069 - Bitcoin Benefits: Scott Dedels on Revolutionizing Employee Compensation with Block Rewards

In this conversation, Scott Dedels, co-founder of Block Rewards, shares his journey from traditional compensation consulting to creating a Bitcoin-based employee benefits platform. He discusses the impact of Bitcoin on employee compensation, the mechanics of their Bitcoin Savings Plan, and the importance of education in facilitating Bitcoin adoption in the workplace. Scott also highlights the innovative fundraising strategies they are employing and offers advice for aspiring entrepreneurs in the Bitcoin space.

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⚡  Get personalized onboarding at River for Bitcoin-only financial services: https://partner.river.com/buildwithbitcoin
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Chapters
00:00 Introduction to Scott Dedels and Block Rewards
03:57 Scott's Bitcoin Journey and the Birth of Block Rewards
06:47 Understanding Block Rewards' Product Offerings
09:42 The Mechanics of Bitcoin Savings Plan
12:45 The Role of Education in Employee Engagement
15:40 Navigating Custodial and Non-Custodial Solutions
18:27 Customer Acquisition and Early Adoption Insights
24:32 Employee Participation and Engagement Metrics
35:04 Team Dynamics and Remote Work Structure
36:42 Navigating U.S. Expansion and Regulatory Challenges
41:15 The Future of Financial Freedom and Bitcoin's Role
49:31 Innovative Fundraising Approaches for Startups
57:09 Advice for Aspiring Bitcoin Entrepreneurs

References
https://blockrewards.ca/
https://lanternbitcoin.com/

https://www.buildwithbitcoin.xyz/
https://x.com/BuildwBitcoin
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❗ DISCLAIMER: This show is for entertainment purposes only. Before making any decisions consult a professional.

Transcript

Scott: 0:00

We can see the numbers on Bitcoin savings plan growing, and we're like, Hey guys, here is your company growing? You're hiring more. And like, no, actually, you know, like, as a result of water cooler talk, people are just asking to switch over to the Bitcoin plan and foregoing any of the tax deferrals. It's not they would just rather have the Bitcoin, which is exactly what we love to hear. Like it's so so it's been really cool, and I, and this is part of where I'm just so bullish on the idea, because the desirable thing, the thing that people will want, I believe, is Bitcoin, and it's just a matter of getting some exposure.

Israel: 0:41

What if your job could help you secure your financial future in a way you've never imagined? In this episode, Scott details co founder and CO CEO of block rewards, shares how he's pioneering a Bitcoin based employee benefits platform. Learn about their Bitcoin savings plan, how it's transforming compensation and Scott's advice for Bitcoin entrepreneurs, tune in and rethink work and wealth. As a reminder, this podcast is for educational purposes only. If you enjoy the content, please remember to subscribe, comment and share as This all helps us grow. Lynne and I are partners at base layer advisors, where we use our network of Venture Capital Partners and startup founders to connect investors with unique opportunities within the Bitcoin innovation space. Alongside this, we help startup founders with their growth and fundraising. Visit our website's advisory section to learn more. Welcome to build with Bitcoin. I'm co host. Irene Munoz joined with coho Lynne Bairstow, today, we welcome a Scott dedels, a co founder of block rewards, author and host of a podcast, Scott, first of all, welcome. We're very excited to get into today's

Scott: 1:48

conversation. Thank you so much for having me. It's my pleasure to be here, guys.

Israel: 1:51

Scott, you're focused at block rewards, the company you started a couple years back on compensation and benefits and how Bitcoin can integrate into that employer employee relationship. We want to get into all of the aspects of the business, of course, and why you decided to start it. But as a starting point, can we get some insight into who you are before block rewards and your Bitcoin journey?

