yet you have huge aspirations for the future, including being on almost every continent. And of course you finished with some great nuggets, which is, you know, people are probably the best source and that's where you're focusing on in meetings and lunches. And you gave us the Republic Note, Bitcoin and AMD. So thank you, Kendrick.
kendrick (50:13.134)
Thank you Slava for making me sound more thoughtful than I really am. And if I'm lucky enough to go on your podcast again, I may show up with a mullet. So that's a soft commitment or a threat. Thank you so much for having me. It's really such a pleasure and an honor.
slava (50:24.149)
I like it. I like it. I like it. Perfect.
