Jasmine Star (00:00:00) - Welcome to the Jasmine Star show, where we talk about business, we talk about strategy, and today we are also talking a lot about creativity and the business of creativity and doing things in new and different ways. I could not be more excited because Peter and I met as part of an executive coaching program called Hampton, and there I was able to lovingly plot and stock and do a little bit of backend research. And I'm completely fascinated with the business of his business. Now, I know that in the past I have spoken about Web3 and NFTs, and before somebody pushes away and says, no, no, no, this is not for me, let's take a different spin. And this spin is talking about the future of business, and then how to take something that's like digital in an idea. Is this really real? And get proof that not only is it real, it's extraordinarily viable and turn it into a division of physical product. I couldn't be more happy to have the chief creative officer from Pudgy Penguins.

Jasmine Star (00:00:58) - Peter, welcome to the Jazmin Starr Show.

Peter Lobanov (00:01:00) - Thank you for, for the last minute invitation. I know.

Jasmine Star (00:01:03) - I know, so we're here in Miami and I was on Hamdan, and I'm just searching and I'm actually reading different conversations. And then I click on over to your profile. And I was just like, He's in Miami and I'm in Miami, and your girl's a hustler. And I'm like, we're going to create a show around what it is you're doing because I'm completely fascinated. But before I actually get into your current business, I'm going to bring the audience a little bit up to date with prior iterations of your career. So they get a really clean sense of, oh, this guy has seen the world a certain way and has prepared you for this role. So a little bit of backstory. Okay, so you started off and I'm going to talk a lot of the things that you had done and I have I had to write it all down because it was a lot. So in addition, currently to your role, prior founder and principal designer of Bureau, where you work with numerous clients, including those in tech, consumer goods, crypto industries, and you have generated over 250 million in revenue.

Jasmine Star (00:02:00) - You're an investor and partner in Sweet Dreams, Gel Blaster and Xtra, where you utilize your expertise in brand development, and you found it early on in your career. Noir Letelier yes. I mean, did I just bang that out? Yeah, I did it. I'm French. Yeah, okay. And it's a garment. La Tellier in LA where you specialize in end to end development for fashion brands. Yeah. So clearly, clearly two sides of your brain. High creative, high entrepreneur. And then you come across a project around pudgy penguins and people hear this now before again, may I warn you, this is a conversation about business, but a business that you might not be familiar with. And here Peter is going to be putting in wide documentation how he's been able to create a business, co-create a business around things that people are like, I'm not so quite sure. And that's where I want to tap, because you might not be in crypto Web3 world, but people might be questioning, I don't know if this is a business and if you were to ask somebody like Peter, I think Peter is the kind of entrepreneurs as well.

Jasmine Star (00:03:04) - We can make any good thing a business, and that is where I really want to hone in. So thank you for for being here. And let's start a little bit with the origin of how you came into the play. Let's talk there. So we set the standard and explain to people what your business is really focused on. Yeah.

Peter Lobanov (00:03:19) - So Pudgy Penguins was founded by a few kids in a college dorm room in 2020, I believe. And during the NFT craze, this is when, you know, crypto was, you know, Bitcoin was at, you know, a 40 K price point. You know, NFTs were very much kind of following that, that momentum. So you had big projects like Board Ape Yacht Club, you had cryptopunks that are all like Holy Grail NFT projects. Then you had a lot of entrepreneurs and founders who are trying to get into that space as well. And so these kids basically founded Pudgy Penguins. They minted a collection basically generated 8888 digital pudgy penguins, all completely unique.

Peter Lobanov (00:03:59) - So that collection.

Jasmine Star (00:04:00) - Is here because somebody right here is like Jasmine. We've heard you talk about Web3 and crypto, and I have like I've had whole episodes about it. I was chronicling, like my journey into that world, my interest in that world. And so just to bring everybody up to speed when Pudgy Penguins drops, just think about this as 8888 pieces of digital art. Yes. Now you're not walking into a museum looking at art, these digital art pieces, you want to think as if the early days Picasso was actually numbering each one of his artwork. And so in a digital way, you are buying a piece of digital artwork. But because it was bought and leveraged on blockchain, there's actual direct origination. So this is where you call provenance like it's proof that you bought this artwork. And so these college kids created 8888 pieces of artwork that have been bonafide. And some people are like, I don't really get it, but hold on, a business is here and it's burgeoning big time.

Jasmine Star (00:04:57) - Okay. Yes.

Peter Lobanov (00:04:57) - And so, you know, the original. Founders didn't really know what to do with the project after facing that much, you know, success.

Jasmine Star (00:05:06) - Like what kind of success? I mean, we're.

Peter Lobanov (00:05:07) - Talking like 4 or $5 million, like in a matter of a couple of minutes.

Jasmine Star (00:05:10) - So college kids for millions.

Peter Lobanov (00:05:12) - Of dollars in a matter of minutes. And, you know, now you're kind of like you're in a different mindset, right? The thing is, is you don't really know what to do, especially at an early age like that. This is probably their, you know, first successful business. You don't really know what to do with that. Right. And so it opens up an opportunity for somebody who looks at pudgy penguins through a different lens. And so that's where we came in. My business partner Luca.

Jasmine Star (00:05:35) - Lens being business.

Peter Lobanov (00:05:37) - Business. Yes. And just opportunity in general. And so my business partner Luca, who's a CEO of Pudgy Penguins, essentially was first, a buyer of pudgy Penguin NFTs.

Peter Lobanov (00:05:48) - And so he that was actually the first digital collection that he actually introduced me to. So he introduced me to NFTs in general. And the first collection of I laid my eyes on was Pudgy Penguins. Got it. And I had the same question. I was like, why are you spending 800 $1,000 on like a JPEG like this, right? It just doesn't make any sense to me. And I'm in a creative field, you know. And there was it was a lot of like, oh, yeah, there's something about them, you know, they're great. And, you know, there's also community around it. And without community, you don't really understand the power of these penguins, which is a big, big, big variable that I didn't really understand. And so had he kind of phrased it like that, where it's like you're getting access to a community of like minded people, it would have reframe my perspective to show much more of an appreciation. Okay.

Jasmine Star (00:06:34) - Like getting access to a community of like minded people who all spent 800 or something, like a variance of a significant amount of money on a piece of digital artwork that is a buyer's community and you're tapping in from a business perspective.

Jasmine Star (00:06:49) - I am literally tapping into people who buy and value the same thing, so you can market to them in a very, very honed in way. So the business opportunities Luca and yourself start seeing. Okay. Yeah.

Peter Lobanov (00:07:00) - And so he saw that there was this circulating idea of pudgy penguins being for sale or the founder, Cole. Shout out to Cole gray guy was open to the idea of selling pudgy penguins. And so there were a few public bids that were placed on Twitter at that time. Now it's X that somebody wanted to buy Pudgy Penguins. And so people were throwing out public bids like, I'll pay you 200 ETH for it, I'll pay you 400 ETH for it. And so Luca basically tossed in his hat in the ring. His bid was accepted after much convincing and much swaying and trying to figure things out. And I get a call like after, you know, after that time, like, I wasn't on the timeline, I didn't really know what he was doing. I was busy building my own business, and he gives me a call and says, hey, I'm buying this company called Pudgy Penguins.

Peter Lobanov (00:07:44) - Like, do you want to come in this this is 2021, okay? And he says, do you want to buy this company? And I was like, okay, what do you what's the business plan like what do we want to do? And before this, just for context, like him and I would invest into consumer product, good brands, fintech brands. And so we're always in this like investor mindset. And so this was just another project that he basically brought to me and said, hey, there's something special here. I don't know what it is. You know, at the time, NFT royalties, which were basically like transaction fees, every time a penguin was sold, you would get, you know, a piece of it as the original creator. Okay, hold.

Jasmine Star (00:08:17) - On. I explain it like it's five because we had to explain like I was five. So let's just say for $800, I bought a pudgy penguin and then I can resell that to somebody else. And let's say I sold it for $1,000.

Jasmine Star (00:08:31) - Well, you the owner, the the artist. In this case, our pretend Picasso will get a percentage of the sale because he or she was the originator of that. That's fascinating. That is never been ever done before. So just imagine if Picasso had royalties on what the works that he sold every time it went to Sotheby's, every time it was resold, his estate would get a piece of that. So this is a new way of doing business for the creator or the originator of the idea, which was fascinating. Yes, it still is.

Peter Lobanov (00:09:04) - I mean, you're essentially taking a real world asset and bring it in on chain. And so you're seeing the behemoths nowadays, like Blackrock basically being super bullish on this idea of, you know, real world assets and just tokenization of everything. Yes. and so NFTs are basically an introduction to that. Like that had to happen before where we're at today. Yes. And so the business model was very attractive because, you know, as you can imagine, at scale, like you can generate very healthy revenue on just the transaction aspect alone.

Peter Lobanov (00:09:41) - And so that was one of the business models. That was one of the hey, how do we get an ROI? He said just on the royalties alone, we'll be able to generate X amount and recoup the initial buyout cost. Okay. And so you know that it took some more convincing and swaying. And after that we said, all right, let's do it. The bid was accepted and we assumed ownership of Pudgy Penguins.

Jasmine Star (00:10:02) - 2021.

Peter Lobanov (00:10:03) - 2021.

Jasmine Star (00:10:04) - And since then, the NFT landscape has really changed. Like the demand for for NFTs is not not the same as it was. So that business model of of saying, hey, we could generate for every resale, has that panned out the way that you had expected? Okay. No. Okay.

Peter Lobanov (00:10:22) - Very early on, we realized that it was not the case. So there's a few things that, you know, aside from the expensive price tag, there were a few other variables that we didn't account for. One, it was the convincing of the existing community that was already attached to that project.

Jasmine Star (00:10:36) - Okay, I'm gonna pause here. I'm going to pause here. I really want to honor this space that Peter is inviting us into, because he just said we had this business idea. And then quickly, what happened was that business idea is not working out the way that we had anticipated. In your journey, you will face very similar things. And what I really want to hone in is on the resilience component. We must make this work. And on the back of that, he has that amazing community, that consumer base that we thought, oh, they're pre-qualified buyers. They need to convince that community that they're not going to change the ethos of what they originally bought into and how they're going to expand. And are they sellouts and what are they here for? So this is a whole introduction of a new community to leaders. So bless it all. Yeah. Explain us like where are you at at this time where you see the writing on the wall and you have a community that's not fully bought into you? What must you say to yourself to say we're still moving forward?

Peter Lobanov (00:11:30) - You know, it took a lot of convincing and the alignment of our interests.

Peter Lobanov (00:11:35) - And so we had a first do a very heavy listening session of like, what are some of the current pain points the community is going through now? These are these are people who all feel like they're a part of this project. They are the people who have essentially been a part of the buying journey. They have been the people who have been championing the brand the whole time and being those active participants. And so those active participants, you know, they have those incentives of seeing their underlying asset appreciating. Right? So to them, you know, when, when, when we took over the project, they wanted to understand that, you know, one, we are coming in with a very clear blueprint, right. It wasn't going to be this confused thing, you know, that was, you know, kind of endured previously. We came in with a clear plan and they were going to like us. You know, it was like, it's a lot of people, a lot of personalities. You know, your first thing, it's an alligator mind.

Peter Lobanov (00:12:26) - It's like, hey, I don't know these people. These people might come in and butcher the project and have interests that don't align with mine. My the ethos that I bought into may not align with mine. And so in order for us to successfully kind of navigate those very complex conversations, we had to do a very heavy listening session. And so we literally invited pretty much as many holders as we can possibly invite into a discord. And so all of these, we're talking a couple hundred, almost a thousand active listeners who are active.

Jasmine Star (00:12:56) - Community didn't exist before then.

Peter Lobanov (00:12:58) - No, they did.

Jasmine Star (00:12:58) - They did. Okay. So this is a separate listen only feedback.

Peter Lobanov (00:13:02) - So in the world of NFTs and crypto and Web3, you know, the main communication channel besides Twitter formerly, you know, x formerly Twitter is discord. Yes. and so these communities are subsidized within these discord channels basically. And so when you buy an NFT, you get access to that community, correct, of like minded individuals, etc..

Jasmine Star (00:13:21) - And so that community already existed. But if they're skeptical of you, are you adding just like a new channel within, like, how are you getting these people to say, we want feedback here?

Peter Lobanov (00:13:30) - So there are these like inner igloos, we like to call them where it's like it's kind of like a a town hall meeting.

Jasmine Star (00:13:35) - Right. Got it.

Peter Lobanov (00:13:36) - So we had a town hall meeting, when we acquired Pudgy Penguins. Okay. And so during that town hall meeting, it was a lot of introduction. So it was, hey, my name is Peter. You know, I formerly worked on on a company X, Y, and Z. Here's kind of why I'm qualified to, you know, shepherd this brand forward. My name is Luca. I've done X, Y and Z. And so there's a lot of that introduction to tens of hundreds of people, basically. And so during that town hall, we would bring people up to voice, you know, some of their concerns or questions.

Jasmine Star (00:14:06) - What was the common theme like? What was their pressure points like, what were you hearing?

Peter Lobanov (00:14:09) - I mean, it was like, what do you plan? What's your plan like, what are you going to do with the project? Right. And so we didn't really have like the most concrete plan because this is such a new business, such a new industry, it's like, we'd be lying to you if we knew. What we knew is we were going to start creating these promises, these brand promises, that we were going to end up fulfilling one, we're going to overhaul the entire brand identity. We think that the brand positioning is not in its most optimal place. And so we want to come in and do the simplest things like redesign the logo, launch a new website, define the company roadmap, which in Web3. And this was like a theme before. I think it's a little bit of a theme now. These NFT projects, these Web3 communities, would put their company's blueprints or like their roadmap publicly as part of like.

Peter Lobanov (00:14:59) - You're not just buying into a project purely based off the art. You're also buying into some of the promises that they're making, right? Which is all displayed in a very clear roadmap. Now, you know, to be honest. 99% of these projects, I mean, they were saying the most craziest thing. It's like 2021, we're gonna, you know, do this collection a quarter or two. We're going to launch a movie quarter three, we're going to launch a game quarter four, we're going to launch an apparel brand, and we're going to make X, Y, and Z dollars. It's like, do you guys have any idea how hard any of this stuff actually is? Like, you guys are making some very heavy promises.

Jasmine Star (00:15:34) - So I want to pause here and okay, I'm going to bring this back to the listener essentially. So I was introduced when I found it a tech company of a thing called a roadmap. This is what the tech team is saying. This is the order in which we're going to do it.

Jasmine Star (00:15:48) - This is the time frame that we're assessing. And then in Web3, people sort of putting their roadmaps on the outside. And so what you had was a lot of creatives who are making a lot of money, and they weren't necessarily thinking entrepreneurial, so they were able to make these big, bold promises. We're going to have physical locations in 12 months, and we're going to have yacht parties, and we're going to have concerts around our figures, right? So they're making creative promises on backed with a lot of money, and there's a bunch of entrepreneurs who are saying, you have no idea what you're saying. And so now with Pudgy penguins, there are entrepreneurs coming into a market where they have to educate, convince, and then say, like our timeline, the difference between our timeline and their timeline is ours is less sexy, but we're going to get it done. That's a lot going on from an entrepreneur perspective. So when people hear this, where are they at? What do they come to you.

Peter Lobanov (00:16:42) - When they hear that? You know, there's a lot of skepticism, right? And there's a lot of concern like, how are you guys going to pull it off? I think, you know, part of that is, is obviously the entrepreneurship background. And at that point, because we acquired the project, we didn't just found, you know, launch it ourselves. It thankfully we had some of the some of the skills and some of the background to actually like put our money where our mouth was. And so it took, you know, just doing the very little things. Right. It's like the the rebrand, even the rebrand, like a company does a rebrand they don't want they don't have an army of people giving them feedback. Right. But when we did a rebrand, it was like the whole community has to be a part of this journey too. So it was really taking people who were not just consumers of the product, but our active participants. So they are also helping shape the future of this company, which is basically at a deeper rooted core.

Peter Lobanov (00:17:38) - Web3 and NFTs in general. I would just talk about, you know, some of the ethos in Web3 is essentially democratization of ownership, of viewership of access. Right? This is the beauty. You know, we've for for a very long time, we've had kind of like a horizontal playing field of social media. Right? So you have Facebook, Instagram. Right. These big giants Web3. The difference between Web2, which is where we're at right now, Web3 is more about vertically stacked social experiences where they instead of just being on these large, broad apps, now you're going to more micro, more community oriented, more niche focused, more interest focused. So instead of just seeing whatever the feed curates for you, it's like, no, I want to just be at a place where I just see what I'm interested in, right? You know, if you're interested in bettering yourself and you're interested in, you know, growing as a human being, right? Like you have to kind of trick the Instagram algorithm to kind of show you those things otherwise.

Peter Lobanov (00:18:36) - Like it's just going to feed you things and take you on this deep rabbit hole, you know, and you're going to spend hours of your time not doing anything. The power of Web3 is if you align yourself with a community that shares similar core values, and it's majority of these communities are token gated, right? AKA buying a, you know, an NFT, you get one step closer to aligning yourself with those type of communities and finding a sense of belonging. And so we had to create an environment where people can feel like they belong, where we adopt some of the community developed core values. They weren't core values that Pudgy Penguins developed themselves. It was after the Pudgy Penguins project was launched. The community. Right? The vibe, the the feeling right that became part of the company's core values. So instead of us coming in and changing and based on our interests, we just leaned into it, said, hey, if everybody's feeling like this, if there's a common theme going around here, let's lean into that.

Peter Lobanov (00:19:32) - And so we just kept leaning into it. You just kept listening to the same feedback that was coming in, and we would be very receptive. We'd be very open to it.

Jasmine Star (00:19:40) - But so good.

Peter Lobanov (00:19:41) - We we wouldn't just take the feedback and just go quite literal. No, they were ideas to help us shape the future of pudgy penguins. And so we like to look at ourselves as, you know, the just the executioners of a lot of these ideas. So. Good.

Jasmine Star (00:19:56) - I'm gonna pause here. Yeah. So the community. Start thinking of, like speaking into logo and branding, and they start saying, okay, you're about us. Like we're on your side. From a business perspective, what's the next big business move?

Peter Lobanov (00:20:08) - The next big thing for us was to look at it through a traditional IP lens. So not just like, hey, this is a digital project with these cute penguins. It's like, what else can we do with this? Right? And so when you start looking at it through an IP lens, right.

Peter Lobanov (00:20:23) - And you know, it basically puts you in a, in a whole different mindset where you're like, okay, now we got to start thinking content. Now we got to start thinking physical products. We got to start thinking more than just this, right? Because the community was also asking for it too. You know, there were a lot of people who are like, are you guys ever going to make toys? Are you guys ever going to do content? Because this roadmap, it was promised in the roadmap, you know, when we acquired it, right. So we had to also when we bought the company, we had to readjust the roadmap according to what we said we were going to do. So, you know, it was a little bit of parting ways with the old roadmap. Taking some of the good parts of the old road map and incorporating into ours. So we have those online incentives, but we started looking at it through an IP lens. And so the first first go to action kind of initiative for the company was, like I said, overhauling the entire brand identity.

Peter Lobanov (00:21:13) - So this wasn't just logo. This was brand positioning, our messaging, defining our core values. So we actually have something to stand on. Then after that came partnerships. And so we obviously knew that we couldn't go out there and manufacture our toys ourselves and get the distribution that we wanted to. So the next step was to go find a licensor, right? Somebody to help us with the production, someone to help us with the distribution. So we essentially locked in a retail partner. This was PMI and still is our current partner. And they essentially handle toy manufacturing and distribution. So some of their accounts are Walmart and Target etc.. And so we went to them. They created a non-exclusive deal with them and went straight to work, started designing the toys. Once we had these physical products in hand, the next thing was, all right, we got to get these out. And so thankfully, by the power of community, this is where this is where things get interesting. So we launched these toys, and Luca and I and the rest of the team were very ambitious.

Peter Lobanov (00:22:19) - We want to go mainstream fast, but we're a young brand. Technically. We're like six months old. Four months old, right, with these cute penguins. So we make the big bet on Walmart early on. We say we want to go straight to Walmart. And at the time, I think we were quite delusional to think that we would be able to go into Walmart. But Luca decided that it was it was time for us to try to go mainstream. And so through our previous relationships, this is Gel Blaster, etc., we were able to facilitate an introduction and essentially talk to Walmart and say, hey, here's our line, here's our, you know, beautiful pudgy penguin brand. You know, the first thing they were asking is like, where are you guys from? What are you guys doing? And at that point, it was really complicated for us to elaborate who we are to because we didn't have a movie. We didn't have a TV show. Right. We were Pudgy Penguins NFT project.

Peter Lobanov (00:23:10) - Yeah. And they said no, obviously. And so we were like, all right, we have to think quickly here. This is like a matter of days. We just had to think with a plan B toys were already out in production. We had to fulfill our promise here. And so the promise that we make, this is a big thing. It's like when we make these promises, we have to fulfill them by any means necessary. So instead of giving up, we were like, all right, let's just go DTC. Okay, let's drop these on Amazon, sell these DTC. The power of community was that was like one of the wakeup calls for me, like the true power of community. People were so excited that we took a digital product. Some of the people who were holding these NFTs, we actually licensed their app, their profiles. We licensed their digital asset to turn that into a physical toy.

Jasmine Star (00:23:59) - I'm gonna pause here because I'm going to break this down. This is so freaking fascinating.

Jasmine Star (00:24:05) - So I am a consumer of NFTs. I am in discords. I am part of conversations and I'm just watching. Do I have any ambitions in this sector? No. At least not yet. Okay, so how does this pertain to what it is that you're doing and why this is such a unique conversation? So he's saying that they're licensing from consumers. So what we had here was in an earlier episode we had Michelle talking about Get Gorgui. So just imagine if I bought a get Gorgui and it's the green can in this way. And she says you know what I want to do Jasmine I want to turn that green can that's done in this particular way and I want to license it. But as part of it, even though I own Get Gorgui, you also own this green can. So every time I do something with this green can, you're going to get a piece of that. So now let's go into pudgy penguins. There are people who own particular pieces of the digital art. Now what pudgy penguins, new owners and roadmap are saying is we're not going to create 8888 versions of penguins.

Jasmine Star (00:25:14) - We're going to pick what we think is going to be the best for consumers. And so once they distill down, hey, we think that these are going to be the first iterations of our penguins who ever owned that penguin. The owners of this business now goes to them and say, listen, well, this is going to be a win win. We're going to license your artwork. And every time this penguin sells at target, you're going to get a piece of that. Just imagine if you were that person. You're getting a win of the business win. How do we do that in our communities? I want you to think long and hard about how do you find multiple ways, not just for the business but for your community to win, even if it's not in this realm? You can find ways if you map to it. So I want to continue this conversation because it's fricking fascinating. Yes.

Peter Lobanov (00:25:59) - It is not easy to go about this business model where you have to license it, because on a licensing game, you know, you're seeing very, very tiny margins.

Peter Lobanov (00:26:07) - You know, you might think surface level. It's like, oh my God, this company is selling tens of millions of toys. They're making tens of millions of dollars. In some cases. If it's direct, then yes. But if you're, you know, including licensing partners and distributors, etc., you're kind of losing a little bit of, of that. And so, you know, the big idea was, hey, instead of, you know, designing our own penguins, let's just go ahead and license these directly from some of the community members. The thing is, that was a very complicated process because there are no systems in place for that. We we learned that this is actually there's a lot of legal implications here, a lot of ramifications here if you actually look at it through a legal lens. Yeah. How are you how are you guys going to accomplish this. So part of our acquisition we had to bring in a legal team. So we actually brought in a CLO CLO early on like two months into the brand to help us navigate not only the Web3 sector, but the physical sector as well, because one wrong move, we can get sued into oblivion.

Jasmine Star (00:27:03) - So okay, okay, so we left the story. Walmart says no. And within a couple of days you're like, we're going forward. We're going to make this happen. So then you go to the community, you have a wake up call in the community. Because what happens when you say, hey, we're putting these on Amazon. Yes. And your community shows up big time. But what was the wake up call?

Peter Lobanov (00:27:22) - The wake up call for me and for the entire team was the power of how many toys that we could sell in a very short, condensed period of time. Good. When we announced Amazon, this is one day in not only the entire Twitter timeline at that time was absolutely like they were ecstatic that we were actually selling physical toys. No other projects previously have done it at that scale. And everybody just went crazy. Not even not not just the people who were active participants in the pudgy penguins community, but people who were in the NFT space in general.

Jasmine Star (00:27:53) - