High School Dropout Made World’s #2 NFT Project | Pudgy Penguins, Luca Netz

Intro

00:00what's the benefit of college probably the two biggest things you get from college is the public classes of like mentors and entrepreneurs and the Alum coming and teaching the students and then the network that you get from the actual students that are going to that college when I dropped out of high school I kind of came to the conclusion that I had to get an education somehow but every single one of those alumni speeches where entrepreneurs and alumni from Stanford and Harvard all of them

00:24were recorded and put on YouTube and the most impactful piece of advice that one of these YouTube videos taught me was I lucanet and uh I'm the CEO of uh Igloo it holds pudgy penguins which is an IP brand that has been incubated and started uh within web 3 of The Last 2 and 1/2 years it's the best performing nft in the market we've launched uh a slew of different content and product initiatives uh we have toys in Walmart and Target Nationwide in the United States in 12 months we've sold a million

00:54and a half toys grossing just north of $15 million we are clocking in about 50 to 60 million views every single day across different social channels so I think growing up it was pretty tough it was me my mom and my

Chapter 1. The Founder Born on the Streets

01:10brother and my mom was a single mom just really bouncing around house to house guest bedroom to guest bedroom for about 10 years it was about 14 different places in 10 years all over Europe All Over America making friends for 6 months new schools new people it wasn't easy I think in the early years it kind of felt normal but uh as I began to get a little bit older it became increasingly clear mom was always having like nervous breakdowns and stressing out never had the nicest clothes was always kind of felt like uh the missing Thro within the group of uh you know kids and people

01:42around me you know when she decided to have kids with my dad she thought like hey I'm going to play the the motherly role and unfortunately when he decided to leave and kind of Veer in his own world that put her in a really interesting position where she didn't go to school and you know develop you know professional skills uh she had two kids and ultimately when he left uh she was kind of left uh in crypto we we'd say holding the bag yeah so when I was 16 my mom started airbnbing our small apartment and so ultimately it went from a home to a hostel as a young man old

02:14enough to work in America that really drove me to a new brink of pressure and stress in which I decided I just needed to take initiative now I wanted to go to school and I wanted to go to college for business but I knew I was going into debt to get the degree and so seemed really counterintuitive for a businessman to go into a debt to get a business degree and so I realized that that probably also wasn't in my future as well as it just didn't seem like a

02:37good business decision and so at 16 I dropped out of school when I dropped out of high school I kind of came to the conclusion that I had to get an education somehow I actually talked to somebody who I really respected uh that I that uh was really successful in the real world and I was and I said what's the benefit of college and he said probably the two biggest things you get from college is the public classes of like mentors and entrepreneurs and the Alum coming into teaching the students

03:00and then the network that you get from the actual students that are going to that college and so I was like well you know I can't really supplement for the network part but every single one of those alumni speeches where entrepreneurs and alumni from Stanford and Harvard all of them were recorded and put on YouTube and so I spent a lot of time just listening to those people and the most impactful piece of advice that one of these YouTube videos taught me was I forget the entrepreneur but he

03:23was speaking and a guy had asked him what would you tell other entrepreneurs as you know some of the most important pieces of advice for them to succeed and the first thing he said was don't be the victim and stop feeling sorry for yourself and I was about 15 years old at the time and I was Peak feeling sorry for myself mind you 15 years old you know basically 10 years ago Instagram was a thing I'm seeing all these people you know flex and flaunt I was really depressed at 15 and uh I was feeling so sorry for myself and asking you know the

03:54universe why me why this why that once I heard that it really clicked for me in a meaningful way and proba the most impactful thing from a mindset perspective was that shift at 15 I stopped feeling sorry for myself I realized that I was pretty much old enough to go and make something happen and that's when uh my whole life changed I uh decided to kind of pursue an entrepreneurial Endeavor in throwing underground rap and hip-hop shows in South Central Los Angeles I did that really well and profitably for a while but I ended up uh getting arrested too

04:24many times for these illegal events I decided to get a job I took a 100 resumés I went up and down Fairfax and Melrose and handed them out and then took my behind to Tech row and Santa Monica and thankfully I got a job at a tech startup at the time which was a pretty small one called ring doorbell I was uh one of their early employees like first 20 or 25 employees I was packing boxes for them and uh ultimately I did that for about a year and a half and I

