Blockchain Marketing: An Investment with John Livesay

NTE 1 | Blockchain Marketing

 

Most tech people are not good storytellers. They get caught up in the weeds of how something works as opposed to who it helps and what problem it solves, and that continues to be the core problem in anything. Blockchain in particular, is solving that problem as well as the problem of the lack of trust and a lack of transparency. The Pitch Whisperer, John Livesay, explains how they do blockchain marketing at QuantmRE, and digests the little bits and pieces of the complexities of blockchain, cryptocurrency, and tokenization. John has a tremendous background in messaging, branding, and design, and has worked in advertising and PR his entire career. He is currently the co-founder and CMO at QuantmRE, a real estate platform that is built on blockchain technology.

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Blockchain Marketing: An Investment with John Livesay

I have an exciting episode with a good friend of mine, John Livesay. He’s part of the reason that I started to explore blockchain because when he’s entering into something, I thought, “This sounds like something interesting is going on here.” John is not one to jump quickly into something. He likes to explore it and he likes to talk about it and he likes to investigate things. When he jumped in and joined QuantmRE as a Co-Founder and as CMO, I thought, “There’s something here.” This is why I wanted to bring them on to talk with you because he also has an amazing background and he can help a lot of you who might be investigating blockchain or cryptocurrency or any of those things with messaging. He does such a good job of simplifying messaging into storytelling. He has a tremendous background in messaging, branding and design.

He has worked in advertising and PR for his entire career. He has helped QuantmRE raise $1.7 million in seed round. He is known, and I may have coined this in an article I wrote about him, as the Pitch Whisperer. He knows how to dial-in a pitch to make it a storytelling and not about the investor and telling them exactly what you’re doing and all those little details that you all know you get into in the tech weeds. He is a sales and marketing keynote speaker. He captivates audience, ranging from Gensler, Coca-Cola and all types of top corporations. He helps them understand how to increase their sales and go from invisible to investible and go from pitching to making it something useful in your business. He has appeared on TV and had a twenty-year career in media sales with Condé Nast. He has worked across 22 brands at Condé Nast. What he understands is all different types of media and that has served him well in his new role as CMO and Co-Founder of QuantmRE. I can’t wait for you to hear what he has to say and how he digests the little bits and pieces of the complexities of blockchain, cryptocurrency, tokenization and all of those things for you. Welcome, John Livesay.

Thanks so much for joining me, John. I’m excited to talk something so different than we normally do. You and I are friends and we’ve talked about a lot of things over the years. I have to say that you stepping into blockchain and all of these areas surprised me because it’s like you jumped sides.

From being marketing storytelling to tech?

Not just that but you jumped sides from helping people pitch to pitching.

The overall brand and what I do, whether it’s my TEDx Talk about being the lifeguard of your own life, is embracing disruption emotionally mostly and mindset wise. The first time I heard about the blockchain, I thought, “Is this a thing? Is this going to take off? Is this a fad? Do I need to learn one more thing?” Then I heard myself going, “If you’re teaching other people to embrace disruption, do you want to be one of those people that don’t learn how to tweet? Shouldn’t this be a language that you learn?” At least the basic understanding and the hype around, “It’s going to be as big as the internet.” I understand from a messaging branding standpoint that people get confused with the simple things as, “How’s your bitcoin project going?” I’m like, “It’s a blockchain project.” I see people don’t understand any of the basics and have decided to dive in and learn this and be around people. I’ve gotten some crisp definitions of what it is so that your grandparents can understand it in a way that is non-technical. That’s always been my sweet spot is helping people understand tech stuff in a way that is not technical.

I want to get to that but I want to give people a chance to get to know you like I know you. You have been helping people pitch for five years. Is that what you’ve been doing?

I’ve been on my own for five years from my background at Condé Nast, selling advertising to helping startups figure out how to pitch to get new clients, let alone how to get their startup funded.

NTE 1 | Blockchain Marketing
Blockchain Marketing: Blockchain solves the real problem of the lack of trust and a lack of transparency.

 

You’ve been on that side plus you had your podcast, The Successful Pitch Podcast.

