Tag: DiPhy

The Digital Transformation of Consumer Experiences – Trends We See Accelerating

The secular shift from physical to digital commerce was well underway before the global pandemic. What we have seen in the past six months is an acceleration of this trend which is further blurring an already blurred line between the two.

When retail stores were forced to close, brands like Lululemon turned their physical stores into fulfillment nodes for their online business, with store employees coming in to pick, pack, and ship from store inventory. At retailers like Target and WalMart, curbside pickup and store-based delivery quickly became mainstream ways for customers to shop. At grocers like Kroger and QFC, Instacart and grocers’ own shelf-picking and delivery services overlaid digital transactions on physical commerce infrastructure. There is no question that the shift we have seen in 2020 will create opportunities for years to come, both in accelerating more transactions from physical to digital and in leveraging the existing physical retail infrastructure to support digital use cases. These are markets where Madrona has been investing for 25 years, and they continue to be focus areas for us. The commerce-related investment themes we talked about in 2019 are increasingly relevant today. This post updates our thinking on how retail is undergoing a significant shift – and outlines the areas we think are ripe for innovation, and for investment.

Digital+Physical

As we think about the intersection of the digital and physical more broadly, the shift of in-person experiences to remote/digital has been accelerated by the global pandemic. From ceremonies and celebrations, to social outings to health visits and entertainment, the activities we once felt (very strongly!) could only happen in-person are shifting online. Initially this was out of necessity, but over time we believe online will be a significant portion of the market, as the quality and convenience are demonstrated and becomes socially acceptable. In this post, we’ll cover four markets where this dynamic applies: Telehealth, Shopping (product discovery), Fitness, and Entertainment.

Fitness and healthcare are markets where we’ve been tracking the shift from in-person (physical) to digital and have been hunting for opportunities. Live (in-person) entertainment and product discovery (a subset of the offline shopping experience), are newer verticals where we are beginning to see or expect to see major shifts of attention and dollars to digital. We believe there are compelling opportunities for new companies to be built and existing companies to accelerate growth and share across all four markets.

Telehealth

As we have been unwilling or unable to visit our doctors’ and medical professionals’ offices during Covid, large segments of the medical industry have been forced to shift to a digital-first mode of care. This means seeing and understanding patients via high fidelity video, connected sensors, and other technologies to triage and diagnose potential issues as well as perform on-going monitoring and support.

The magnitude of this shift and the opportunity it creates cannot be overstated. The healthcare market is enormous: US total market size in 2019 was approximately $2.7 trillion. If you strip out hospital care, pharmaceuticals, and nursing/home health, you’re left with about a $900 billion health services market. We believe a large portion of this $900 billion can ultimately be delivered remotely through digital means.

One vertical where we believe there is opportunity for multi-billion dollar businesses is mental health. Approximately 46 million Americans report having mental health issues, with only 43% of those reporting having received treatment. A recent survey of therapists found that during Covid, 75% of therapists had shifted to digital-only therapy sessions while 16% were doing a combination of digital and in-person.

Mental health is a compelling category for a number of reasons. First, both 1:1 and group therapy sessions can translate well to video. Second, by relaxing constraints like geographic proximity between patient and therapist, scheduling is easier, more patients can be served and no “office” means lower overhead and lower cost of care. Additionally, for the youth segment of the mental health industry where conditions such as anxiety and depression are skyrocketing, digital is a seamless and native means of communication. Finally, industry studies, while early, suggest parity in effectiveness of in-person and virtual mental health therapy delivery.

The structural challenges around areas like insurance reimbursement/coverage and HIPAA compliance will be resolved over time — we have seen many fast-tracked solutions and progress in recent months — and it’s likely that the ultimate model of delivery for mental health will be a hybrid of in-person and digital. But the prospect of a digital-first delivery method for health services in general and mental health services, specifically, is a compelling opportunity for health consumers and the industry overall. It’s still very early days for companies being built in this category, but there’s no shortage of opportunities for innovation around technology, customer experience, and business models in the delivery of digital/remote mental health services into the mainstream.