04:49basically saw that business go from 25 employees to 500 600 by the time I left and they were getting ready to start to sell to Amazon which they ultimately did for a billion dollars but during that time it really motivated me to be a digital entrepreneur I had learned uh this concept of e-commerce and Shopify and how easy that uh that platform had made uh actually being able to sell things online and one thing led to another and I decided to start a jewelry business which took off uh pretty quickly so if you've ever done an e-commerce uh you know store before it

05:20gives you notifications and it makes this like money sound and so when I first started getting like my first couple hundred a day I used to take pots and pans throughout the house every time I heard that and I used to bang them together and then I used to get sales like every minute so I couldn't do it anymore but it took 2 years after I dropped out of high school to make my first million bucks it uh scaled up pretty quickly I had uh kind of cracked a code around influencer marketing I mean I was probably one of like the

05:44earlier Pioneers around influencer specifically Instagram marketing that I think most people weren't doing and uh once I cracked the code I scaled it as quickly as I could and uh I was able to basically go from 0 to $2.5 million in Revenue in 6 months and I was clocking in 60% margins and uh it was a pretty good life so I think naturally I had some

Chapter 2. The Collector to the Founder

06:10friends in uh 2017 who were really big into crypto uh 2016 they started to take off and so i' been familiar with Bitcoin and some of these other coins for a while but once my friend uh told me about nfts I got really excited so I started to buy and collect a lot of nfts I started to fall in love cuz it's actually like feels like a maybe a a childhood trauma void that I kind of had in the back of my mind which was growing

06:34up I had nothing so once I started to have money I started to collect like cool things like things that I thought were interesting that you'd kind of present at show and tell so nfts are interesting because the unit basis of the token because they're non-fungible tokens and they're small amounts and so in pudgy Penguins case there's only 8,888 pudgy Penguins demand is created by who can resonate with that character and how far the character can go and I

06:59thought PUD Penguins address was the most universal IP of the bunch and could reach the most amount of people and resonate with the most amount of people and so for this reason I thought it was the one that could yield the most demand and that ultimately led me to my first buy of my pudgy penguin nfts I uh bought a ton of them I bought them for like 20 30 100 bucks each but unfortunately the founders at the time or 18 to 19 year olds didn't really build the business

07:23the way that it should have been built and so rather than like complaining uh I decided that I thought that the opportunity and the market potential in this industry was huge I believe that digital Collectibles are going to dominate a huge percentage of the market cap of just the collectible business in general and today right now I think the difference between physical and digital Collectibles is about 99 to 1% if the collectible market cap in general for

07:45all collectibles around the world is $500 billion only 1% of that market cap is in digital Collectibles and the other 99% is in physical Collectibles however digital Collectibles have a slew of Pros that physical Collectibles do not there's no inauthenticity issues there's no spoofing issues there's no friction when buying or selling there's a slew of things that I think make collecting digitally significantly better than physical and so when you look at that gap of 99 to1 and you look at all those

08:11Pros you realize that that Gap is going to close and the couple companies that lead the charge and closing those gaps I think are going to be worth tens of billions of dollars and looking through that lens and understanding I think the market potential and then looking at the competitors and the businesses at the time that were supposedly you know trying to lead that charge I looked at them and I thought to myself well I don't think these people know how to run a business and uh I think I can do a better job than all of them so to prove

08:36that thesis we bought the brand 2 and2 years ago for $2.5 million and uh we've been trying to prove out that thesis ever since so far it's worked out according to

Chapter 3. Once in a Lifetime Magic

08:48[Music] plan we've sold a million and a half toys in 12 months the penguin is ultimately the magical piece in all of this I think there's only so many IPS in the world that have that and just naturally when I closed my eyes and I saw those Penguins the first time I smiled I felt good and when you have an emotional visceral reaction to a character the first time you see it that's not to be ignore that's once in a-lifetime Magic that needs to be harnessed crypto has to be for everyone that doesn't just mean you know men and

09:21women and you know different ethnic and professional backgrounds it also means the younger generation and I think toys played a huge part in that in being a able to reach certain audiences and speak to audiences in a way that they're familiar every toy that we sell actually comes with a birth certificate on that birth certificate there's a QR code people scan that QR code they sign up to pudy World they input an email and a password they're given a custody crypto