Once a week, 184 episodes or something like that at the moment, which is staggering of that concept of when you start something and then you go, “How many of these have I done? That’s over three years.” It goes crazy.

Doesn’t it amaze you that you’re still learning something?

Every day. Every time I interview somebody new like, “What? What’s the difference between truth and trust?” the subtleties of the words. I just feel like I’m in a master class with my guests. It’s fantastic.

That’s one of my favorite parts and that’s the last thing I’m going to give up. That’s the last thing you’d have to take from my clenched fist. It is my learning time and having that scheduled into my calendar means a lot to me. It was also my networking time and that’s how you’ve used it very successfully. Did you use any of those techniques as you were developing this venture with QuantmRE?

I use all of them, not only the networking techniques but the pitching techniques and the willingness to start interviewing people who are blockchain experts to increase my own learning as well as my own network. It has been a fantastic use of the podcast all through the lens of what makes it a successful pitch. It’s been interesting and I love it.

Advertising persuades people to take action. Click To Tweet

Now you’re keynoting, you’ve got a TEDx Talk, which I loved. Tell everyone a little bit of background about you. I gave them your basic bio already, but give them a little bit of background from your perspective.

I majored in advertising. I was always fascinated between the merger of show business and business, which is where advertising lives. What persuades people to take action which is what an ad does. That evolved from selling advertising at Condé Nast for over fifteen years and been fortunate enough to win Sales Person of the Year there. Understanding that each of those brands, Condé Nast has twenty different ones from GQ, Wired, Vanity Fair, W to Gourmet, Bon Appétit, having to explain to potential advertisers what the voices for each brand. How that attracts a certain audience that could fit what they’re targeting, whether it’s a car company or a hotel or a fashion company or a tech company. Apple, for example, was an advertiser. That helped me understand storytelling because the editors are experts at it. The intent was to inform, inspire and entertain every month or every post or the video. That around that concept of what makes you a good storyteller is the launching pad for solving a problem.

Most tech people, in particular, are not good storytellers. They get caught up in the weeds of how something works as opposed to who it helps and what problem it solves. That continues to be the core problem in anything. Blockchain, in particular, it’s solving a real problem of the lack of trust and the lack of transparency. When people start to understand that it could prevent all the problems that happened during the banking crisis of 2008 because if at all that was on the blockchain, that couldn’t have happened. My favorite explanation of all this is there was the internet and it didn’t take off. It was something that people knew existed until the application was email. At the blockchain, it exists. It’s a bunch of ledgers, keeping track of things that are transparent but it’s not being used. The first app, like email for the internet, is bitcoin but that’s just one of many applications.

When you compare other tokens to calling it a bitcoin, that’s like saying email is the same thing as YouTube or something. People started, “That’s the runway,” and then it’s a whole different language. Just like the difference between print sales and digital sales, this is a whole different language to learn. You go, “Centralized, decentralized, what’s the difference?” I heard someone say, “Centralized is when you stand in line to get a beer. Decentralized is we all have a glass of wine, we all have the exact same amount of wine, we all take a sip at the same time and we know exactly how much is left in our glasses,” it’s transparent. Those kinds of stories light me up because then it’s complex things that people go, “Oh.” I was listening to my co-founder, Mathew Sullivan, speaking on a panel and one of the questions someone said is, “Is the blockchain the recipe or the ingredients?” The lateral thinking that got used which is one of my favorite things was, “It’s neither, it’s the oven.” You can put many different recipe and ingredients in an oven and things come up. That is my skill set is going. Let’s understand what we’re talking about, let alone what problems we’re solving at QuantmRE.

When I see people like you who joined into a blockchain venture and I get pushed into going to a blockchain conference, I was still on the skeptical side. It reminded me exactly of my early days of 3D printing because I see a lot of similarities there. That’s why I started this podcast with Monica because when we started in 3D printing, it was this skepticism thing. There was this, “You can make anything. You can do anything,” and that’s so broad and people don’t understand that. My ability to develop things, you develop messages but I develop things that demonstrate abilities. That is exactly why I said, “We have no choice. We have to explore this.” We have to get into this because we have to understand this for our clients, for our futures, for what’s going on. We need to figure out what the best demonstration and understanding of it and the application of something is. When I start to see applications like yours, I start to say, “This is past what the skepticism should be.” I need to now start explaining that to people and start showing these case studies, these things that are going on because an application is extremely important. People are starting to get that it’s not just email, it’s not just bitcoin.