Product Discovery (Shopping)

Much of the magic of physical in-store shopping is how it enables discovery, learning, and commerce in a single place, with the core ingredient being people. We find expertise every time we go to the store. For example, want to start a vegetable garden and don’t know where to begin? Head down to your favorite specialty garden shop or big box home improvement retailer to get advice from an expert. Need a new pair of running shoes, but you aren’t sure which ones work best with your running style? Head down to the specialty running store and they’ll ask some questions and watch you run. Want to take the kids camping but have no idea what you need? Head over to REI and an employee will outfit you head to toe based on the trek you will be taking. Physical retail is magical because it combines the expert knowledge of the human working at the store with the transaction itself. Conversely on the web, while there is no lack of content and inventory, the process of discovery, learning, and aided purchasing are broken. For example, Amazon has a massive amount of content but it’s not really a good place to discover new products or get expertise in a given category. Even the websites of the specialty retailers with incredible product and category knowledge really don’t get the job done – because those businesses are still oriented toward the in-person expertise model.

In a world in which we are taking fewer trips to the retail store, and the core physical retail business model is in peril, it begs the question: How do we create the digital analog of a more complete shopping experience? How do we bring the wealth of retail employee expertise and experience online? At Madrona, we see this as a big opportunity and believe that successful solutions will offer a magical combination of discovery, learning, and commerce (with a bit of entertainment), built into a highly integrated and seamless customer experience.

What does this look like? We’re not sure we’ve seen it yet, but we have a few ideas as to where there is opportunity for innovation. In the legacy experiences category, TV shopping through networks such as QVC and HSN is a great example. Discovery is core to that experience, with a curated set of products found all over the globe by the QVC/HSN sourcing teams as well as a host who walks viewers through the features and benefits of products with finely honed sales pitches, informed by data, to get you to purchase. “Buy now!” has shifted significantly from a phone number to navigate to the URL, but there is a direct call to action and connection between the content and the commerce. QVC/HSN did $11 billion in TV-driven retail revenue last year … while not the size of Amazon, it is a significant business. We think someone ought to re-invent HSN/QVC for the digitally native buyer.

Two new experiences we find fascinating were built outside of the U.S. market, but portend opportunities anywhere. One is ShopShops, a Chinese e-commerce company that uses live video to help domestic Chinese consumers shop retail shelves for the hottest brands in L.A., New York, and Miami (and soon, many other places). Like QVC, ShopShops hosts showcase merchandise and provide a curated retail experience, but they do so in partnership with physical retailers and brands, bringing products and knowledge together, and providing an integrated way to buy. In a world in which consumers want to see what’s new, but don’t want to venture out to the retail stores themselves (or the retail stores are halfway around the world), this is a novel concept that uses existing retail infrastructure and live video to enable discovery, learning, entertainment, and commerce, all over the world. Another is BulBul, an India-based company that enables anyone to build a live streaming channel through which they can promote and sell products. This is sort of like a crowdsourced QVC; instead of a managed production, BulBul is a marketplace model. We know that marketplace models don’t always deliver pristine customer experiences but leveraging the expertise of the crowd for any product category is an interesting idea.

We believe that elements of all of these can drive the translation of the discovery, learning, and commerce that happens in-store to a digital experience.

Fitness

While previously large group fitness classes were a popular way to get a workout and be social, these classes have been replaced with home gyms and outdoor workouts since Covid started. Even 1:1 sessions with trainers, which typically take place in gyms with shared equipment, have faced similar declines due to the nature of the in-person fitness environment. The market for individual and group training is enormous. The quality of the instructor and their ability to motivate you, watch your form, and give feedback is easy to do in-person. Showing up for the other members of your class and encouraging each other to achieve your goals is also effective in-person. So, how do these translate digitally?

