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Why Security Tokens Are Compliant

Expert Interview


 
Randall Crowder, COO, Phuncoin

Randall Crowder

Randall is passionate about new venture creation and the innovative spirit that fuels entrepreneurs and advances in technology. As an active investor and entrepreneur, he understands what it takes to successfully launch and grow a new business. He regularly publishes articles and speaks on entrepreneurship, venture capital, healthcare and the rise of blockchain technology and cryptocurrencies.

Over the past decade, Randall has led over 40 angel investments and deployed over $60M across 14 companies as a venture capitalist. Randall is a co-founder and Managing Partner at TEXO Ventures where he focused on tech-enabled health services and he is the sole founder and Managing Partner at Novē Ventures where he focuses on investing in existing companies looking to leverage blockchain technology. Prior to TEXO, he led the Central Texas Angel Network (CTAN) to becoming one of the most active angel networks in the country. Randall also founded and launched Texas Venture Labs (TVL) at UT in order to give the next generation of investors unique experiential learning opportunities outside of the classroom.

Before getting involved in venture and entrepreneurship, Randall was a Captain in the United States Army and is both Airborne and Ranger qualified. He served over six years active duty and deployed twice in support of Operation Iraqi Freedom where he was awarded two Bronze Stars for his actions during combat operations.

Randall holds a BS from the United States Military Academy at West Point and an MBA from the McCombs School of Business. He is also a Kauffman Fellow and member of the Young Entrepreneur Council (YEC).

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Transcript


 

Adam Chapman:

Hey everybody, it’s me again, Adam Chapnick with the Security Token Academy, and we are here in Los Angeles. It’s CIS 2019, and we are rejoined by friend of the show, COO of Phunware himself, Mr. Randall Crowder. Thanks for being back.

Randall Crowder:

I’m a repeat offender.

Adam Chapman:

Repeat offender, that’s right. Returning champion, let’s call it that.

Randall Crowder:

I like that better.

Adam Chapman:

Yeah, that’s a little better. When last we heard from you, you were embarking on some pretty exciting stuff vis a vi the Security Token theme. Why don’t you, before we jump into that, though, just quick refresher for those who didn’t get to see the first video. What’s Phunware and what are you guys up to?

Randall Crowder:

Absolutely. Phunware’s a ten year old tech company based in Austin. Offices in San Diego, and Newport Beach, and Miami. Been around for ten years. We built the first NASCAR app, the first NFL app, we build most of Fox’s mobile applications. And then it’s kind of turned into a data company. We see a lot of devices that have our software on them. We’re kind of ... we consider ourselves a full integrated Cloud platform for mobile. In everything you need to succeed on mobile, we have something that can add value to you and your customers, and through doing all that, we started seeing an incredible amount of data.

We see about a billion active devices touch our platform every single month. Now, the thought process is how do we use that data, use that kind of scale and reach to help brands engage consumers in a more authentic way. Quite frankly, between you and me, they’re tired of wasting money at Facebook or Google and not really understanding what they’re getting, and how they reach the right people at the right time with the right message. And that’s what we want to do, and we want to enable all of that with blockchain. It’s been fun.

Adam Chapman:

Amazing.

Randall Crowder:

Pun intended.

Adam Chapman:

Yeah, it’s been Phun. Okay, can you restate the number of devices that touch your platform each month?

Randall Crowder:

Our founder-

Adam Chapman:

What is that number?

Randall Crowder:

I’ll tell you. Our founder, Alan Knitowski is a visionary, he really is. And when he first set out to build the company, he had an idea to create a Phunware ID for every human being on the planet with a mobile device. So far we’ve created about 2.5 billion Phunware IDs, and we see about a billion active devices every month in a variety of different ways. The thing that I think a lot of people don’t understand about the everyday consumer is they’re not tied to just one app, or one location, or one experience. When you’re really trying to build an audience and understand your customer, you’ve got to look at them holistically and dynamically across their daily lives.

We look at where you are in time and space, different apps you use, everything that represents you. We kind of call it your digital self. How do you really take that digital self and make sure that it’s verifiable, contributable? And then we can use that to get brands to the right person, and get them the right message at the right time, in the right place.

Adam Chapman:

Amazing. You have become a data play as an overlay to all of those users, wow, to connect meaningfully -

Randall Crowder:

It’s just part of the play. It’s really about using mobile as this incredible platform to create a new way for brands and consumers to engage in a very authentic, very seamless way. If you think about it, Hollywood has been showing all of these wonderful things in which technology is going to somehow serve us. They once told us we were going to get flying cars, which I still feel really ... I don’t know if -

Adam Chapman:

I’ve seen videos. I’ve seen them.