This concept around the blockchain is more than just being used for cryptocurrencies. It’s an a-ha moment for people. When I started to say that it’s going to make sure that the organic food you’re buying is in fact organic because it’s going to trace it from the time it was a seed all the way until it’s in your pan. Making sure that art is not forged and then people start to get intrigued, “I see that this isn’t just a volatile cryptocurrency use,” that there are a lot of different things that are going to be changed.

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Blockchain Marketing: One of the questions that always comes up when you’re in a startup world is “Why you?” and “Why now?”

 

Let’s talk more about QuantmRE now. Explain to us in layman’s terms, to our grandmothers and grandfathers what it is that you are doing there because it’s very unique.

It’s very targeted. The problems we’re solving are for homeowners and investors. The first problem we’re solving for homeowners who have built some equity up in their home and wants some cash-out. Let’s say you’re a middle-class family. You want some money to send your kid to college or remodel. Your only option is to take on more debt. You have to refinance or take on a second mortgage or HELOC, whatever you want to call it. If you’re a senior citizen, you need cash and your house might be paid for. You have to take a reverse mortgage out. It’s all debt. What we have been doing is something called fractional ownership. If your house is worth $1 million, your mortgage is only $500,000. You want $100,000. We’d say, “Here’s $100,000 in cash. We will then own 10% of the equity in your home. You could stay in home for as long as you want. It’s not a loan. There are no mortgage payments and when you sell the house, we settle up.” It’s a shared partnership. If the house is only worth $1 million five years from now, we would just get our $100,000 back. If it goes down, we’d get less. If it goes up, we would share in that appreciation. It’s a great way for people to get cash without going into debt, which is revolutionary.

There are no payments, there are none of these things. I’ve used it in an analogy of having a UCC lien, which is a business thing. Where you have a lien set on it so it can’t close without the investment being paid out.

It’s literally a performance lien. The mortgage gets paid first and then we get paid second, based on how much the house appreciates. Here in California, which is where we’re focusing first, there’s a new law, because one of the questions that always comes up when you’re in a startup world is, “Why you and why now?” The “why now” part is great because interest rates are going up. People have a low-interest rate for the first, why would they take on more loans at higher interest rates? The governor in California passed a law allowing people to illegally convert the garage into apartments. How great is that? You can start getting some income.

Especially we don’t have a car anymore because you’re Ubering everywhere or you’ve got electric cars.

For the senior citizens, the social impact, they want to get some income. They need money to convert the garage with plumbing and their only option is to take out more debt. We can give them the cash if there’s equity in the home that allows them to remodel and start getting cash without taking on more debt. That’s a whole new way of doing things. In fact, Airbnb is encouraging people to get a loan to convert so they can pay off the loan with the money that they can make from Airbnb in the room. Imagine if they didn’t have to pay off the loan. We are that solution.

Good storytelling is the launching pad for solving a problem. Click To Tweet

That’s also risky because you don’t know if you’re going to be any good at it.

That loan payment’s due every month. This is not the case here. We’ve done over 300 of these transactions before. That’s what compelled me.

You’ve already got proof. You know how big I am on proof.

One of my investors said, “If you’re selling dog food, I’d love to see the dogs eating the food.” The proof of concept is there. We have a team that’s done this and know how to make it SEC compliant and follow all the rules. It’s the barrier to entry for competitors trying to duplicate this because it’s fairly complicated from a legal standpoint. We’ve got that, but the investors who have been funding this have to be very patient. You have to wait for people to sell their homes in order to get your money back. The average length of time these days is seven years. It’s typically pension funds and money like that. Matthew Sullivan’s brilliance is let’s put these assets on the blockchain and create a token that’s literally backed by owning small percentages of hundreds of people’s homes. There will be some stability expense called a stable coin to that as a security that will allow people to get into the real estate game, who don’t have any way to do it because it requires a lot of cash.