Scott: 2:17

My my bitcoin origin story, had spent the majority of my career working in compensation rewards. When this all started for me in 2020 I had been in private consulting for doing a lot of work with pensions and total rewards, so I was deeply immersed in that world, working with small, medium sized businesses and even some national brands across the Canadian marketplace. And then 2020, happened. And in Canada, we, the Canadian government really went with a very strong interventionist money creation spending strategy to keep the country shut down. And I was, I was, I guess, for for that time in my industry, early to the party, starting to wonder about inflation and the effects of money printing, as we unroll these programs that we're going to pay employees to stay home and pay the businesses to stay closed and just keep things running. It was a really unprecedented time that caused me some pause, and I actually wasn't interested in Bitcoin. I started. I didn't come from a background of economics or finance. I was a history student in university, so I did know something about the history of money and and global events, but, but I needed some background, so I started ordering books from Amazon, you know, university economics textbooks. And eventually I was suggested the price of tomorrow, which isn't actually explicitly a Bitcoin book. So I wasn't, I wasn't ever looking for Bitcoin. I read that book, and then I immediately read it again, and that was like a massive right turn for me, right in the middle of lockdown, and which up here lasted for months. And at that point, then I started just going deep down the rabbit hole, like any bitcoin book I could get my hands on, knutswon home, the Genesis book, the block size wars, like I just couldn't believe, you know, how much there was, how much meat on the bone there was with the subject. And, you know, I think, like with a lot of people who really have that zero to one moment with Bitcoin, you then sort of immediately relate it to what you know the most about in your own life. So, you know, doctors get interested in how Bitcoin fixes medicine. And for me, I immediately started, you know, this journey started for me because I was worried about what money printing was going to do to fixed income markets and the 6040, portfolio and the target date funds that we were selling to a lot of our employers that were trying to just position their employees to plan for the future with certainty. And, you know, I think, like a lot of ideas that mature over time as you understand them better, my initial reaction was, oh, like, there's got to be an. Opportunity here to create some kind of a product for employers that's Bitcoin backed, that might be some kind of pension insurance, so that we may be able to, you know, protect a downside risk against some kind of like bond market collapse. You know, like I said, it took me a long time to understand it better, and I as I as I've gone deeper and deeper down the rabbit hole. My opinions have evolved a lot, and today I really feel like Bitcoin is a form of money that that sort of recombines and the separation of medium of exchange and store of value that really happened as gold and the relationship to paper money was severed. So there are an unlimited number of potential applications for Bitcoin in the employment relationship, and it's much, much more vast than simply thinking about ensuring a pension fund. So to move the story forward, I was, like a lot of people. Then I had a hard time existing in my old world, and I just really wanted to get involved in this space. I sold my my pension clients, and sort of started trying to figure out what was next. And I got connected to Adam O'Brien, who's CEO at Canadian publicly traded Bitcoin company called Bitcoin well. And they were running a sort of very rudimentary version of what is bitcoin Savings Plan, which is, which is our first launch product. Adam had the same idea. You know, there, there is a a lot of opportunity, and not a lot of great tools for paying people in Bitcoin or helping employees save in Bitcoin. So that they had, they had built something, and they were running it for a few customers who had come to them asking for a solution like this, Bitcoin, well, is more of a bitcoin exchange and an ATM company. So it was pretty outside the scope of their, you know, of their business, and I came on, you know, it seemed like a match made in heaven. I had this background in understanding how employers think about these kinds of products and how they make decisions around how they allocate budgets and roll them out to their employee populations. And then the FTX crash happened, and no companies wanted to talk about Bitcoin to their employees. So after a few months of really slugging it out, Adam decided that they were going to mothball that product and and so we had a conversation about it. And I had felt, you know, for some time, that what was really required for this thing to be successful was a company that lives only in the world of the mind of the employer, building products for the employer and prepared to service them in the way that employers would be would be expecting of similar products that they would find in payroll or HR or, you know, group savings. And so that was then the next iteration. I kind of bought the IP from block rewards and incorporated the company and got started trying to figure out what was next. I, you know, I'd been self employed in the consulting space. So I'd built a practice, but I hadn't built a business, and they're very different, you know, it's like I so I had this deep industry understanding, and I felt like I was starting to really, you know, comprehend Bitcoin much better. And then I had this really serendipitous interaction with a friend of a friend, of a friend who then became my co founder, Josh curlett. And Josh had is a many times founder, who had had an exit with an oilfield services company that had grown over 100 million market cap, and his covid moment was moving back to the town that his wife grew up in, which is where I live, and so we got connected having coffees. He didn't know anything about Bitcoin, and I didn't really understand much about his background, and the two of us just kind of came together. I orange pilled him accidentally, and all of a sudden he's talking about Bitcoin, as it happens, and he was learning about what was, you know, what was then like, the super early days of block rewards and an offer to come on and bring in his expertise and and see what we could really make this thing together. And so, you know, the two of us together has been really a it's a match made in heaven because of the experience and expertise that he brings to the table, has created us for an opportunity to build this in a way where we have a management team that's actually done it, you know, like scaling a business to that size. You know, there's there's learnings that you just can't know what you. If you don't, if you haven't done it, you don't know, but you don't know. And so, so we have someone at the helm who has really done it more than once and done it to a very spectacular fashion. Yeah. So it's been a ride, and we, Josh came on, and we started expanding the team, raising capital. We conducted a seed round over the over the back half of last year and and here we are now. It was three weeks ago, first week of July, that we launched the enterprise version of Bitcoin savings plan, after after all of that, and so exciting days for the company.

Lynne Bairstow: 10:40

Yeah, and I'd like to drill down a little bit more about what exactly block rewards offers to clients and what the size of your client is. Typically, you'd mention that, as opposed to Bitcoin, well, you really needed a product that speaks to these larger companies and how they deal with employee compensation. And I do understand that how, how is your, how does your How does your product work? I mean, are you integrated into the compensation system of the actual employer, or do you act as a middleman that they funnel some of the compensation to you? Or maybe you could just describe a little bit about what the what the services are that you offer.