09:44wallet and then they're able to redeem 3 to five nfts through a a Payless gas experience that basically gets them onchain collecting nfts for nothing short of a $5 purchase of a toy and so when you think about it you know we've sold you know a million and a half toys we have hundreds of thousands of QR code scans you know we've onboarded hundreds of thousands of people on chain leveraging this mechanism and this trojan horse that is the pudgy toy and

10:08ultimately getting them familiar with what it is to you know be a part of this you know digital collectible universe and I think it's one of the most beautiful stories ever told in terms of how you're Reinventing the relationship between brand and consumer into branding participant meaning if you're an nft holder and you're first edition collector you can actually have the opportunity to turn turn your nft into a physical product that the company will

10:33then push and distribute to Walmart and Target and you will get a licensing fee for that that's a really interesting way to think of brand if you were a consumer why would you pick participating in a Disney ecosystem when you can participate in ours and potentially have your character get brought to life and actually participate in the upside of what you're championing and so the toy business was really interesting cuz I thought it was the lowest hanging fruit in terms of really testing that model

10:56and seeing if it's uh something that was feasible and scalable and 2 years later we've uh we found that that's probably the case and uh it's it's changed the whole Paradigm on how people are looking at web 3 IP I think the problem with the crypto industry is too many people are trying to force things down people's throats instead of meeting consumers where they are and if you just keep issuing more Supply and you're not creating enough demand ultimately you have these you know ups and these

11:20monster downs we haven't issued at any nfts and we have no play on issuing any nfts I think for us more than you know just a place to make money or to lose money it's a place that empowers basic human rights and takes this idea of physical ownership and translates it in the digital world which I think is uh going to be more important than people think here very

Chapter 4. The Game of Building the Best Brand

11:47shortly pudgy Penguins products or blockchain products are powered by different l2s within the ethereum ecosystem ethereum is the dominant cryptocurrency today outside of Bitcoin but unfortunately uh as a scaling solution when you go in terms of you know a lot of usage uh it needs uh a roll up to kind of be working on top of it and so these are called layer twos which are basically scaling Solutions built on top of ethereum uh that allow ethereum to scale and ultimately I think l2s and just blockchains in general have

12:18gotten to the point that I think uh a majority of the tech under the hood is commoditized I don't think it's a game of who can make revolutionary technology I think it's now a game of who can build the best brand with the most users and the best marketing funnel and I think it's time for us to grow our ecosystem in a way where other people can build and do the things that paji Penguins has done and be able to get the support from us and the guidance and the mentorship

12:42as well as the tooling necessary for them to really achieve that success and to achieve those goals now I'm of the guidance that I think consumer crypto is the final frontier and the most important Frontier for cryptos uh that crypto's ever seen at least in its life cycle I believe this because I think if we don't break through to Consumer quickly or at least in the next couple years that there's a ceiling is going to be set on crypto and so there's really two paths that I think crypto can go it can be you know digital gold it can be

13:07programmable money I think that ceiling is probably somewhere between you know 10 and 15 trillion do which I think is still great and we have a lot further to go however there's another thesis and that thesis is blockchains are the next itations of economies and those economies are going to be be built on the internet and that ceiling I think is 90 100 120 trillion and to get there you you actually have to have breakthrough use cases and you have to have that fast

13:32the problem is is so much of the everyday consumer who's familiar with crypto is conditioned to believe that it's a safe haven for the casino degenerates and just a place to either make or lose money but you know rather than just saying it's so much more than that we have to prove it's so much more than that and this is where I think the barrier to pushing the consumer crypto boundary and breaking through that barrier is ultimately going to be the

13:54most important Frontier and so for the last two years pudgy Penguins and the igloo has been the face of that consumer crypto Revolution and I think very few people have done or even come close to what we've been able to do from a consumer adoption pers but now it's time to take it up a notch further we needed a blockchain we ended up acquiring one as of recent led by an amazing developer that goes by Saar who's I think one of the most well-respected developers in crypto now we're building the consumer

14:19chain that ultimately I think is going to power uh the next generation of viral consumer applications that uh We've yet to see in crypto [Music]