Peloton demonstrated (prior to Covid, but also accelerated by Covid) the effectiveness of designing a digital experience around and into a physical piece of equipment – the spin bike. We’ve seen from Peloton and others the extension of this model of incorporating live instruction and community into other pieces of equipment such as the treadmill, the rowing machine, the multi-trainer, and even the gym mirror. Some of these hardware-centered models will work, although being first to market is key because it’s unclear how many Peloton-like offerings can exist (both literally and financially) in a given household. It may be that, like in the wearables market, there’s one new category creator (Fitbit) and some large incumbents (like Apple) who build or buy their way in, leveraging their power of product development, marketing, and distribution.

But… is equipment-centered the only opportunity to deliver a digital one-to-one or one-to-many fitness experience that both lives up to its analog/in-person counterpart, and provides a compelling business model? We believe no, and that there is a lot of room for this market to grow.

Entertainment

Professional sports are coming back (kind of) … but without fans in the stands. The business model for live professional sports has a huge in-person component: ticket sales, parking, in-venue merchandise sales and concessions comprise a huge percentage of professional sports revenue. But the other big component for professional sports is broadcast revenue, which exists with fans or without. While broadcast revenues won’t make up for the shortfall from in-venue experiences, professional sports will find a way to survive. The movie industry should hold up alright as well (although perhaps not the theaters), as new movies go straight to over-the-top and subscription video services.

But what happens to other in-person entertainment experiences without an existing broadcast or video component and revenue stream? Theater, comedy, and music all depend heavily on ticket sales and ancillary revenues generated from in-venue and sponsorship experiences.

We are particularly interested in professional music given the sheer magnitude of the market. Live Nation / TicketMaster is facing an existential threat with revenues down a whopping 98% at the end of June 2020 as compared to the end of June 2019. The market needs radical rethinking on how to diversify and move part of the consumer experience to digital. Over the past few months, it has become clear that Live Nation and Ticketmaster’s strategy is to wait-it-out instead of putting serious resources into digital. Why isn’t the music industry doing more to drive innovation in content delivery and business model innovation for live experiences?

An argument we’ve heard from several in the industry is that certain elements of the live concert experience simply don’t translate to digital. The group of friends you go to the concert with, the pre-party in the parking lot or at the bar or restaurant, buying and wearing the shirt in-venue, singing back the song as part of the crowd, the energy of thousands or tens of thousands of bodies swaying to the music, the production of the show itself. The sounds, the smells, the experiences in-venue simply can’t translate to digital, and we shouldn’t try.

While we think there’s some truth to that argument, we also think there is opportunity for new digital experiences to be good enough to at least capture some of the massive market at stake. The show must go on for artists to survive and sponsors and brands are searching for ways to reach an audience during the current live events vacuum.

Is there an opportunity to translate live music experiences to digital with a monetization model that works? We believe there could be, and that it’s going to take a lot of experimentation and innovation to figure it out. “Twitch for live music” probably isn’t going to work (just to use an analog; this is not a critique of Twitch). There’s some interesting experimentation with virtual concerts, including leveraging artists’ distribution (e.g., Travis Scott on Fortnite). There’s live video on Instagram Live and sites like LiveConcertsStream, and, of course, there’s always Zoom’s video conference platform which can be repurposed for events like these. But do we sell tickets, or do we accept tips? Do artists perform from their homes, or use small studios and production venues with high fidelity video and sound? Sports like boxing have found a way to meld an in-person experience with a remote (TV) experience, where pay-per-view revenue is a larger source of revenue than in-person revenue. Can pay-per-view (or something like that) be additive to the live music model?

In Conclusion

Now is the time for experimentation and testing, not just for music, but for all of these categories. We are excited to see new business models that bridge the digital and physical world and enable new experiences along the way. From fitness to music to shopping to mental health, the opportunities to build are endless and we are eager to meet entrepreneurs innovating in these categories.

