Player Tokens Inc. is betting that digital assets and blockchain technology will reshape the way sports fans buy and sell rare collectibles.
The Seattle startup came out of stealth mode in August, revealing its “crypto-collectible service” that puts a new spin on the traditional baseball card and owning collectibles.
The company, backed by Madrona Venture Group, last month signed a deal with the Major League Baseball Players Association to sell digital “tokens” featuring real MLB players. Packs of tokens, priced from $5.99 to $8.49, can be purchased with a credit card. Player Tokens said its product is the first crypto-collectible that doesn’t require a cryptocurrency wallet.
There are a finite number of tokens sold and each have unique IDs based on the Ethereum blockchain that confirms authenticity, which creates digital scarcity. Token owners will be able to use tokens in various ways, including in-stadium experiences and engagement with MLB players. The tokens are non-interchangeable and can’t be used as a digital currency, but can be transferred to other owners.
“We believe Player Tokens is taking a great step forward, modernizing the fan and collector experience while paying homage to the rich history of baseball collectibles,” Evan Kaplan, director of licensing and business development at MLBPA, said in a statement.
Crypto-collectibles are a relatively new phenomenon. One of the better-known examples of this is CryptoKitties, dgital cartoon cats that are bought and sold with Ethereum. The company raised $12 million earlier this year.
Player Tokens is led by CEO Kush Parikh, the former CEO of PayByPhone who was most recently an entrepreneur-in-residence at Madrona.
“Our goal is to create a modern platform that ultimately connects fans and players through digital,” he said.
Speaking at an event in Seattle last month, Boost VC Managing Director Adam Draper talked about his firm’s focus on investing in cryptocurrency. Draper, a big comic book collector and early investor in Coinbase, said blockchain tech enables digital scarcity.
“Digital scarcity, for the first time, is possible on the internet,” he said.
Scott Jacobson, managing director at Madrona, wrote a blog post about his firm’s investment in Player Tokens. From the post:
“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.”
We caught up with Parikh for this Startup Spotlight, a regular GeekWire feature. Continue reading for his answers to our questionnaire. You also also see the company’s FAQ page for more details.
Explain what you do so our parents can understand it: “New economy baseball cards for the modern age … across all sports! The collectibles we create will always change and continue to evolve over time — something that any static, tangible asset will never be able to do (except age).”
Inspiration hit us when: “We realized blockchain could be applied to something that people understand. More importantly, there is transparency (people know what they are buying and selling), scarcity (we only mint a finite amount of collectible tokens) and authenticity (no fraud). We are not a technology looking for a solution. We identified a market, and we are able to apply cutting-edge technology to create a platform that was not possible even one year ago.”
VC, Angel or Bootstrap: “We have kicked off with a seed round led by Madrona Venture Group. We are excited to have them as thought partners first and investors second. Their unique combination of experience and deep knowledge around technology, consumer, and marketplaces is second to none. The best way to explain the symbiosis is to get their perspective on Player Tokens here.”
Our ‘secret sauce’ is: “Making crypto understandable and easy to use for the common fan. There is no requirement to own cryptocurrency, or even understand it. All you need to know is that the player tokens you buy from us are yours and can not be faked. From there, you will be able to join the journey with us as the collecting and engagement experience evolves with players.”
The smartest move we’ve made so far: “Being fearless and moving fast. For sure this is early stage, but at the same time, getting a product to market where we can learn and iterate quickly is our biggest advantage. One piece of feedback we often get is that users/fans ‘think its cool’ they own a crypto collectible without having to worry about all the ‘blather’ they hear about in the news daily.”
The biggest thing we look for when hiring is: “Passion, versatility and a willingness to take risks. That is the base, then we evaluate competency across the functional areas for which we hire. A love of sports is helpful, but not required. It’s more important to have a desire to be part of building a great company.”
What’s the one piece of advice you’d give to other entrepreneurs just starting out: “Stay the course. The daily gyrations are not understandable to anyone except other founders. Seek them out as they will be the best peer group as you navigate uncharted waters.”