Scott: 11:20

Yeah, for sure, the the product that we have live today, called Bitcoin savings plan, is is an enterprise grade software that enables employees to convert some of their net pay into bitcoin through a payroll deduction, and allows an employer to give employees Bitcoin, either as a perk or reward, or to create some kind of a matching program that might mirror an existing savings plan that they're already offering, or just something that they want to roll out to be different. And I think, you know, just to, just to kind of stop there for a second, you know, there's, there's so much opportunity for Bitcoin to just be the most exciting thing an employer could offer in the workplace. And that was kind of like after I shifted from the idea that Bitcoin was going to be pension insurance to the idea that it's the most desirable form of money that's ever existed. I mean, that's essentially rocket fuel, if you're thinking about a tool for recruitment and retention, for companies that are early to understand how it could benefit the things a company spent so much time and energy trying to pinpoint where they should spend and allocate these this money to have a maximum impact. And, you know, great companies care a lot about their staff, and that's why these things happen, right? It's like they want to create the feeling that their employees know that, so that they are able to keep those great people and find new ones out of the hiring market. And so there's just so much natural alignment with Bitcoin. Like bitcoin is the most important thing an employer can understand, and it is an absolute game changer for companies that have figured out this earlier. You know, like we're in this very early stage of companies starting to understand why it would be beneficial for them to own Bitcoin as a corporate asset. And like, I just can't imagine that it's going to be that much longer for those companies to understand that if it's beneficial for the company to be saving some bitcoin, that it probably makes sense for their key people, or all of their people, to be doing the same. So, you know, we're in that gradually and then suddenly moment, maybe, back to the So, back to your question. The product works today, and it's, it's a it's a platform, a web based platform, sort of bank upgrade security, that is its own experience. But we intend, over time, for this thing to talk to all of the HR and Payroll softwares that all of the that anybody would need to use, so that the experience can be accessed in a number of different ways. Bitcoin savings plan looks like the kinds of softwares that the administrators of HR and Payroll are used to seeing, and the employee experience on the other side looks like the kind of tools that employees are used to seeing when they are in a group savings plan or a group benefit website. You know, we're laying out the information that way, and what we've really tried to do is solve the problem of making this thing accessible and feeling safe for for an employee of any knowledge or level of comfort, I think that for people who want to find a way to buy bitcoin, you know, in North America, there's lots of ways to do that. The. But that's kind of like two or 5% of the population. You know that it's really not, and I don't think it's anywhere near as high as the numbers as are suggested where you see even, like, I think there was a stat in Canada say that one in seven people own some bitcoin. And I can guarantee that in my personal life traveling, if I were to ask everybody, I know there's no way that one out of seven would say they have a wallet. So we wanted to build something that a company with 10,000 or 50,000 employees could roll out to their employee population, who most of them don't know anything about how to do this, and they could participate feeling like it's safe because their employer is putting it forward for them, and it's creating for them something that is different, and other employers aren't doing, and this is sort of a North Star for us. And so, you know, I think that going back to Bitcoin, well, the original product that we were running, and what we have been running with, with live customers since the company was incepted, was a non custodial version that sort of works. You know, there's, I think, the way that most of these work. And the challenge there is, what for us, again, is, how does this thing work in a way that could be rolled out in mass to a company of five employees, or 50 employees, or 5000 employees, assuming that only a small handful of them would really know what to do if they had to do everything themselves. So what we have built now that's live, is an onboarding and enrollment stream that also really works the way a large employer would would expect for any other product that like this, that they were trying to have their employees participating in mass and so we can absolutely accept a massive onboarding and create an experience where administrators understand how many of their employees are at different stages of enrollment. We have different analytics around the dashboards to help companies think about the the Go Live process. And one place that we're going that is going to be really different and exciting is, is education. And I think that another problem to solve for for employers, is is supporting them along the journey. And this is how I was thinking about why a company needs to be committed to living and breathing in this space, is that it can be hard for companies to think about rolling out traditional financial products to their employee populations that people have some basic understanding of. And this is really what I've been doing for most of my career, and knowing that thinking about the lift involved in getting people comfortable with the idea of converting some of their paycheck or receiving some of their employer rewards in Bitcoin is is a big challenge in front of us, and to make that happen, this is where We got connected to Seb bunny, who is also on our team. And Seb is, in my opinion, one of the world's leading Bitcoin educators. We got connected to Seb because he had built a website called Looking Glass education with Daz Bay and the help of Greg Foss and some others, James lavish, and looking glass was something we're just very interested in the notion of, like, you know, could, could Looking Glass exist inside block rewards. Like, how are we? You know, we want to be able to tell companies that are coming on board with us that we're going to be able to help them successfully bring their employee population along for the ride. And so that's something that we are near to launch now. And I think that when, when that happens, Sebs overseeing the design of some really cool interactive educational material where employees are going to be able to do more than just interact with Bitcoin and employers are going to be able to understand how many of their employees are engaging and to what degree, and can there be different incentives associated with people learning about Bitcoin and and so it's, it's, you know, maybe to put a bow on that idea, the tool today, from a How Does It Work standpoint, is pretty simple. You know, we we take information from employers about what the deductions are, and we take an ACH, or a pre authorized withdrawal, is what they're called in Canada, and we convert that money into Bitcoin, and we deliver it to Bitcoin wallets for the employees on payday, and then, you know, but it's, but it's much bigger than that, because what we're really doing is creating the first tool that we think will be acceptable for companies to think about doing this in a way that feels supported and friendly and able to really meet their needs. Buildus,

Israel: 19:57

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Lynne Bairstow: 20:18

with Bitcoin so you don't you act a little bit as the exchange. You're actually handling the purchase of the Bitcoin and the allocation into the different wallets, but on a non custodial basis. So can you explain a little bit about that, or are there regulations involved with it? So does the company hold the Bitcoin on behalf of the other wallets for the employees.

Scott: 20:43

So the product is custodial now, and we've just launched the custodial version of the product. And this is kind of maybe to come back to that story. This is a big learning of ours trying to sell the non custodial version of the product. Was operationally in talking to leaders at companies of different sizes. This is just continually the thing that came up, and we'd love to be the hardcore sovereignty company. And we just sort of learned that that's that's not going to be our role in in accomplishing this mission, our product needs to be easy to use and and safe and reliable. And so we partnered with Canadian qualified custodian for our Canadian operations. That is balance. Balance is a they custody some bitcoin ETF bitcoins in in Canadian Bitcoin ETFs, and among other things. So they've been a great partner for us. The wallets exist inside block rewards, and they've developed a really cool method for determining the ownership of the assets. And so even though it's custodial, the title of the assets is is always held by the member and and so this is a model that we will replicate as we scale into different jurisdictions, where we'll just swap the back end partners out. You mentioned, yeah. So we have a liquidity providers where we source our Bitcoin from and and so block words is really a front end platform that enables this to happen, and we intend to scale it into every country in the world as we as we grow, so I think there's a market for everybody to have access to this, depending on where they are, and the next market is the US, which we hope to be in later this year. This

Lynne Bairstow: 22:35

is really exciting. I mean, I love this because I think it reaches a whole different Bitcoin potential user. And to your point, it's like a lot of people, one of the biggest confusions is, where do I buy it? How do I buy it? And you do hear the stories of the FTX is, but then it's like, well, what's the best way to buy but when you're already involved with a large corporation, or you have a relationship with your company, and your company is saying, this is okay, and you can hold it through us or through your thing. I think that that just opens the door and makes it easier. I just think the user experience tools that are being built right now are really helping the adoption. So I love, I love what you're doing in that regard. Thank

Scott: 23:13

you. Yeah, we had, we had a really cool maybe, if I could just tell a very quick story, something that happened along the way, it's the people you meet, right? And so we were Josh and I had gone to Madeira for Atlantis last spring. Was amazing, amazing event. And while we were there, we met someone who ended up coming on as an investor. It took some time to make his decision about participating in our seed round. And while those conversations were going on, he started having a friend join those meetings. And we actually we were getting excited. We thought we were getting two investors for the price of one. This guy had great questions. He really seemed to understand payroll and HR software and and it turned out that he was a career sort of a very high level person in the payroll and HR tech space, and he was managing, he was then managing the HR tech stack for one of Canada's largest clothing retailers. And we got to the end of these meetings, and he started asking us more pointed questions about how well we understood how the biggest companies in the world make decisions about purchasing software in the HR and Payroll tech space, and what requirements we would need so that our software could be successfully ingested by those companies. And we had to pause because we didn't really have an answer for that question. And the answer turned out that he wanted to leave his role and join us to you know, he was so convinced by the vision and realized that this was really a key piece that we had missed. And so Jay Sexton became our Chief Product Officer last summer, and this is sort of the part of the block reward story and the secret sauce, I think, that is. Is really exciting for investors is, you know, in addition to kind of having, having Josh as the CO CEO, who has already built a business to a very large scale, we have this very unique person who there, there aren't tons of people floating around like him that understand the HR pay tech space like Jay does. And so everything that is being built now inside is, you know, he's transplanted that knowledge into our organization. Sounds

Israel: 25:27

like it did work out to be two for one in that, that meeting, maybe not in the way you you initially thought, but you guys have built a, an outstanding team. I mean, so important, what you guys are working on? Scott, you know, I have a question, a little bit bit more on the customer acquisition side, and really kind of a curiosity of who these who are the early adopters of this type of product. I mean, what's the mix between both Bitcoin and not non Bitcoin companies? Are the executive teams already personally allocating to Bitcoin and see the importance, or are you educating as part of that? Yeah. I mean, can you give us a little insight into what's the thought process for the customers who you're engaging with?

Scott: 26:15

Yeah, thank you for that question. The easiest sales, for sure, are ones where an owner or a key executive is a bitcoiner, and we, you know, we actually have different entirely different sales processes depending on the the level of understanding of in Bitcoin. So when it when it's when it's someone who understands Bitcoin, we basically just have to show them the software tool and and that's it. And then it's more of a question, a conversation around, okay, so what is, what is rollout look like, and operationally, how should we think about talking to our staff about this, and how are you guys going to support it? So predominantly, our active customers today are scenarios like that, where they, there's a lot of conviction behind the leadership group and many of their staff. Don't even know why they're doing it, but they're doing it and they just, it's worked out. Obviously, it's like our largest customer has been doing this going back to day one of block rewards. So that, you know, I don't know what the bitcoin price was at that time, maybe like 30,000 Canadian and so there they have employees that might have saved $10,000 in that time. And today, the Fiat value of it is like 50 or 60. And there just isn't something else that could have done that. I mean, they could have had Bitcoin denominated Fiat products that were registered, but nobody would do it. This is part of the issue. I think that, like, yeah, you can get a Bitcoin ETF inside your registered vehicle, but nobody is going to put 100% of their allocated capital into it, into that fund. And if they did, they would be the bitcoiner Who's already buying Bitcoin anyways. So what our product does is really mass expose an employee population to the power of Bitcoins, really unprecedented, compounding annual growth rate. You don't have to wait that long, like if you were planning to stay with your employer anyways. And for those you know, we have some crazy success stories now, because, like that one, where those employees will never leave that employer, because it has actually, literally been a life changing financial decision that took a lot of conviction on the part of the leadership to make and and so, yeah, so we're, we're really, you know, starting, I would say, early, trying to connect to As many of those as possible, for the people who understand it and want to experience the same thing inside their company. And I think another part of what block rewards is is we're the company that can help you successfully do this with your staff. And this is something that is also, I think, as far as I know, we're the only company in the world that's really thinking about it in this way. So, yeah, if you're listening and you're a this sounds like you. We'd love to

Lynne Bairstow: 29:10

talk. I have to ask this question, Scott. I mean, we're talking in July of 2025, which is kind of Bitcoin Treasury summer for a lot of companies. Since you're already inside of these organizations, do you have any ability for the company itself to allocate a part of their profits or revenues into Bitcoin and or is that something that you're thinking about? It just feels that the executives would be looking at their employees wealth building, but thinking we should maybe think about implementing a treasury of

Scott: 29:38

our own? Absolutely, we are just it's a tiny adaptation for how Bitcoin savings plan works for employees. And we will have a custodial multi SIG option that is available to the company in the next very short while. And I completely agree, you know, so it'll work through the same process. And you. Yeah, I think there's different ways to do this. And this is a space where there's, there's lots of attention right now, you know, multi SIG, LD, institution, you know, convert to your point of sale terminals, lots of cool ideas. So, yeah, but we will, we'll have an option for companies that want to do this in a very

Israel: 30:17

simple way. What are the early stats? If you can share any, as far as you know, I don't know employee participation or engagement with this for the companies that are, perhaps not Bitcoin companies, but are offering this, you know, in the more traditional, you know, traditional world, let's say, I mean, how much, how much engagement are they getting from their employees?

Scott: 30:38

Great question. Participation just has a ton to do with sort of two factors. One, you know, if they were legacy customers in the non custodial version, it's the size of the company. So smaller companies, we were able to really get involved and do some live sessions and get people set up with wallets so that we could get a higher participation rate and and I think that we've now that we've addressed that, we're going to see that really transition. But the more important stat is whether or not the employer is financially participating in the arrangement. So one way to have a Bitcoin savings plan is just to offer your staff the ability to convert some of their own net pay, which is still, which is still a benefit. Like people doing this, the employer is bearing the cost of the transactions. So, like, if they buy $100 they're getting $100 a Bitcoin, which is, you know, for people who understand like this, is not nothing. And in the Canadian market, like a product like that, it's, I've never seen anything like it, so I actually don't know what's normal, but our participation rate on those companies is almost 100 because people are, you know, there's no reason to not participate. And we have companies where there's an expectation of an employee contribution to get your match. And I would say the participation in those is around 60 or 70% which is really high for, you know, even in non mandatory pensions, you know, when, when there's free Fiat on the table, you won't get 100% participation often, because a lot of people would just rather spend the money today. So it's a it's a tricky problem to solve. We do have customers that offer a traditional registered plan, and then they offer exactly the same plan side by side, if they just want to take this, like, the matching and limits and let their employees choose. And like, it's been some really interesting studies, because we have a couple that are big fans of what we're doing, and so they share information with us freely. We can see the numbers on Bitcoin savings plan growing, and we're like, Hey guys, is your company growing? You're hiring more? Like, no, actually, you know, like, as a result of water cooler talk, people are just asking to switch over to the Bitcoin plan and foregoing any of the tax deferrals, like, it's not. They would just rather have the Bitcoin, which is exactly what we love to hear, like it's so it's been really cool, and I, and this is part of where I am, just so bullish on the idea, because the desirable thing, the thing that people will want, I believe, is Bitcoin, and it's just a matter of getting some exposure. And while it doesn't even need to happen to everyone in the company, because people talk, and they talk to each other, and everybody will know. I mean, I think it's getting to a place now where the price of Bitcoin is getting talked about daily on it doesn't matter what news channel you watch. So people do understand that there's something happening. They're probably not watching it close enough, but it's becoming, you know, in just like it's part of the zeitgeist of, you know, cultural norms in the middle of the 2020s and so this is part of why I think this is kind of like a right place at the right time thing I know that, actually, I learned in Vegas that night we met, that this idea, or an idea very similar to it, was pitched to Brian Armstrong in 2017 and kind of at that time, it was just impossible to know, like, how far away are we from this being something that big companies are going to seriously think about. And I guess you could say that in 2025 we still don't know, but it definitely feels a lot more a lot more real. And that is probably one of the most common questions we get from curious investors that are trying to understand our potential for success. Is like, how far? Okay, you know. So we have this, you know, we have something here. How long until it becomes a normal thing that companies think about Bitcoin in their compensation and reward stack? I think it's like objects in the rearview mirror closer than they appear.

Lynne Bairstow: 34:55

Yeah, I agree. I just think you've seen so much pile on in in companies to. To adopt it, and it's been a pub led movement up until now and so. And I love that that I just started thinking about the water cool comment that you made, because you could see it on the news all the time, but it's not going to mean anything to you. But if you see Jack next door, you know that chatting, having a coffee together at work, and he talks about the impressive appreciation he's experienced. And it's like, I got to take another look at this plan. It's like we both have the same opportunity right in front of us, and we're coworkers that you know you don't want to get left behind. And that's a powerful testament. So I love that, Scott, what about let's shift a little bit and just talk about your own team and your own company and how that looks. How does that operate? Are you remote, or are you all based in the same location in Canada? How are you I know you really talked about some incredible team members that you've added on since you started your journey. But what does your company look like? Yeah, we are

Scott: 35:59

headquartered in Kelowna, British Columbia, Canada, which is where I've been living for the last long while. And there's five of us that work out of the office here, and then everyone else is remote. So our our CTO is in San Francisco, and he's hired a dev team that works predominantly out of the Ukraine, which is kind of what he's done, and different projects. And so we've got a really strong dev team, and then we've got a few people in Vancouver. Our director of marketing is Roger Huang, who wrote wood malho Bitcoin and came he's been with Bitcoin magazine, Roger as it's really another sort of, as luck would have it. I had known Roger for some time, and he was a guest on the podcast. And it turns out that Rogers, you know, sort of by day world, is that he's like a SaaS growth hacker, marketer. And so we, we've all, you know, we've had a number of these really lucky. Our entire team is Bitcoiners, and our CFO Travis McDonald hosts a Bitcoin for accounting Twitter space every Saturday. And so that's that's really exciting. Travis is here with us in Kelowna. We've got a few people in in Ontario, and that might be everybody, I think we were around 15 right

Lynne Bairstow: 37:24

now, and you mentioned expanding into the US. How will that change the makeup of your team, or will you, will you need some regulatory adjustments or tweaks to your offering in order to expand into this market?

Scott: 37:37

That reminds me, actually, starting today, our our director of sales is based in Austin, and so we're really excited about that. Our first US employee. There are some things that are different, you know, we're learning a lot about the regulatory space, and that's the reason why we're not in the US already. For the most part, it's pretty similar. I mentioned the you know, I think the biggest hurdle for us has been selecting the back end partners that are going to are going to work for us in the US market. That it's true in Canada, and it's true in the US we solve for companies an important reporting problem by turning their Fiat into Bitcoin as a middleman, so that, because the you know, when an employer is going to pay their own staff out of their own Bitcoin, this is something that becomes all of a sudden, kind of very complex and onerous. And I think this is a lot of the reason why we haven't seen companies really do this at scale so far. And so this is one example of something that that our service solves and and it'll work essentially the same way in in the US and

Israel: 38:50

on the business model side of things. Scott, I mean, how are you guys actually monetizing what's, yeah, what's your thought process there? And is that going to change going forward as you scale?

Scott: 39:00

We're, you know, we're a Bitcoin company, but we are a SaaS company. So I think we're also the first Bitcoin SaaS product, which is really cool, because, you know, SaaS products are easy to value, and we have really sound recurring revenue model that is based on a per employee per month seat fee, essentially. And you know, as part of that they're getting, you know, they're, they're not just getting the Bitcoin transactions, but they're getting this educational content that we're creating with Seb and and a bunch of other things that will be, you know, sort of rolled out as the platform matures. But yeah, it's, it's this, predominantly, this per employee per month fee that actually looks the same way the other products companies would be using now for their different employee rewards. Would would like,

Israel: 39:48

what should I mean? I think poises you guys for so much success, because from everything you've explained so far, you're you're from a kind of front end and experience perspective. Of doing everything that looks and feels familiar to to any of these other, you know, HR and benefits providers, but you're just simply plugging in a better savings technology, right?

Scott: 40:14

That's exactly it, you know. And even the, even the branding, you know, we, we had some decisions to make early on about, you know, what does it feel like? What is the experience? And ultimately, we landed on, you know, I'm a kid. I was born in 1980 you know, my, my, I'm the youngest one. So my siblings were kids of the 70s. You know, we were watching Barbarella and Star Wars and and, you know, I learned early on in my bitcoin journey, this concept that when money worked better, life was simpler. And, you know, I think there's technology has changed a lot of the way things are, but fundamentally, the way money works has drastically changed during the time I've been alive. And it is a is a directly attributable to the way we think about being present with each other and spending our time and planning for the future. And so this idea that, you know, we wanted to have an experience for people, that instead of, you know, feeling maybe future forward, or, you know, like this is some technology product for the world of tomorrow, that this is actually something that should remind you of the way that things used to be. It should feel familiar and and so that's kind of like an explanation of if you go to our website, you know, you see the same things that you see in the studio here, and we have some really cool, creative ads that you'll see over the coming months that are evocative of the kind of, you know, Smokey the Bear summer camp poster you know, thinking about, you know, these pastel images of a wilderness landscape and a Volkswagen van, and just being able to go out and live your life because you've solved the most important problem, which is, how do you protect your hard earned money from the ravages of inflation? There's

Lynne Bairstow: 42:10

a lot of conversation about how things have shifted now to where people, in addition to having their regular job, feel like they've got to become financial or stock market experts and and you're right, it just takes so much time and energy that just distracts from living life and being with family, and, you know, in many cases, having multiple jobs in addition to trying to sort out your finances. So it would be a beautiful future to be thinking about. You know how to how life can improve once you have that problem of, you know, concern about your future finances resolved and and just by giving the opportunity for more people to have that which you makes me want to turn the conversation a little bit. Scott, to your book that you recently published. I know you, you've authored, you've been the author of two books, one directly related to financial professionals. That was your first book, which is the world that you came from. But your most recent book is the dow of Bitcoin, which I'm I'm a fan of the book, which really talks about it from your branding perspective, for black rewards. This, this, this new life that you can have, or an improved life that you can have when you have the financial concern eliminated or taken away or just resolved, and you feel more comfortable, and how that changes you as an individual. Can you? Can you talk a little bit about your perspective on this, which I find fascinating, and and how you view Bitcoin can help change, change and improve society.

Scott: 43:44

Yeah, for sure. And thanks for that question. And thank you again for reading the book. I'm flattered. You know this idea of, let me start here people used to just save like this actually predates how we're thinking about all of these different products and things we've been talking about in the conversation. You know, it's not normal, or it's not what, what it would have been for people to have 100% of the money that they have invested in the stock market. Like the stock market is gambling, and you're gambling on management teams and and sectors and, you know, going back, most people didn't have access to investing, like, it depends on how far we're going back. But you know, our grandparents, like you could actually just saving was a strategy, and then, you know, what we sort of had to do was like the s, p5, 100 became a savings vehicle because it's the only thing that really mirrors the rate of currency debasement. And we've we basically fused saving and gambling and into a new thing, and that's what we do now. And this is one of those things that I think has as a secondary effect created this problem of. Of life becoming a lot more complicated now we gamble on everything. You know, we turned, you know, we're all hoteliers. We're all turning our cars into taxis, like, it's just like, it's like a really crazy abstraction of not being able to save and, you know, I started conceptualizing some of the ideas that became the book. They were still rooted in what I've learned about money and investing throughout the course of my career, working with employers, and this idea that, like you know, we're transforming when we when we're employed, we're transforming our energy and time into a financial tool, so that hopefully in the future, when we want to consume that energy and time we've stored it like that's that's what the goal really is, right? And so the better we can do that, hopefully the less time and energy we have to put in as an input so that we can have it on the other side. And the money form that we use today is just a bad battery. It doesn't effectively store time or energy, and so we continually need to convert it back into something else faster and faster, like we we have to spend it because we can't store it. And that also then creates all these other secondary effect problems. And one of those problems is distracted us. It creates a less time for everybody. And I feel like this idea another way to think about this idea of like, life was simpler when money worked better was we really were spending more of our time in the present moment then, you know, like people, and these are, it's not only a money thing, because, for example, like, you know, people used to only get news maybe once a day in the 80s, and now you get news as often as you want. It 80 times a day. So, but, but I do think that when, because money is such a pervasive source of anxiety, it is the, probably the single greatest thing that can, you know, force you to have a, you know, regrets about the past or paralyzing anxiety be at the about the future, and prevent you from just enjoying the moments that you have right in front of you, which is, really, I actually believe that most people don't really desire to be incredibly wealthy. What they want is the ability to feel like they have autonomy and the ability to protect their time that they have to spend so that they can live life in a way that they want, which is, you know, like for most people, it's with the people they love and doing the things that they enjoy, the things that give them the most fulfillment and and this is the thing that I think saving hard money can really do, because when you understand that, you actually are also removing yourself from the gambling and, and so it's a much simpler thing when you can move to that level of comfort, and if you've exited the gambling and the erosion of the entropy of money. With that comes a genuine peace of mind. Like, we're we're we're reintroducing the concept of saving into the lexicon of financial thinking. Like, I think it's people should think about Bitcoin as as a wealth preservation tool. It's a savings tool. It's the apex tool for saving. And if you want to gamble, that's great. There's lots of other ways to gamble some of your wealth. But I actually also believe that given the choice, most people wouldn't gamble their money if they didn't think they had to, because most people are pretty risk averse. Like this is another thing I've learned in 20 years of helping people try to make decisions about this stuff, and so definitely nobody would have, you know, if you told people in the 90s that the average person today would have 100% of their investable portfolio in the stock market, 100% of the time like that would seem crazy, and today it's totally normal. I

Israel: 48:59

I fully agree with with you, Scott, I think most people ultimately as a starting point, at least look for stability, right? I mean, just that, that strong foundation goes such a long ways. And to your point, I mean, people have been forced to to look for alternatives. I mean, because there's no other option. I mean, even in developed countries, you know, even for the US market to use as an example, and the US dollar, I mean, people just by default, know, okay, I can't have my money just sitting in the bank, because it's gonna erode away, right? So, like, it's completely forced society into this, you know, kind of other alternative wild, wild west of investing and gambling and yeah, the the effects of all that are are very deep. We'll of course have some links to the to the books and the other material in the show notes, but maybe going back to, I know we're getting close to wrapping up here, Scott, but I do. Want to make sure we touch a little bit on on your journey as an entrepreneur with with block rewards and building the company you've had to fundraise, and we were speaking offline a little bit to your to your new approach to the next round that you're fundraising could use speak a little bit to how as a startup, you've approached fundraising and what that next step looks like for you guys.

Scott: 50:25

Yeah, as a first timer for me, I would, you know, I'm happy to share it. I think it's probably the most stressful part of it. And, you know, it's, it's a thrilling time to be involved in helping build the Bitcoin world of tomorrow. And it's also, you know, with it comes some challenges we have to convince investors, many of them that you know about the bigger idea that might not be as obvious for people who are who aren't as close to it, and for the people who do understand Bitcoin. You know there are other challenges, like Treasury stocks or just owning Bitcoin, you know, like, why would I invest in this instead of just owning Bitcoin? Is a really, you know, is, it can be a tricky question to answer. And so, yeah, fun fundraising is been, I mean, we we close our seed round, I don't want to say easily, but fairly quickly last year, and we've engaged in now what we hope to be our sort of our final round of funding to break even, and it's a larger number so But I'm optimistic, because the story has gotten a lot better And our business model has become a lot more mature and and we're doing something a little bit different to answer your question. And we we didn't want to, we wanted to offer something that sort of addressed the questions that we've received throughout the course of the seed round, and create an instrument that maybe had some appetite for a broader range of potential investors and and and VC groups, and we think this could become a very useful approach for early stage Bitcoin companies in the future. And we were excited to share it like, you know, on the backside, but we're selling Bitcoin secured convertible debentures. And so they're they're three year they're three year notes that mature at a predetermined share price today. And so we didn't want to haggle about what we think the company's worth right now, which is kind of where some of these investment conversations can get really sticky, and we think that our numbers, our forecasts, are very reasonable, and we're excited about having conversion conversations with our debenture investors in three years, where we think that the predetermined share prices will Be seem very attractive, and so. So the Bitcoin security we use with part of the investment proceeds and the it really offers three things. One is, it's insurance against things going catastrophically wrong, which we obviously hope don't happen. But, you know, I think investors always kind of want to understand, you know, what's my ultimate downside risk here, and how are you guys thinking about how that could be mitigated early stage companies? You know, there's a reason why not everybody turns into a unicorn, and often it's money. The second is that, as I mentioned, the debentures are three year term. So at the end of three years, we need to expect that some, we hope everyone, will convert to shares, some investors may choose not to. And so how would you guarantee that you would have the liquidity to pay out an investor that decided not to convert? And in this case, the facility also creates that because the theoretical or assumed appreciation of the Bitcoin price during that time, how we we use the we use the arc base case as our model. We use, we use a bunch of models to come up with how we're forecasting this. But you know, it looks like at the end of three years, we should have 100% coverage. Depending on assuming it'll be non linear, and we'll see exactly when. But that's the general idea and and the third piece is that, assuming the investors do convert to shares, then the Bitcoin converts to become our treasury, and so it's simultaneously creating a benefit to those investors, as they're now seeding our corporate treasury and fortifying the long term financial health of the company. And so it's a win win win scenario. We have a lot of really great feedback. Yeah, it looks different, you know, it's, it's, it's an unorthodox way to approach this problem, you know, and, and really, like, like I said, we have thought a lot about, how do we solve this problem? Because the different types of people who look at investing in a company like block rewards, and we've we've fielded all kinds of different questions, and we really wanted to be innovative and leverage the power of Bitcoin in a way that could create something different, that would sort of limit the downside risk and really create some exciting upside. So I think we've done that again, and that's full credit to Josh. Josh has raised money, a lot of money, with a number of different enterprises. He's been involved with and and he was the, he's the architect behind how all

Lynne Bairstow: 55:49

that worked. I'm fascinated by this, and I'm really excited. I mean, one of the things that Israel and I have found on this podcast journey of ours is just how Bitcoin founders think differently, and they they think differently about the growth of their company. I think the investments they made it make in almost every aspect of it, they think more carefully, because the trade off is Bitcoin, but then even on the funding rounds, I think a lot of the Bitcoin company founders really have in mind to have a long term operating company that generates Bitcoin returns rather than a cash out through an IPO or a sale to another company and and so, you know, the investor side, you know, thinks differently about it, but I love this idea because it does also address the problem of, you know, investors sometimes don't want to make a longer term commitment. So by having a three year window, it gives the option of liquidity at that time. The Bitcoin appreciation story is great. And just like Michael Saylor has really remade thinking about issuing public equity, I think private companies and startups. This is the first example that I've heard so clearly where you're really re engineering startup financing. And so congratulations on that. And I think Israel and I are going to want to dive deeper into this model and how you're doing it, but it just opens your mind up to what is possible when you have Bitcoin as a foundational financial instrument, to how you think about funding and growth and acceleration, even repaying back your early investors to allow for the company to continue to

Scott: 57:22

grow. Yeah, thanks. We're excited about it. And yeah, and again, for your listeners, if anyone wants to, wants to see it more closely, we'd be happy to chat with with anyone who does

Lynne Bairstow: 57:33

understanding qualified investor regulations. And Scott, what would be I mean, when you're thinking about your journey going from traditional business into being a founder of a Bitcoin company, what would you advise other either people are looking at joining a Bitcoin startup or company or founding one themselves, what advice would you give them? What do you think is kind of misunderstood about the difference in the Bitcoin ecosystem versus a traditional tech or startup ecosystem.

Scott: 58:05

Maybe three things come to mind. One would be personally, I believe that we are entering into this is the Jesse Myers visualization of Bitcoin becoming the foundational layer of ownership in the digital age. I think that we are living through this transition right now, and so this is the most exciting time to get involved with Bitcoin or build a Bitcoin business, because Bitcoin is going to force a reimagination of every financial process. I fully believe that. So two, I think, like, if you have an idea, I love that, like you can just do things phrase and I really, I think, like that this is, this is the time to to be bold and take a stab at it. Because if you don't, someone else will. And that this is also part of how I felt about block words, that, to me, this is an absolutely necessary service to be provided in the employment market of tomorrow, and somebody else would have done it for sure, and they may still, but at least we have a head start. And for people who are looking to work in Bitcoin, and this is so cool, we we post our opportunities on all kinds of different you know, indeed, and LinkedIn and and Bitcoin or jobs. And I think everybody we've hired that hasn't come from a personal referral has actually come from Bitcoin or jobs. And everybody that we get from there is are people who have made the same decision that maybe they they're they don't want to start a company, but that they want to align their life and be working on a project that is, you know, meets their values, and they want to be in the space. And so I think that probably every Bitcoin company would feel the same like I think that so you. If you know, if this is something people are looking to do, I would say like, you know, keep a close watch on Bitcoin, your jobs and and there could very well be an opportunity that comes up that ends up being perfect for

Israel: 1:00:14

you. I don't want to say this is the perfect place to stop, because there, there's, there's so many other fascinating topics in the conversation that we could have. You know, gone on about but, but that being said, Scott. I mean, we do appreciate the time and, you know, getting into everything you guys are working on. I mean, personally, as I was mentioning earlier, before we started recording, I just, I love what you guys are doing. I think it's, it's so important also to kind of meet people where they are, and this, this transition. I mean, sometimes we forget how early we still I mean, I know it sounds a bit redundant, you know, we're early, we're early, but sometimes you do lose sight of just in the broader scheme of things, we're at the very, very, very initial stages of this, and being able to offer some friendly tools for employers to incorporate benefits and compensation in a better and harder savings technology is just so important. So all that say, really applaud what you guys are working on. Where can as a handoff? You know? Where can people find you learn more? Yeah. Where do you want to send people? Thanks and thank

Scott: 1:01:21

you again for having me on. It's been having me on it's been such a pleasure chatting with you guys and me too. I could talk about this stuff all day. I'm very active on LinkedIn, So LinkedIn is a great place to catch me. And yeah, please give us a follow. We're corporately. We're active on LinkedIn as well. Block rewards.ca. Is the website, depending on when this airs. It could be block rewards.com by the time that happens. But either way, we'll, we'll point you there shortly enough. We do have a podcast that I was mentioning as well called the block reward podcast. And you know, it's another conversational we had a different guest on every week. We try to keep it light. I so it's might not be the Bitcoin cup podcast for the hardcore. So much as you know, the podcast is mostly in mind for the, you know, the kinds of the employees that might find it as a result of using our services. So we want to have interesting conversations about Bitcoin that aren't so daunting that you need to have read some of those books I listed at the start of the show to appreciate and yeah, that's that's probably the best place to find me, Scott, I

Lynne Bairstow: 1:02:28

have one question you had mentioned. One of the books early on was the price of tomorrow by by Jeff booth, who's one of our favorite guests that we've ever had on, and favorite people in the world as a fellow Canadian and you both tend to think in this bigger viewpoint of Bitcoin as as a transformative power of you know, going forward, have you had a chance to connect and get to know Him and meet with him? You

Scott: 1:02:51

know, that's a really great question, Lynne, and I'd love to, I'm honored to answer that. I going back to the previous question. You asked me about people who are thinking about founding a Bitcoin company. So truly, you know, this all started with Jeff booth book about five years ago. And then I kind of went down the rabbit hole. And there were a handful of people that I got really interested in following Greg Foss and James lavish, and Lawrence Lippard and and Jeff and, you know. So I'm here now today, and and Jeff's a friend. I have met Jeff many times. We had Jeff out to Kelowna to for an event last fall, and, you know. And so, you know, meeting these people and and then building relationships with them has been probably the coolest part about taking action and just moving towards making something happen. And yeah, so just incredible. He is absolutely everything he appears. You know, when you see him on the he's really like that. And so it's been an honor to meet him. And many of these other people are the same. And I, I think that the thing that I've learned the most about Bitcoin on my journey over these last few years is, you know how receptive people are, and if you're you're, if you're really doing this for the right reasons, you know you're just continually met by people who are willing to help. So that could be just very early on, like, I had aspirations that the black reward was going to be this massive podcast, and I was shooting for the most famous guests from day one. I know mostly everybody said yes, like I, which is a very odd thing, you know. I don't think you could necessarily do that in other industries, but it's, you know, and then I just started to get this feeling of like, oh, this is actually how it is. So it's been that way in every aspect of everything we've approached is, you know, does a potential company want to work? Think about working with us. You know, other companies that are on the mission, other entrepreneurs and. Um, it's just a community of people who understand that we are birthing something of critical importance to humanity. And yeah, so it's, it's so exciting to be a part of,

Lynne Bairstow: 1:05:11

yeah. Well, we appreciate you being sharing your thoughts and your journey with us. So much, Scott, and look forward to continuing to follow block rewards and your journey and and having you on in the future again, so again. Thank you for your time. Thank you as well. Thanks for listening to the build with Bitcoin podcast. If you found benefit in what you heard in this episode, we'd truly appreciate it. If you would like share or leave a comment on whichever platform you're listening as this helps others find us, which is especially important for a new podcast. And as a reminder, our content is intended for educational and entertainment purposes only, and is not to be considered investment advice or recommendation to invest in any company or asset mentioned in the podcast. Build with Bitcoin is a proud affiliate partner of river, a full service 100% reserve custody Bitcoin only financial services company for your next Bitcoin purchase, use our exclusive link partner.river.com/build, with Bitcoin. Thank you sincerely for being a part of the build with Bitcoin community.