Live Q&A with Ted Livingston, Kik founder and CEO

Okay it looks like we’re good to go here. So welcome everybody to the first Kin community
question period.Question period is something we’ve been doing for quite a while now and
basically what we do is every two weeks we get together and it’s a chance for the company
to ask me questions about where we’re going, what we’re working on, etc. How it works is first we send out a message
and anybody can ask a question anonymously. So we really want to get those hard-hitting,
good questions, what people want to know and we let people ask those anonymously. And when we do that, we filter them with three
rules: First we want to make sure the questions are on topic – they’re talking about the company
or the projects or the things we’re working on, and they’re not repeated questions. These are not ones we’ve already answered
before. Second we want to make sure they’re constructive. You know because we’re all trying to figure
this out together, so constructively-worded questions. And then finally third, we don’t allow questions
that are about an individual. This is not a place to call out this individual
or what the heck was that person doing or what is this person doing. But beyond that pretty much anything goes. You can ask anonymously, we filter for those
three rules and then I answer live in front of the company on the spot. So I don’t actually see the questions ahead
of time and the reason for that is if I do I worry that we have to be sort of sitting
there and trying to position it and figure out how to say it that sort of gets this message
across and that just feels inauthentic to me. I almost want to be caught a little bit by
surprise because it forces me to be more authentic, more open, more honest. So what we thought we’d do today is to try
to do question period with the Kin community. You know we’re sort of mid-transition here
from a private company trying to build a single app, scale it, and turn it into a business
and now we’re transitioning to a crypto-organization. We’re trying to spark a movement that is going
to have people from all around the world contributing and working together. So how this is going to work is we set up
a page on Reddit. In the comments anybody can ask any question. The moderators are going to go through and
look at all those questions and review them for the same three rules. So is it on topic, is it constructive, and
is it not about an individual. And as long as it passes those three rules
I will answer them. And we’re going to start at the – We’re going
to start at the most upvoted comment that passes those three rules and work my way down
until either 1. 30 minutes passes or 2. we run out of questions. So last thing I’ll say before we get started
is I really like this format. We’ve been using it at Kik for years because
it’s sort of my chance to be honest with the community but what the does mean is because
I’m not preparing ahead of time, because I’m not trying to position answers – sometimes
I will say things the wrong way. I’ll answer a question that gets interpreted
one way but I didn’t mean it that way. And in that case, I will come back and we’ll
correct that. That’s just the cost of doing things this
way. And second thing is I won’t actually be able
to answer every single question. You know there are some questions that are
confidential to specific people or to a specific entity so I’ll absolutely do my best to answer
every question I can that meets these three rules. So with that, let’s get started. So I got the Reddit page open here. Question period, the first Kin Community question
period. Okay, so let me refresh this. I’m going into the comments on the Reddit
page. Okay, I see that Rod, who’s our communications
guy, has posted four starter questions and we just posted those to get things going as
questions start to come in. RiverGee, I won’t say everybody’s name, I’m
going to start there because you know this is a question from the community and we’ll
get started. So the question is “Does Kin have a plan to
be listed on any of the following exchanges: HitBTC, Poloniex, Binance. For a company that is supposed to have millions
of dollars in backing they should be able to afford to fork up some money to get listed
on these exchanges. So I think that’s a super fair question and
maybe I’ll just go back for a second and just give you context of how we got here. When we were doing our token distribution
event, it was a pretty new idea like here’s an established company – billion dollar evaluation
launching its own cryptocurrency company and I think we were the first VC-backed company
to do that. Certainly the first unicorn company to do
that. And because of that there’s a lot of lawyers
and accountants and investors involved like “What is this new thing, how are we going
to make it work?” We wanted to do things, in a regulatory-compliant
way as possible. And so at the time on the other side, we also
looked at exchanges and they were at the time just picking up these tokens on their own. There’s a new token distribution event, and
right away it gets picked up on all these major exchanges. And so we sat there and we said okay, we’re
not quite sure what the rules are going to be going forward and so we want to be as regulatory-safe
as possible and at the same time these exchanges are just picking up the tokens on their own
so like “let’s just let these exchanges pick up the token that way we can be safe and it
gets out there because we do need the tokens to be on the exchanges for this ecosystem
to work. Developers, consumers, everybody who is going
to be part of Kin is going to need that liquidity. And so we thought we were pretty clever about
this but then the world changed right as we were doing our token distribution event. New guidance came out from the regulators,