Investment Themes for 2019

2018 was a busy year for Madrona and our portfolio companies. We raised our latest $300 million Fund VII, and we made 45 investments totaling ~$130 million. We also had several successful up-rounds and company exits with a combined increase of over $800 million in fund value and over $600 million in investor realized returns. We don’t see 2019 letting up, despite the somewhat volatile public markets. Over the past year we have continued to develop our investment themes as the technology and business markets developed and we lay out our key themes here.

For the past several years, Madrona has primarily been investing against a 3-layer innovation stack that includes cloud-native infrastructure at the bottom, intelligent applications (powered by data and data science) in the middle, and multi-sense user interfaces between humans and content/computing at the top. As 2019 kicks off, we thought it would be helpful to outline our updated, 4-layer model and highlight some key questions we are asking within these categories to facilitate ongoing conversations with entrepreneurs and others in the innovation economy.

For reference, we published our investment themes in previous years and our thinking since then has both expanded and become more focused as the market has matured and innovation has continued. A quick scan of this prior post illustrates our on-going focus on cloud infrastructure, intelligent applications, ML, edge computing, and security, as well as how our thinking has evolved.

Opportunities abound within AND across these four layers. Infinitely scalable and flexible cloud infrastructure is essential to train data models and build intelligent applications. Intelligent applications including natural language processing models or image recognition models power the multi-sense user interfaces like voice activation and image search that we increasingly experience on smartphones and home devices (Amazon Echo Show, Google Home). Further, when those services are leveraged to help solve a physical world problem, we end up with compelling end-user services like Booster Fuels in the USA or Luckin Coffee in China.

The new layer that we are spending considerable time on is the intersection between digital and physical experiences (DiPhy for short), particularly as it relates to consumer experiences and health care. For consumers, DiPhy experiences address a consumer need and resolve an end-user problem better than a solely digital or solely physical experience could. Madrona companies like Indochino, Pro.com and Rover.com provide solutions in these areas. In a different way, DiPhy is strongly represented in Seattle at the intersection of machine learning and health care with the incredible research and innovations coming out of the University of Washington Institute for Protein Design, the Allen Institute and the Fred Hutch Cancer Research Center. We are exploring the ways that Madrona can bring our “full stack” expertise to these health care related areas as well.

While continuing to push our curiosity and learning around these themes, they are guides not guardrails. We are finding some of the most compelling ideas and company founders where these layers intersect. Current company examples include voice and ML applied to the problem of physician documentation into electronic medical records (Saykara), integrating customer data across disparate infrastructure to build intelligent customer profiles and applications (Amperity), or cutting edge AI able to run efficiently in resource constrained edge devices (Xnor.ai).

Madrona remains deeply committed to backing the best entrepreneurs, in the Pacific NW, who are tackling the biggest markets in the world with differentiated technology and business models. Frequently, we find these opportunities adjacent to our specific themes where customer-obsessed founders have a fresh way to solve a pressing problem. This is why we are always excited to meet great founding teams looking to build bold companies.

Here are more thoughts and questions on our 4 core focus areas and where we feel the greatest opportunities currently lie. In subsequent posts, we will drill down in more detail into each thematic area.

Cloud Native Infrastructure

For the past several years, the primary theme we have been investing against in infrastructure is the developer and the enterprise move to the cloud, and specifically the adoption of cloud native technologies. We think about “cloud native” as being composed of several interrelated technologies and business practices: containerization, automation and orchestration, microservices, serverless or event-driven computing, and devops. We feel we are still in the early-middle innings of enterprise adoption of cloud computing broadly, but we are in the very early innings of the adoption of cloud native.

2018 was arguably the “year of Kubernetes” based on enterprise adoption, overall buzz and even the acquisition of Heptio by VMware. We continue to feel cloud native services, such as those represented by the CNCF Trail Map, will produce new companies supporting the enterprise shift to cloud native. Other areas of interest (that we will detail in a subsequent post) include technologies/services to support hybrid enterprise environments, infrastructure backend as code, serverless adoption enablers, SRE tools for devops, open source models for the enterprise, autonomous cloud systems, specialized infrastructure for machine learning, and security. Questions we are asking here include how the relationship between the open source community and the large cloud service providers will evolve going forward and how a broad-based embrace of “hybrid computing” will impact enterprise customer product/service needs, sales channels and post-sales services.

