all right. Thank you so much. For 20 into forward Thinking Founders, this is the podcast will be highlight. Undiscovered talent. We're scanning. Why Combinator, Pioneer Product Hunt Twitter, Indie hackers, all these different networks to find really interesting founders and interesting projects and start ups. And we feature them on the podcast before you've probably heard it, any of them and that what's great about this is you get to follow along on the journey as they become more and more successful and say I knew them when? So thank you so much opportunity in the foreword Thinking Founders and let's get into our next founder You haven't heard of. But you will. All right. How's it going? Everyone?

Welcome to another episode of forward thinking founders. But we talk to founders about their company. Is their visions for the future and have a to collide today. I'm very excited to be talking to you, Daniel dealer who is the creator of paper chain. Welcome to the show. How's it going?

Hey, man, How you doing? I'm doing good. Good,

glad. Glad to hear I'm doing well as well. Just had a great day. Looking forward to talking to you about paper chain for people that don't know what paper chain is. Can you talk about what you're working on? Yeah,

sure. Disposed. Basic paper chain is the fastest and easiest way for creators to access their streaming revenue. So we work directly with that. The moon with record labels and artists. And we connect to that streaming feeds from Spotify or YouTube or Apple. We take all their streaming data, price it so we could see how much money they're making every day. And then we can advance any portion of that under Matt.

So can you talk about this? Is, like, super interesting to make. And I used to be a musician and singer songwriter, and then Spotify happened in streaming happened and everything. Shame that. Can you talk about Like what? What was it like before you started paper Jane? And then what? What now? Does paper chain enable artist to do Or it gets or just like what? What's the augmentation with paper? Chain just kind of got to give an idea of the market and how it works.

Yeah, sure. I think you know. I mean, this is an ongoing problem that's existed before even digital streaming came around. What Streaming has done is really just exacerbated some of the catch issues in the industry. So if you think about it, what streaming occurred in the way a change consumption it is. Distribution is now you. You can listen to anything at the touch of your fingertips. You can stream anything, whether it's on Spotify, it's on YouTube. It's all available to you and those marker transactions. Stop building up happening every single day. So you had this big shift in the way consumption heard, but the revenue and the payments model did it change.

So while you're at least large volumes of micro transactions occurring every day, it still takes around three months for that revenue from those transactions to get paid to a record label, it then takes 3 to 6 or even nine months to get paid to. The artists or artists is still on sick for nine months. World see contracts to get one check a year. That element hasn't changed, but the data that makes up the revenue model all those transaction that is available every day. So for us, it was just simply matter while we have the data that proves that revenue is generated. How do we then turn that into some sort of asset that could be connected to financial systems and be able to create some financial product off the back of that? Um, and that's really what we're trying to solve here is how does how do artists and how did out of operate in the morning music industry me out to access liquidity and financial products that enable them to either remain independent or just simply labeled them to survive in a way that is sustainable and supports future growth in the industry?

So how did you get into this? This is like, Were you a musician or have you Have you worked in the industry or like, Why did you decide to tackle this problem? Which I will admit it is a pretty gnarly problem. So how'd you get into this?

There's a couple of ways like steps that we got for us to get here of. My story is I used to be a sound engineer. Mrs. Back in Australia, I worked in music studios so that in film and TV, so I was away. Working studios off some of the pain points around collecting session information and then artist getting paid off the back of that. That was always a challenge. And then I'm moved into data and analytics. And so I was always fascinated the company I was working with. Back in Australia, we were working with a large watch brand telecommunication companies and banks and basically tracking all of the media, spend media performance like ad clicks and things like that, and then building attribution models and telling them where to shift that budgets. And I was always fascinated by how much data they collected and how every decision they made around barking expend was based on historical performance. And that just didn't occur in the music industry. Eso I was fascinated because music industry is full of data now.

