The Exchanges

Q uses for the bottom of their couches. What's interesting is if I buy in Snoop Dogg's metaverse, the land next to him, and I now want to furnish my house, I'm actually just buying the licensed crate and barrel design generated by three kit, picking my cushion cover the distance and sticking it in my living room next to Snoop Dogg and his metaverse. That actually becomes the product, right?

A So there's two paths, right? You, you, you do have a digital product. Maybe you want it shipped, right? I mean, it could be, or it's a pure digital for digital, which has like teeth on the side of the couch. It becomes a pure digital brand, but still there's configurations, options. Maybe you want to personalize it. Maybe you want to make an NFT out of it. And so millions of options create. That's what we're seeing, right? Digital to real. Cause the brands, the manufacturers have one advantage that can make you the product. So if that's a strategy, right, which is you're in Snoop Dogg's house. You're configuring whatever you're configuring. And then by the way, I want to buy it or buy an NFT of it, or it's totally like random, right? Like, um, a table with fur on it, right? And something wacky and you'll never ever buy that, but it's cool. It's your digital brand. It's your digital asset. And that's the interesting thing I think about the, again, 99% of folks haven't even done web two point yet in our world. But when you go into that world, it's like, who are going to be the brands to actually rule that? I mean, you could have, as you're already happening, You and I can come up with the brand that's digital. And that's like the considered a luxury watch for all I care, you know, but it's a digital watch. And that's kind of the fascinating thing about that world. Like who's goin…

AI assessment note: “So there's two paths, right? You, you, you do have a digital product.”

Q Millions of options. Yeah. Okay. And put this on a timeline for me. What year did you write the first line of code for the product?

A So the platform, so that's just a cool story that to make this work, you have to kind of bring two worlds together. So basically Ben Houston is the founder of the company. He started in 2012 and he was a top supplier of visual effects to Hollywood. So like movies like, you know, ILM or movies like Star Force, Force Awakens, T-Roy Utilities. He got a lot of credit for that. And then in 2015, he met, um, A couple of folks from a small company called Shopify who joined the company and they said, Hey, let's make this for e-commerce. So the, the, the knowledge that the sort of the, the, the IP has been built over many years, but the platform itself is three and a half years old. So we kind of, when myself and Goddard got into the company, we brought in with us, you know, the family and now we're a 120 people. We decided that, Hey, let's, let's cuddle, you know, basically it's created a brand new platform headless. Let's reimagine all this. So, so the code is written three and a half years ago on the platform, although the IP, like the math, how to do that, it's been building up for a while. So that's really cool.

AI assessment note: “so the code is written three and a half years ago on the platform”

Q Well, Matt, so can we get more specific? Can we talk about one of your current costs? So Crate and Barrel uses you. So let's be really specific. You're trying to buy a couch on Crate and Barrel. What are you, what is Threekit doing to help Crate and Barrel?

A Yeah. So visualize the product digitally. So, so think about you have every product that microphone that you talk it into has many, many, um, options. And when you go on the website or create a barrel, you have couches, just to accomplish products. They have to be visually beautiful. You want to see the actual couch and therefore you have to see all the images of all the options and therefore lies the problem most. So that's, we help them. We had tailor-made with the golf clubs. Golf club has a 100,000 options. It's just different colors. It's just different grips, just different shafts. But really what that means is if you don't want to represent it, you got to do it digitally. Otherwise you just have a picture of a club, a picture of a couch of the microphone. And that was sort of like acceptable, like, but started, we sort of trend right before COVID. And after the pandemic, it's like, wait a minute, I'm online. Let's see that microphone. I just chose a blue one. I'm making it up with a sticker. Maybe you want to personalize it, Nathan's special microphone. How come I don't see that? How come I still see the stock one? And that's kind of the thing we're solving.

AI assessment note: “visualize the product digitally. So, so think about you have every product”

Q So your biggest, your biggest customer paying around half a million a year, how many, like, are they, are they paying based off number of SKUs or like, what's the utility metric?

A It's like a total transformation. Like, yeah, it's SKUs mostly like basically the scope is just giant, right? Whereas like an SMB customer, they have one product, right? You could have one, you know, not even microphone. A lot of them make like, let's see a dog crate. We have a great customer making dog crates and how do you sell it? High value. Usually these are high consideration items because You kind of want to understand, you know, if I'm changing things, what does it look like? It's a high consideration. So in that case, the impact dog crates, right? The wonderful, um, dog crates in that case to bring them to life, you know, they're a very small startup, really. You need digital, but that's on that end.

AI assessment note: “yeah, it's SKUs mostly like basically the scope is just giant”

Q So who's paying for the product today? Give me a customer example.

A If you can tailor made, let's say tailor made golf drivers. And, and maybe look at me, let me give you the insight of what happened to us because I find the best ideas come from, Seeing things, you know, you know, I also do, uh, entrepreneurs and, and ideally it's something you have an understanding of, right? You don't have to be an expert, but you see some patterns and the pattern we saw in the configuration space. So think of our customers with big machines is like manufacturing company. They need a quote for a very complex product, right? This is like 2005 and six with big machines, right? Okay. You put this together. Well, what's it look like? Well, we can show you it's too complicated. Okay. That's early. You're like this message. You're like, hmm, maybe one day people want to see the product. You know, but it was sort of like, not a must have. And then when we got into steel break, we got into Salesforce. Um, I was there for a couple of years with Godard integrating this. You start seeing this demand. And this is really obvious, Nathan, honestly, but it's one of the things you have to need signals. People start demand to see the product. Like, let me give you a specific example. When you go on e-commerce websites, right?

AI assessment note: “let me give you the insight of what happened to us”

Q And then it gets getting, getting, you know, fast forwarding to today, right? So how many total customers are you serving today across these four or five different segments?

A Um, and obviously growing. And what we're seeing is really interesting. The, again, that's, I'm telling you no news here with pandemic, this is starting to become like major FOMO because, um, yeah, I think people are realizing like my product just doesn't exist and the metaverse and NFTs, by the way, just to give you some fun buzzwords, that's obviously like way out there, but it's really challenging the brands and the effectors to think like, wait a minute, if I don't, if I don't have a digital product version, It's better to send a real product. I mean, if you can experience it online, place it in the AR and then get it shipped, that's awesome. But also in the pure digital world, let's, let's just not even, I mean, wherever you want to go with this, but is it far, far away or just some far away? I'm not even ready for like web two point O what's happening with three point O. So it's really fascinating to, to see that pressure, the FOMO, because the one that unlocks it, You know, in the space, they're getting outsized returns. Essentially, it's what we're seeing, and that's kind of, that's kind of, um, a fascinating place to be right now.

AI assessment note: “Um, and obviously growing. And what we're seeing is really interesting.”