For a deeper dive click here.

Intelligent Applications with ML & AI

The utilization of data and machine learning in production has probably been the single biggest theme we have invested against over the past five years. We have moved from “big data” to machine learning platform technologies such as Turi, Algorithmia and Lattice Data to intelligent applications such as Amperity, Suplari and AnswerIQ. In the years ahead, “every application is intelligent” will likely be the single biggest investment theme, as machine learning continues to be applied to new and existing data sets, business processes, and vertical markets. We also expect to find interesting opportunities in services that enable edge devices to operate with intelligence, industry-specific applications where large amounts of data are being created like life sciences, services to make ML more accessible to the average customer, as well as emerging machine learning methodologies such as transfer learning and explainable AI. Key questions here include (a) how data rights and strategies will evolve as the power of data models becomes more apparent and (b) how to automate intelligent applications to be fully managed, closed loop systems that continually improve their recommendations and inferences.

For a deeper dive click here.

Next Generation User Interfaces

Just as the mouse and touch screen ushered in new applications for computing and mobility, new modes of computer interaction like voice and gestures are catalyzing compelling new applications for consumers and businesses. The advent of Alexa Echo and Show, Google Home, and a more intelligent Siri service have dramatically changed how we interact with technology in our personal lives. Limited now to short simple actions, voice is becoming a common approach for classic use cases like search, music discovery, food/ride ordering and other activities. Madrona’s investment in Pulse Labs gives us unique visibility into next generation voice applications in areas like home control, ecommerce and ‘smart kitchen’ services. We are also enthused about new mobile voice/AR business applications for field service technicians, assisted retail shopping (E.g., Ikea’s ARKit furniture app) and many others including medical imaging/training.

Vision and image recognition are also rapidly becoming ways for people and machines to interact with one another as facial recognition security on iPhones or intelligent image recognition systems highlight. Augmented and virtual reality are growing much more slowly than initially expected, but mobile phone-enabled AR will become an increasingly important tool for immersive experiences, particularly visually-focused vocations such as architecture, marketing, and real estate. “Mobile-first” has become table stakes for new applications, but we expect to see more “do less, but much better” opportunities both in consumer and enterprise with elegantly designed UIs. Questions central to this theme include (a) what ‘high-value’ new experiences are truly best or only possible when voice, gesture and the overlay of AR/VR/MR are leveraged? (b) what will be the limits of image (especially facial recognition) in certain application areas, (c) how effective can image-driven systems like digital pathology be at augmenting human expertise, and (d) how will multi-sense point solutions in the home, car and store evolve into platforms?

For a deeper dive click here.

DiPhy (digital-physical converged customer experiences)

The first twenty years of the internet age were principally focused on moving experiences from the physical world to the digital world. Amazon enabled us to find, discover and buy just about anything from our laptops or mobile devices in the comfort of our home. The next twenty years will be principally focused on leveraging the technologies the internet age has produced to improve our experiences in the physical world. Just as the shift from physical to digital has massively impacted our daily lives (mostly for the better), the application of technology to improve the physical will have a similar if not greater impact.

We have seen examples of this trend through consumer applications like Uber and Lyft as well as digital marketplaces that connect dog owners to people who will take care of their dogs (Rover). Mobile devices (principally smartphones today) are the connection point between these two worlds and as voice and vision capabilities become more powerful so will the apps that reduce friction in our lives. As we look at other DiPhy sectors and opportunities, one where the landscape will change drastically over the coming decades is physical retail. Specifically, we are excited about digital native retailers and brands adding compelling physical experiences, increasing digitization of legacy retail space, and improving supply chain and logistics down to where the consumer receives their goods/services. Important questions here include (a) how traditional retailers and consumer services will evolve to embrace these opportunities and (b) how the deployment of edge AI will reduce friction and accelerate the adoption of new experiences.