But the day the data points were being used in the same way, um so initially it was just working around, You know, being aware of the challenges around payments is like will happen. We use this data to make it easier for us to get paid. Thea, other part off the story goes back even longer, like that was about 10 years ago, and I first started working on this in mid 2016. Another part of the origin story goes back even 25 years ago, where one of my co founders here in New York, started his own record label. And when he started that label, he wanted to pay his artist every two weeks to get them on the same Kate. It says people who worked at the label, which wasn't being done at the time,

typically on six month world, see contracts. So to do that, he built his own world see accounting software by for in 2000 for he wound his record label down. But there was enough interest from other labels in the realty accounting software that he started selling that started selling as fast model to other labels and ended up at the onset of digital, ingesting all the iTunes statements and doing the End Run Realty reported for thousands of label brands. When I first met him in 2012 he was leaving that business, but the biggest challenge was around cash flow because what like, as I mentioned earlier, consumption had changed completely, but the revenue and payments had changed. It also even in 2012 we talked about this idea how to use the sales data to create like a micro factoring model s. So there was some gaps in getting access to the data. And then there's some bits of faces missing on the finance side and I went back to Australia on and then we kind of left it and fell out of touch At the end of 2016. We reconnected, and I told him some of the initial work I've been doing and we re looked at the problem because it still existed.

But now there was a proliferation of a P I access. We could go directly to Spotify or YouTube and get performance data streaming data from all these platforms, but that you also had some really interesting financial products that would be about that allows us to plug in and access lower cost capital. So the technology really caught up with some of their ideas, and that's what we started building out. And where do

you see opportunities in the music industry with just mentioned technology? They're catching up, and obviously you're optimizing one specific use case with paper chain. But do you see other areas that you can be improved in the music industry that, like you wish people worked on or you might work on in the future. Um, the reason I asked you just cause. Like, I don't have many music founders, Early music industry founders on the podcast. So, like I'm just curious, like what's interesting in the industry for people that work on what's the future look like?

I think it's around, you know, direct oddest of fan relationships on DSO. What's been interesting with the lock down is the shift in the way people consume it in the way that artistry, um, to access that fans in the engagement that they get. But it's not always converting into clear revenue, and that's not really clear yet how an artist would use Instagram lives, for example, Tory Lanes is a really good example. He's been running Instagram live for almost every evening, and he gets a couple 100,000 people watching his Instagram live. But he's not getting paid for any of that. He's not monetizing that what he has been smart is he put out a release last Friday and so or two Fridays ago, and so dining a big number one because that because of the activity that was generated, his Instagram lie appeals out to capture that and could break that into it. Similar to tip talk.

There's a lot of artists were being broken on ticked up, and yet there's some sort of licensing going through. There's not a clear revenue model for hours to monetize those. So I think what the lock down is doing a stunning people to rethink some of the director fan monetization models. And I think that's probably more immediate and pressing challenge. And so it is being worked on, which is good to see. Um, and then the other part around it is just around attribution is making sure that as much as you can provide applications for honest, but there's gonna be some way for honest to ensure that their big that is correct attribution across different works and being compensated accordingly.

You say attribution I know what that means in the digital marketing sense, but can you explain what you what you mean for an artist? Are you talking about like when they get plays, they make sure they get paid and figuring out where they get plays or what you mean by attribution.

Yeah, exactly So attribution in a copyright sense or they're being credited properly. Um, especially nowadays. No, Some of the great innovations in music over the past 30 years have been hip hop. Onda riding structure, particularly now, is very different to what it used to be, where you can have 10 or 15 producers or some writers working on a single song on not always getting proper credit or attribution for their for their work. So I think, you know, enabling that in making that much shit blowin in the creation process. I think those sort of tools of Alabama and again people are working on them. But they have really taken off yet, so I don't know what is going to drive that. And hopefully something like what's occurring now is an impetus for change across a lot of areas of the business. One thing