If you can buy a fraction of our token that represents fractions of homes, you now are in the real estate game. You have the potential to have some of that uplift in the price of the token when the homes go up without the headache of being a landlord. The overall theme of this is equity freedom, freedom to release the cash from your home without taking on debt. You, as a homeowner, don’t even have to know it’s on the blockchain. All you care about is taking on more debt but for people who want to invest in real estate, now I can buy a token without having to be a landlord. That is completely new, which again has a social impact of getting access freedom to invest, without having to be in the 1% club of people who can have that kind of a disposable income. All of that is what allows us to have a message that’s all about equity freedom. Once you have that messaging out there, then the press picks it up and it starts to take off both from a homeowner’s perspective and investors.

I would love for you to define in your more simplified terms, tokenization, because that’s confusing to a lot of people and what that means.

NTE 1 | Blockchain Marketing
Blockchain Marketing: When you allow people to segment and create their own portfolio that they feel comfortable with in specific neighborhoods, then they get excited about it.

 

My definition of what tokenization is literally allowing fractions of fractions to take place. If you visualize 10% of all the homes on your street being combined into a mutual fund or if you’re into real estate writs. The difference is writs typically are commercial buildings or big apartment buildings, but this is residential homes. It’s a new asset class that’s ever been allowed to be invested in. The problem is it’s not liquid but by tokenizing, taking that equity and putting it on a token. In this case, it’s a QuantmRE equity release token. That token represents, like a mutual fund, all these homes. Let’s say whatever the token sales for, you say, “I can’t afford that but I can buy a fraction of that token.” If the token sales, let’s just make up a number, for $1,000 and you only want to buy $100 of that, then you own whatever that percentage is of that token. That’s what allows you to buy and sell the token. If you think, “This has gone up, I want my cash, I’m going to sell.” The person hasn’t had to sell their home.

You sell the tokens back into the group and somebody else invest in it and buys it. I wanted to hear your version of it because you get into these and some people will explain it like, “Remember when you used to go into the tokens on your vending machines.” It depends and everyone’s version is different. It’s an interesting model of what you’re doing because there is a need and it hasn’t been filled and that’s what I love to see in the application of things. When you see a new technology or a new functionality being utilized and applied, that’s what I like to call this as an application, applied to fill a void, fulfill a need.

Would you like to hear what our secret sauce is?

Yes, absolutely.

For people who like to buy mutual funds or whatever the majority of all those, we have that. That’s the security token. We have now created something for the laptop and latte crowd. Those people, they’re typically Millennials. They are sitting in Starbucks, drinking their latte and they’re on their laptop. They are still the mindset of, “I don’t want to just buy what the stocks are in the S&P 500, I want to pick my own stocks.” That personality loves what we’ve created, which is called an active portfolio, which has a patent pending on it, since you are the patent queen. What that allows people to do is say, “I only want to buy homes in Malibu or homes in Santa Monica or homes in Irvine.” When you allow people to segment and create their own active portfolio that they feel comfortable within those specific neighborhoods, then people get excited about thinking, “This is the neighborhood I know where I’ve researched.” We’ve done the platform. We’ve built all the metadata, what’s the crime, where are the schools, all the things that you might want to investigate.

It’s like the turn rate, how often they sell in a certain region. My neighborhood has a high turnover rate because they’re invested by a lot of foreign buyers. They have a higher turnover rate. They may not take seven years, maybe they take four.

A good pitch is a clear, concise, and compelling message in the right room. Click To Tweet

What’s the household income in that neighborhood? All of that stuff is part of what we’ve done. That part is a subset of the big picture stuff that allows people who go, “That’s going to be huge.” There’s more, as they say when you sell, we’re also going to gamify that. There will be a model version. I think of it as Monopoly meets Zillow meets a dating app. It’s play-money, much like as fantasy sports league, play tokens. You will be able to look at homes much like you do, “Left, right, I want that, I don’t want that.” You will create your own model game version of what your fantasy portfolio would be if you bought percentages of those homes. There will be a leaderboard where you can see how yours is doing compared to other people.