putting more pressure on the exchanges to do more due diligence of which tokens they
would pick up and that caught everybody a little off guard and so right away we had
to change our approach to how we would work with exchanges but also the exchanges had
to change their own approach. How they would vet new tokens and get them
onto the exchanges and so that took some time. The world changed, how tokens got onto the
exchanges changed, and how we had to operate within that new world changed as well. So I can’t talk about this too much because
it’s a confidential process and it’s what people have asked for at this point but I
will say that we are fully aware that for this ecosystem to work, for Kin to work, there
needs to be liquidity for these tokens on major exchanges. Okay I’ll hit refresh here and go to the next
question. “What are some of the really big milestones
we can expect over the next 2 – 3 months?” So I think a big thing – so we do this token
distribution event back in September and then we’re ramping up and we’re going to the point
where we can deliver a really clear road map to the community. And I think if I were sitting in the community,
I would be thinking “What is taking so long? Like just publish the road map. What is taking so long?” And I think the thing that we underestimated,
I underestimated was just how long it would take to transition from a company that was
trying to build one app, add advertising to it and then scale it into an advertising business. That’s what we were doing three months ago,
that was the game plan. We had 160 people trying to build a traditional
company with a traditional revenue model in a traditional way. And then all of a sudden here we were, we
had what people would call a crazy idea when we first started talking about this back in
2011 where instead of building a tradition company with a traditional model with a traditional
way, we’re building a new type of company with a new type of model and a totally different
new way. We’re building a new economy around a new
currency. And so as we got through that token distribution
event, as we realized that “Oh my gosh the world is behind us, we’re going to be able
to execute on this dream we always had, we underestimated how long that transition would
take. We had to go back to becoming a startup. For nine years we optimized and learned how
to build a mobile app and execute in a mobile space in this industry dominated by giants. And here we were going back to the early days
of an industry. Crypto today sort of reminds me of mobile
back in 2009 when we first started Kik and there’s less data out there, there’s less
research and you need to transition from very cautiously, systematically and back into let’s
be scrappy, let’s make that, let’s move quickly. And so that’s the transition we’ve been making
internally, the transition for how we operate, the transition for how we communicate internally
but also externally to default open and that’s taken time. But I know feel like we’re coming out of that
transition and we’re coming out of it with this sort of unique view to not just go-to-market
in the strategy behind cryptocurrencies, but with also the brand and the scale of an existing
consumer app and then with also nine years of very painful lessons learned. The next step on the road map is the number
one priority for me right now is to get to a very simple drag and drop SDK. So that’s the first thing, that’s what we’re
working on now so that out of the box any app out there can take this Kin SDK, drop
it into their app and within five minutes, just five minutes, they can boot up their
app and there will be a balance for their users, there’s ways to earn, and there’s ways
to spend. That’s the number 1 thing we’re working on
right now. We hope to deliver that in Q1. The second thing we’re working on is a much
more scalable blockchain. We’ve been using Ethereum today and to be
honest, I call it the dial-up era of blockchains. It’s like dial-up, like a picture is coming
up like this – click click click click click. And as we’ve been using Ethereum and trying
to shoehorn it into Kik, it’s been super complicated. We have to add these fees automatically on
the user’s behalf and they’re not going to understand they have Kin but they’ll also
need Ether to pay the gas to get the transactions to run. The scale is very low, even at 10,000 users
we’re starting to push the limits of what the Ethereum blockchain can handle. And then even reliability, the Crypto Kitties
craze takes off right as we’re launching the next version of Kin on the Ethereum blockchain
and “oh guess we have to wait for three days while this Crypto Kitties craze passes through.” The number two thing we’re working on is moving
to a new blockchain. The blockchain w’re targeting right now to
move Kin to in the Q2, second quarter time frame next year is Stellar. Stellar was built by the guy who built Ripple
and the thing we really like about Stellar is its custom built for an application like
Kin. It’s not like Ethereum where it’s trying to
be everything to everybody and that makes it general purpose and slow. It’s being focused on what it’s trying to
solve for. Quick, fast, reliable, and inexpensive transactions
for a lot of people. We’re evaluating that now, Stellar makes great
claims around their scalability. We’ll be load testing and confirming those
over the next two to three weeks. Assuming that goes well and Stellar meets
the claims it says it does, we hope to move to Stellar in the second quarter next yea. And finally the third thing I would say is
we want to start showing the world what’s possible with a cryptocurrency. I think cryptocurrencies are really misunderstood. A lot of people look at cryptocurrencies today
like Bitcoin and say “hey this is a great replacement for dollars” or something like