that I heard somewhere I'm really gonna butcher this, so I apologize in advance. Uh, there's this challenge in the music industry, where are a artist can put out a song and then someone can remix that song like on Soundcloud or somewhere, and I'll use parts of that song and like many times the I guess attribution like the credit for that song doesn't go to the original deejay or something like that and something that I I heard it is that I'm sorry if I'm using the word by I heard that, like with something like Blockchain with, like, a proof of, like a evilly uh uh, a point where something originated that will be able to solve like some of these problems. I'm curious. Like, are you? How do you think about Blockchain in all of this? Is that just way left field and doesn't really apply at the moment for you, Like, how do you think about that? That type of technology,

I think that use cases is really interesting. The challenge with Blockchain technology is a limitation on throughput, the moment, the ability to scale to that level. So that's one of the biggest challenges there. And then the other challenges just ux and usability. I think you know, there's plenty of applications being built on those systems. Uh, what? You know, what they're running into is aux problem. Not a lot of people you know, how to use a metal mask, wallet or know how to interact and manage their own keys. And I don't really understand why. Don't need tokens if I'm just trying to buy this so there's a lot of interest in the space,

but I haven't really solved that gap. The other challenges that some of these companies are trying to replace a Spotify. So it's like, OK, we can build a Blockchain native system where Sooners ustream this song immediately. A micro payment goes to every single artist who contributed to that song. Uh, but so now you have your trying to then get to audiences. You're trying to get artist to use your platform, but I don't really have listeners, and you're trying it. Listeners use your platform, and you really have artists or content or catalogue that sits on their on. Gwen, your only raising, even if you're doing,

say, in the height of the I C. E. O. And you're raising five or $10 million. I don't know how far that goes on how much market shape captured five or $10 million when Spotify spending $25 million a month on marketing just on its own. So those are some of the realities of trying to implement that. And to be honest, like we started out in a as a native Blockchain project. My first, the first generation was looking at ways you could use consensus algorithms in a Blockchain to validate right stated between different nodes in the network. So if there was a publisher and performing right society and a streaming platform allow using old tapping into the same network, invalidating medicine, meditate and copyright information, is that a way to ensure the US can get paid? Of course,

it was just a number of challenges around implementing that. So we started looking at way. So just essentially following the money and see how it could make that challenge work. And so there is still an element off Blockchain or what was a decentralized financing absolution, where we capture all of the state aware pricing all of this data. But then we can take that to some of these interesting financial protocol set of being built that allow us to lend against the value of that data on. So that's our That's where we intersect with the with the Blockchain space or decentralize finance. But it's not something that users have to interact with it something we abstract from them because it's a simpler way to get people to get people on board and doesn't confuse them when they're trying toe actually interact with the application.

Yeah, that makes sense. I like the idea that you use Blockchain, interact with it when you need to, but it's not like you're selling point. But you're not like we're on Blockchain like you. It's like That's not you use it where it's necessary. Um, what would you say? Is the future the future of paper chain if you looked at or not even the future? But let's talk about the vision you look out like 10 years, 20 years. What does the world look like when paper chain, you know, wins the market and becomes as big? That's gonna be like Cancun. Hate the peat future for me,

I think. I always say the ease. The most abstract way to put it is, you know, it's It's a future where people can't even imagine what it was like before having paper chain in their life. Why, that is, I'm not sure what that will be in 10 or 15 or 20 years time, I know that the way we see it in the way we look at this vision, it's not about creating an advancing system or lending model or anything like that. What and why we're so interested in the decentralized finance application is because it enables so many of the things off the back of that. I'll give you example. Last year, we advanced $60,000 worth of Spotify revenue to one about record label customers almost 60 days ahead of the usual pay cycle at a fraction of the cost of a traditional science of financial products. But what was really interesting about it is by using this protocol, we were able to originate. We have to take data from Spotify at the end of August wherever his August.

It's worth this much. It's just simply data. At this point, we just have streams coming from Spotify, but we have the price. It take it to this protocol, say this is worth $83,000. We want to get $60,000 back and pay that to our customers. We were able to originate $60,000 have $60,000 in our wallet in a matter of minutes. Uh, the challenge was in getting that $60,000 from now Blockchain while it into our customer's bank account, which took almost a week to do so. The reason why I was so bullish is if we can originate $60,000 in minutes. We can also distribute those payments a minute, and we can do it at a fraction of the cost of a traditional payments network to soon. For us,

it's about well, how do we create a system where money can flows, fosters consumption, which is really what role, which is really what we're trying to get to with the larger vision. It's about taking this data being out to leverage new financial metrics. We have to create a faster payment system, not just for music but any system where there's a delay between revenue generation and payments. So you know music for us is we will come from that space that we know the data well. It's a very data rich industry for us to build on, but it's just a star because next thing we can do is you triple twitch. There's no reason why we couldn't plug into digital ad networks and work with publishers and advance the pay cycle, their video on demand and mobile in APP store gaming, things like that, even just e commerce as well. So it starts with music but expands into something much more where money starts to move faster and and creatives and entrepreneurs or developers or whoever have faster access to their revenue, which enables them to obviously create sustainable business on their own.

And I'm not only what a vision like what Ah, what a world we would all live in, You know, when that happens, is there anything that weaken Dio as the community is the forward thinking founder community to help you with what you're working on or is there and ask that you have a That helps you move the needle a little bit more that someone in our audience or listener base might be able to help out with

Yeah, you know, for us right now we have some really interesting opportunities to to scale. So we've been working in smaller amounts in terms of advancing, and now this opportunities for us to move into the millions and tens of millions. So it's really it's really us, like jumping jumping, jumping across the gap and crossing the chasm, as they say eso around moving large volumes and particularly in the traditional finance. Well, what was still developing some of the decentralized science component? So if anyone has, you're not connections at places like B'more anywhere like that. But we can leverage them in the short term to be able to move and make payments officially to our customers. I would love to speak to him about that. We're also hiring for a head of finance. So building out the financial element about products.

So having someone look after that space, which is something I'm looking forward to offloading if anyone is interested in that or, you know, knows anyone who thinks they might be good for good. Good for that. It's up on our angel with this profile of which you can find on our website. There's actually a job listing on there for the finance lead. So feel free to go to pick change. I would check that out, or you can just email me directly. A Dannatt paper changed our

all right. I was gonna ask for yet anyway, to get in touch. But you laid that down. So, So awesome. I appreciate you coming on the podcast. You really know what you're talking about. And you really understand this industry, which is excited. It makes me excited to know about what you're gonna build and, you know, the vision that you're building. So they just thanks again for coming on to the podcast. And I wish you luck in building, not paper chain. You know, Thio Thio kind of do what the world needs in the world of getting paid. So thanks for coming on.

Thanks, mate. Appreciate it. Thanks for putting this podcast together. It's really good.

Okay. Thank you, everyone, for tuning into that episode. I hope you really enjoyed it. And luckily, there's another one coming up real soon. But before then, I have a couple things to tell you. First, if you're listening to this and you think you're working on something, who are you? Think you're smart? Hit me up on Twitter. I am at Matt Underscore Sherman, and that is Matt with one t. So hit me up.

Shoot me a GM, and I'm happy to check out what you're working on. And maybe we can get you on the part of. But at the very least, I'm happy TV feedback on your product or project or start up. Lastly, if you can please rate this podcast in the iTunes stores, that would be awesome. I'm trying to get up in the ranking. Some more people discover these awesome founders. And the only way to do that or one of the ways to do that is growing with making. So if you like what you're listening, Teoh, please just go onto the 18 story. Give it five stars. We're for,

you know, or three. I'm not gonna tell you what to give. Just tell whatever I deserve. You should read that with that. I'm signing off. See you next time.