For a deeper dive click here.

We look forward to hearing from many of you who are working on companies in these areas and, most importantly, to continuing the conversation with all of you in the community and pushing each other’s thinking around these trends. To that end, over the coming weeks we will post a series of additional blogs that go into more depth in each of our four thematic areas.

Matt, Tim, Soma, Len, Scott, Hope, Paul, Tom, Sudip, Maria, Dan, Chris and Elisa

(to get in touch just go to the team page – our contact info is in our profiles)

When the Digital World Meets the Physical World to Solve Real World Problems

We have been experiencing the modern era of our digital lives merging with the physical world, what I call Di-Phy, since the first iPhone in 2007. This blending of the two worlds is all around us, through wearable exercise devices, package or luggage delivery service updates, car sharing and even food ordering. But we are seeing through new advanced technologies an incredible expansion and success in these Di-Phy services. At Madrona we have invested in this market heavily (Rover, Redfin, and Impinj to name just a few) and we are now seeing three trends come together which will move this confluence to a new level and make DiPhy integral in our lives and a change agent for new industries.

  • The ability to compute and intelligently interact at the edge
  • The near ubiquity of smart devices that run apps connecting our digital and physical worlds
  • The development and deployment of state of the art sensors & robotics

These developments combined with cloud technologies that run as a service enable the building of more automated and intelligent applications that make our lives easier and better.

To illustrate the types of solutions beginning to emerge, let’s look at two different industries that are seeing massive changes due to the revolution in DiPhy – agriculture & mobile fueling – and a platform for running deep learning models at the edge.

Agricultural Automation

Many use cases for applied machine learning, robotics and general automation in the commercial world are only beginning to come to market. One area we are seeing a lot of innovation is in agriculture – these solutions span preparing the ground, planting, weeding, and caring for the nation’s food. One of Madrona’s newest investments is both a bet on this trend and on an incredibly talented serial entrepreneur.

TerraClear is a company recently launched by Brent Frei to take on the difficult and never ending task of rock removal on farmland. TerraClear is utilizing state of the art sensors, machine learning, GPS, and robotics to bring the world of software and technology to the very physical task of removing rocks from fields. This combination of digital and physical has the potential to have an incredible impact on one of the industries that has sometimes been slower to adopt technology but is more aggressively embracing innovation in recent years. And Brent is the guy to do this – he is a charismatic, serial entrepreneur who started two companies which grew to be public companies – Smartsheet and Onyx Software. He is also from a strong, multigenerational farming family in Idaho. Having backed Brent before from day one, we are excited to see the innovations and efficiencies that TerraClear will bring to market.

Mobile Fueling

For decades consumers and businesses had to go to the gas station to fill up their vehicle. But, that solution was inconvenient, time consuming and environmentally unfriendly. With the power of mobile phones, GPS and route optimization, a new group of companies that deliver fuel to your vehicle on demand have emerged. The early leader in this category is Booster Fuels. Booster’s Founder and CEO Frank Mycroft had the initial insight that the combination of the digital world and GPS technology with the economics of mobile fueling could eliminate this annoying chore and be a good business. He and his team have meticulously designed a mobile fuel delivery system that enables consumers to have their cars filled while they are at work. By delivering to corporate campuses they can efficiently fill over 12 cars per hour in a manner that is superior to the gas station, cost comparable and very safe. Regulators have learned that it is more environmentally friendly and safe and have become strongly supportive of Booster.

Booster also learned that their specially designed systems, vehicles and drivers could provide a superior service to commercial fleets. This extension of their business is allowing them to expand rapidly to more geographies and provide related services. Software, data, employee training, and vehicles with modern sensors all combine to make such a digital meets physical solution a success

Deep Learning at the Edge

Deep learning models are a fundamental breakthrough in how machines can be trained to recognize images for a broad variety of autonomous use cases. The challenge with image recognition models is that they generally require significant compute, memory and power resources to run the models. In order to unlock the power of these digital models to run and address real world problems at the edge, a solution was needed to build and compress the models and match them to the resources available. These use cases also protect privacy and reduce latency relative to models require cloud resources.

In our portfolio, XNOR.ai has broken through with their data model pipeline and “binarization” capabilities to enable clearly superior models that run at the edge on devices with limited if any connectivity. Ali Farhadi and Mohammad Ragestrani developed these techniques with their team at Paul Allen’s Institute for Artificial Intelligence in Seattle. These models can be run on a mobile phone to improve picture taking. They can be run on a security camera to distinguish between a vehicle, person or animal. They can be run in a store like Amazon Go or Bingo Box to enable autonomous shopping. And, they can be used on home appliances to identify specific food items. The applications are nearly limitless and will redefine how consumers interact with all kinds of physical world items. More fundamentally, they will be required as part of the “sensor fusion” that unlocks the full potential of autonomous vehicles. Companies like Xnor.ai are creating the building blocks for breakout services in the DiPhy realm.

Focusing on the Customer and their Problems

An important key to success in this new generation of digital meets physical world solutions is to be “customer pulled” rather than “technology pushed.” By understanding a customer’s need to remove rocks from farmland, fill their car up with fuel, or run image detection models at the edge successful companies are being built. Being enamored with location aware devices, deep learning models or even the blockchain does not lead directly to identifying and understanding a real-world problem and building a superior solution. In fact, though we didn’t talk about it here, we believe blockchain will play an important role in DiPhy. The real power of blockchain is likely using digital tokens to reduce friction with the ownership and utilization of assets in the physical world. But, that is a topic for a future post.

Our Investment in Kush Parikh and Player Tokens

I am pleased to announce Madrona’s seed investment in Player Tokens Inc. (PTI) and our partnership with Kush Parikh, the founder and CEO. Kush joined Madrona as an Entrepreneur in Residence (EIR) in late 2017 and explored several ideas with the Madrona team, including a nascent category called crypto-collectibles. Player Tokens is launching today.

There have been a number of interesting crypto-collectible projects … this Medium post by CryptoKitties, one of the pioneers of the space, does a nice job covering both the definition of crypto-collectibles and some of the earliest experiments. This post is another good 101.

As Kush and we explored the world of crypto-collectibles together, a few things really stood out. First, there is an opportunity to bring together the digital and physical worlds (something my partner Matt lovingly describes as DiPhy) to create an entirely new and compelling collectible experience, powered by blockchain. Second, this intersection of worlds is particularly powerful in professional sports, where fans have the opportunity to encounter and interact with their favorite athletes, at games, on television, and through social media. Third, the crypto-collectible experience as it exists is entirely too complicated for the typical pro sports fan and collector.

These observations and a compelling vision for ways that crypto-collectibles could be the entry point to a whole slew of digital and physical fan experiences is what prompted Kush to found Player Tokens at Madrona, and for us to begin this journey together. Step one on the journey … talking to fans and collectors. Having lived in epic sports towns like Seattle and Chicago, we’ve had no shortage of conversations with sports fans and collectors who are interested in modern ways to buy, sell, and trade, authentic, rare collectibles for their favorite players. Through Madrona’s partnership with the OneTeam Collective, we’ve also had the opportunity to connect with the players, associations, teams and leagues, all of whom are excited about the future of crypto-collectibles and the opportunities they will enable in the professional sports world.

A mix of product vision from Kush and team, and feedback from fans, collectors and athletes alike, have shaped the initial version of Player Tokens launching today, as well as the long-term roadmap for PTI. We are excited to be working with Evan Kaplan and team at the Major League Baseball Players Association, who represent the Major League players, as our first business partner in this journey; we look forward to building great things together for fans and professional athletes across the globe.

Special thanks to our friends Ahmad Nassar, Ricky Medina, Casey Schwab and team at NFL Players Inc. / OneTeam Collective, who have been great thought partners and connectors for PTI at this early stage in the life of the company and the category.