that. “Let’s use it to buy coffee and hamburgers.” But that doesn’t really make sense to us. What we really think Kin, a cryptocurrency,
Kin in this case can be really good at is facilitating exchange of value between people
within the digital world. In the digital world today we have billions
of consumers participating in all these different services, providing value to each other, offering
great advice, hosting great experiences, creating great content, but there’s only one problem
with that today and it’s that none of those people get paid. People are offering so much value but it’s
these big services that are taking that value, layering advertising on top and keeping all
that value for themselves. But when you look at traditional currency
systems, they don’t work for this digital world. This digital world requires a financial system
that can recognize and work for the use case where if some kid in Venezuela hosts a great
group chat for example, and in doing so, someone on the other side of the world wants to join
that group chat and is willing to pay 1/1000000 of a dollar to do that. That’s where our current financial system
just doesn’t work. The current financial system is built for
the physical world and that’s really where we think there is a new opportunity to build
a new system for the digital world, what I call the digital sharing economy. It’s like the sharing economy at Uber, AirBnB,
I drive for you you drive for me, I’ll rent you my apartment, you rent me your apartment,
but now it’s in the digital world. I’ll host a great group chat for you, you
host a great group chat for me. I’ll create a great sticker for you, you create
a great sticker for me. I’ll give you great advice on how to program
your app, you give me great advice on how to program my app. And that’s where we think a digital currency
like Kin can really work. And so the third thing we’re working on is
showing the world what’s possible. We’re working on this, we’ve been thinking
about it for a very long time. We launched Kik Points in 2014. The third thing we’re going to do inside of
Kik and also inside of other apps, is show the world what Kin + X looks like. What does Kin + messaging look like? What does Kin + livestream look like? What does Kin + a game look like? What does Kin + fashion advice look like? And building out all those experiences and
open sourcing them all – giving them all a way – with the goal of inspiring developers
around the world to take up those projects, have a great starting point on day 1, and
having a user base on day 1, and having the ability to monetize on day 1 through the Kin
Rewards Engine. So that’s the third thing we’re going to do,
really build out the integration of Kin inside of Kik, and we’re also going to launch a second
app outside of Kik, open source that from day 1, and show what Kin + X can look like
outside of messaging. Okay, I will refresh. “Is token burning an option you guys considered?” So I think our goal since the beginning was
to set up something that could be fair to everybody. We wanted to be fair to the consumers who
use Kin, we wanted to be fair to developers who would help us build out the ecosystem,
we wanted to be fair to the people who bought tokens in the token distribution event, we
wanted to be fair to the investors and teams who have been building and funding Kik over
the last nine years. So during the token distribution event, we
had a cap of $125 million and we ended up getting $100 million, roughly and so to be
fair, we didn’t keep the rest to ourselves but we distributed the extra to all those
people who bought tokens. We thought that was fair and so the next step
of the process is building this ecosystem. I mean, this is the opportunity we’ve been
waiting for since 2011. The ability to build something both open and
amazing for society like Internet or email but also to build something that’s very valuable
like Facebook or Google. And crypto for the first time could do both
at the same time and it’s never been possible in history before. I think if we can get going, if we can make
that work, if we can all start working together on that. I think that everybody, by working together
will also win together. We’ll all get that upside together. And so that’s our goal. Okay, 11:21 EST. Let’s just see if any questions have jumped
to the top here. “Where do you see Kin in one year?” So I think the thing to know about me is that
I am very optimistic. My mode of operation is trying to figure out
how things might work against the odds and to try and find that path of if this happens,
then that happens and that happens and this might work. And that could have an amazing impact on the
world. And so when you ask me “Where do I see Kin
in one year?” I’m optimistic. But what that means is I’m sharing my optimism
with you and in the short term, it will prove to be optimistic but in the medium term, I
think it’ll prove to be realistic and by setting these high ambitions and being optimistic
we push ourselves to achieve more then we might have been able to other wise even if
ultimately we fall a little bit short in our optimism. So that’s my disclaimer, I’m an optimistic
guy. The goal for Kin this year is to get to the
point where there’s an SDK that any developer can easily integrate and have an experience
up and running in five minutes for their users. And 2, that the SDK runs on a very reliable,
high-scale blockchain – a blockchain that just simply does not exist today. And number 3 is to have more and more developers
coming into that ecosystem and to get that flywheel going. Whereas more developers come in to help build
the ecosystem, that brings in more consumers who are doing more transactions, who are creating
more demand for the currency who are creating a more valuable reward. So that’s the real network effect that we’re