I heard from someone, I was at a conference at Magnify Your Wealth Conference from our friend, Aaron Young. His COO, she was saying that she likes to house browse, not in the market for a new house, but she likes to house browse. This would take that to a totally another level. This is like creating your fantasy house team.

Some people go to open houses on Sundays just to look. That’s their idea of relaxation and fun. Imagine if you can do that digitally and then pretend that you’re investing in them. It allows parents to teach their children blockchain as well as real estate investing through a game. From a big picture standpoint, the US is behind Asia on children understanding how the blockchain works. This game will allow parents to say, “Let’s play this game. Let’s pretend you’re buying a fraction of that house.” Then the kids were like, “Should we buy this house or that house?” They start to get involved in the game and that becomes a whole other way of having social impact and it’s a blockchain fun.

Now my daughters will want, and you may have to add this to your metadata, to know if it’s a dog-friendly neighborhood. They are on themselves that all they want is a dog and you know my daughters. That’s got to be in your metadata. It’s important.

It is, “What schools? Is there a park nearby?” all that stuff. It’s what people care about. That’s what we’re excited about. We’re big fans of what Ray Dalio is talking about, which is when someone spends money, that becomes somebody else’s income. Most people are spending money from debt as opposed to making it and that’s the cause of the problem. We feel that we can help the economy by giving people money for the equity that’s trapped in their house without having to take on debt. They go to Home Depot and remodel it, and all of that stuff starts the economy growing.

It sparks things on. This is where I’m excited about blockchain and one of the reasons why I started this podcast, so that I could explore this from my side of things and start understanding deeper on how this can help businesses grow as well. You know how my passion is of unique things. As you mentioned, I’m the patent queen. Understanding how we can utilize this to make sure that the best products get to market and the unique innovation makes it, because you’re not giving away all of your company. You’re not putting yourself in to complete that. How can you get that to work through a blockchain and create an application that is going to get you funded and get you where you need to go? You don’t lose out to someone who has more money but with worse product.

NTE 1 | Blockchain Marketing
Blockchain Marketing: You don’t have to be an accredited investor to buy the tokens right now.

 

For my job as a CMO, we’re exploring relationships with brands like Home Depot. If you take money out of your house, you’re probably going to remodel or you need to have your house properly insured, where should we send you? It gets even more fun when you start thinking, we have a broker-dealer license. If real estate agents, we can solve a problem for them. They sell someone a home and then they just have to wait for them to hopefully reach out when they sell. After three or four years, you’re like, “I know you have no intention of selling that house, but do you know how much your house has gone up? Why don’t we take some cash out? It won’t increase your mortgage payment and then I can use that as a down payment to buy you a rental property in Palm Springs.” It allows the real estate agents to look like a hero. We can pay them more referral fee. There are lots of potentials there.

That’s aggressive and real estate agents are going to love that.

Mortgage companies say, “I’m sorry you don’t qualify for our refi, but let us put you in touch with QuantmRE because they might.” Also if you’re a real estate investor, the only way to get money out of your property is if it has to be your primary residence to qualify for a refinancing, not with us. If you own a home and it’s not your primary residence and there’s enough equity in there, we’ll give you the cash for that, which could allow you to buy another piece of property without selling that one. There are a lot of exciting ideas in marketing strategy behind this.

I love what you’re doing there. It’s so fascinating and so deep and I can see you’re so challenged and passionate about it, which I love to see, John. You went and pitched and you raised $1.7 million which for what you’re offering, it does not seem like a lot. Is that the end of it? You’re out there pitching.

That was the seed round to get proof of concept that we actually have a platform that works. If people go to www.QuantmRE.com, they can see the problems we’re solving, the white paper, all that good stuff. More importantly, they can click on the platform and say, “I’m a homeowner.” You literally enter your zip code and your street address and the API connects to Zillow and says, “We found your house. Is this your house?” People love this. They go, “Yes, that’s my house.” “Here’s how much they think your house is worth. Is this what you think?” “Yes.” “How much is your mortgage?” You put that in and then there’s this little slider and says, “Based on that, here’s how much cash we could give you, up to 30% of the difference between what you owe and how much is in the house.” That alone was very technical build. On the other side, “I’m an investor. What does that look like?” “Here’s how you buy and sell the token. Here’s how you create your own portfolio within those specific neighborhoods and click on different houses and see all the data to see if you want to put that in your portfolio.”

Based on SEC rules and things like that, are you having to qualify investors? Are they having to go through a full qualification system?

Yes, it’s all accredited investors at this point for the fundraising part. Once the token is available, that will be available to anybody who wants to buy the token. You don’t have to be an accredited investor to buy the tokens.

Explain to the audience what the difference is because an accredited investor involves a specific percentage of your total overall value. You have to prove that.

Typically, you have to have a net worth of $1 million net, including your home to be considered an accredited investor to invest in any kind of startup.

You understand that from your background before. You brought a lot of value to this company and I’m so thrilled that you are applying it here.

It’s interesting, there’s a lot of demand for people who have invested in Bitcoin and other Cryptos who have made profits. We become a digital off-ramp for them. Then there’s a whole group of investments, family offices and Morgan Stanley that are hiring people because their clients are saying, “I want to diversify my portfolio and get into cryptocurrencies.” Any investment has high risk and some are low risk. We become part of that balanced portfolio of digital on-ramp for family offices and the institutional investors who want to dip their toe into cryptocurrency. Family offices typically are big in real estate anyway. This is a great on-ramp for them to say, “Let’s start with this QuantmRE as a starting point to get you into cryptocurrency.”

John, I want to touch on one more thing. I am sure that as you were out there pitching and starting to try to do that seed round raise, you came to a lot of barriers of understanding with people that you had to pitch to. Are you finding a lot of those that you might pitch to, those VCs or those people who might be doing seed rounds interested in learning more or knowledgeable already?

A good pitch is a clear, concise and compelling message in the right room. The people who are investing in a seed round are typically not Angel investors or VCs. They’re all based on what your next round and the equities. The cryptocurrency investment typically is different. It’s more of the people that we knew already or people who are in real estate and understood this. They’re the people that were most likely to say yes.

It was talking to the right people who already had that leap of understanding and that risk assessment. They already had this. They were able to understand that they were taking a high risk and that was okay with them.

They were already either invested in cryptocurrency or they’re real estate people and they want to diversify.

Thank you so much. Is there anything else you want to share with us about a QuantmRE?

We’ve written a free book called Equity Freedom for homeowners who might want to understand this. They can go to the website and download that for free. That’s a great way for people to start to have a deeper understanding. If you’re interested in investing in a token, that also can give you a better understanding of how revolutionary this is and that it’s not a loan or debt. If that’s something that you’re interested in exploring the website, we have a telegram channel for crypto investors that they could go in.

For those of you who are not in the know, telegram is the channel for that.

Tracy, thanks so much.

Thanks so much for joining us, John. I appreciate it and I can’t wait to hear what’s next for you.

Thanks.

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About John Livesay

NTE 1 | Blockchain MarketingJohn Livesay is the Co-Founder CMO of QuantmRE where he has lead the team in developing the messaging, branding and design of the platform while working on the advertising and PR to gain traction and buzz that resulted in $1.7M in seed round funding. John Livesay is known as “The Pitch Whisperer.”

As a sales and marketing keynote speaker, John has captivated audiences in settings ranging from Gensler’s top management retreat to Coca-Cola’s CMO Summit. He is also the author of The Successful Pitch: Conversations On Going From Invisible To Investable and the host of “The Successful Pitch” podcast, which is heard in over 60 countries.

John has appeared on TV as the expert on “How To Ask For What You Want And Get A Yes.” During a 20-year career in media sales with Conde Nast, John worked across all 22 brands in their corporate division, and was the recipient of salesperson of the year honors.

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