Randall Crowder:

I don’t know if we’ll ever get there.

Adam Chapman:

They’re not quite here.

Randall Crowder:

But, we don’t use technology nearly as much as Hollywood would have us believe. Go to the grocery store. When do you use technology?

Adam Chapman:

Check out.

Randall Crowder:

Maybe when you cross an RF signal to open the door, and then at check out. But unless you’re saying, “Hello Siri,” or, “Okay, Google,” there’s all this latent potential in your mobile phone that’s not really being served up to benefit you, and it’s not being served up to benefit the brand. How do you curate all of that data, all of that information, all of that really cool virtual world insight and use that to inform real world interactions? That’s what we’re all about.

Adam Chapman:

Amazing. How did all of that translate into a security token offer?

Randall Crowder:

Since we last met we actually went public.

Adam Chapman:

Mazel tov. That’s fantastic.

Randall Crowder:

That was a painful process, but I think it was important. As I have given y’all so much credit for, you’re really ushering in a next wave of credible blockchain applications. Hopefully, we’ve finally heard the last of Lambos and the silliness that is tied, that really I think held us back a little bit. Organizations and institutions, they want that credibility. For us, going public was just as much a mechanism to show the world, “Hey, here we are. We’re transparent. This isn’t a scam. Fully auditable, we want to do everything right.”

Adam Chapman:

Compliant in every way, right?

Randall Crowder:

Yeah, and we want the world to have an open kind of dialogue with us. Think of how many times somebody threw up a website, they never even the met, the team had fake social media sites, and then they raised tens of millions of dollars. The next wave of blockchain is going to require a certain level of credibility and we think being public provides us that. The security token aspect is also really the only compliant thing that exists today. I think entrepreneurs don’t want to hear that because they just want to raise quick, easy money, but if you do the right things, and you approach the SEC in a way that is playing by the rules that they’ve already established, you can go pretty far in establishing a blockchain enabled ecosystem.

That’s what we wanted to do with PhunCoin is really say, “Okay, if we believe that data is one of the most valuable assets on the planet, could we introduce a security token that leveraged our existing platform to allow people to fundamentally tokenize themselves?” You can tokenize a venture fund, you can tokenize a building, why not the digital representation of you? Every time you engage with any device, someone is making money. Just not you.

Adam Chapman:

It’s just not me.

Randall Crowder:

Facebook’s making money, Google’s making money, Instagram. Everybody’s making money except for the source of the data. You have all these brands having to go to the only game in town, and they have this black box approach to everything. But if you could create a platform that allows brands to go directly to the source, a one to many if you will ... That’s what our knowledge graph basically represents, this idea that all of this information curated could be controlled by a user on their phone with self-sovereign identity tied directly to you, so that every time a brand tries to reach you they know exactly who they’re reaching any why, and what add unit was shown, and what engagement they received, and all that activity around that interaction.

That’s literally the platform we’re building [so that people can say, “I want to use a security token to tokenize myself and allow brands to engage one on one with me rather than having to go to Facebook.”

Adam Chapman:

Incredible.

Randall Crowder:

It’s a big idea -

Adam Chapman:

It’s a big idea.

Randall Crowder:

It’s a shot for the fences, but we have an incredible team, our engineers. And we have 200 employees. I think so many projects ... and I hate that word, crypto projects, they failed because they weren’t real teams. They didn’t have real experience. They haven’t been through the life cycle of trying to commercialize anything. Our engineers are world class, and they’ve been in the trenches together for so long, our executive team is world class. While you’re sleeping, or while you’re wringing your fist at exchanges, we’re working. We’re constantly living and breathing this idea of creating a new ecosystem that leverages blockchain for the very best things, decentralize data and to give control back to the user.

Adam Chapman:

Amazing. In a word, amazing. Or a better word, Phun.

Randall Crowder:

Yes, exactly. I like that even better, well done.

Adam Chapman:

Thank you for giving us an update on all of that incredible visionary work you guys are doing. You have to come back -

Randall Crowder:

Absolutely.

Adam Chapman:

Every six months, keep us engaged. Thanks, Randall for joining us.

Randall Crowder:

Thank you so much for having me. I appreciate it.