trying to get going. That’s the beautiful thing about a cryptocurrency,
is the more we all contribute to it, the more valuable it gets, the more we all want to
contribute to it. So that’s the goal for this year, it’s to
really get that flywheel going. We have that SDK, it runs on this scalable
blockchain and we’ve inspired developers to take up that SDK and to get this digital sharing
economy going across an increasing number of apps. I think if we could do that this year, next
year in 2018, I think that would be really exciting. “Are there any current talks with other companies
about integrating Kin into their platform when it’s up and running? Will Kin eventually be used as a payment system
for other services like buying coffee or buying fast food?” Those are two different questions. So to answer the first one, yes we’re in talks
with lots of other companies. It’s early days, we don’t have that really
simple SDK yet. We do talks like “Hey, this is what we’re
working on, what do you think. Let’s work on this together.” and there’s excitement around this. I think this excitement comes from that fact
we live in a world dominated by monopolies and even apps as big as Kik are competing
and struggling to monetize and that’s true across the 99% of digital services and developers
out there. So if there’s another way to compete, and
another way to monetize, another way to build value for the world, that gets people excited. And the second question, “Will Kin eventually
be used as a payment system for other services like buying coffee or buying fast food.” For us, the physical world – using cryptocurrencies
in the physical world, makes no sense. When we first started getting really interested
in Bitcoin, we actually went to a conference in January of 2012 and it was just a handful
of people like 12 people plus me, 3 people there. And one was the lead developer on Bitcoin
– the who’s who of cryptocurrency. And I was like “oh I have to be there, I have
to be there. I think Bitcoin is a phenomenal innovation. I think it’s going to revolutionize the world
but I think it’s fundamentally flawed. Here we are and Bitcoin’s passing a quarter
trillion dollars and I still believe Bitcoin is fundamentally flawed. We can talk about that maybe another time. But in terms of what Bitcoin is to me was
– if we wanted to be this medium of exchange, if you wanted it to be something people would
actually use to facilitate the exchange of value between people that Bitcoin would never
achieve this. That was my view, that was my view back in
2012. That’s my view today. Why? The reason why is because the reality is the
entire physical world runs on dollars. Say you’re Starbucks. You sell coffee for dollars, and then you
take that money and you pay for your coffee beans in dollars and you pay your rent in
dollars and you pay your employees in dollars. And then your employees, they receive their
dollars and they go out and buy their groceries in dollars, they pay for their taxis in dollars
and they pay their rent in dollars. And they buy their Starbucks in dollars. The whole world, the whole physical world
runs on dollars. And that is as it should be. That’s reality, that’s the way it should be. And so when you talk to me about “oh what
if we could buy our Starbucks in Bitcoin” it makes no sense to me. So let me get this straight, I’m an employee,
I get paid in dollars, I’m going to convert that to Bitcoin, I’m going to go to Starbucks
and buy a coffee in Bitcoin, they’re going to immediately convert it back to dollars
to pay me as their employee. Why don’t we just stay in dollars? And that is the way the world has played out. I think I read some stat that there are less
dollar-based transactions of Bitcoin today than there were three or four years ago. People are realizing Bitcoin is great as a
stored value, but it is not a medium of exchange. So this is what gets us excited about Kin
as what we’ve been thinking of over the last six years now is to facilitate the exchange
of value in the digital world. In the world where all these consumers are
coming to all these different services, providing value but not getting compensated, that we
could fix that. And then second – all these developers that
are being beaten down by these monopolies, being copy and crushed at every turn have
no possible business model because they don’t have the data and scale to effectively monetize
for advertising – going to them and saying “hey, help us create this new world for consumers
and the degree to which you help us you will get rewarded in Kin.” By working together as consumers and developers,
everybody working together we could build this new world, a digital sharing economy
that could be amazing for humanity. So that’s where we think the real opportunity
is, we think the physical world runs in dollars and that makes sense and that’s the way it
should be. But we think there’s a real opportunity in
the digital world. And with that, it is now 11:30 EST so I just
want to take this moment and say thank you for tuning in, for answering these questions. This is something we’ll try doing on a monthly
basis for the next three months and just see how it goes. We’re sort of running on the fly here, adjusting
to this, we’re not a private company who’s trying to build an app, we’re a crypto ecosystem,
we’re trying to spark a movement. And for that to work, it’s not just 160 people
working here in an office. For it to work, it’s going to require millions
of people all around the world contributing and working together. Because of that, it made sense to try and
do this question period in a new and open way. So we hope you enjoyed, we’ll see you next
time. Thanks.

Add a Comment

Your email address will not be published. Required fields are marked *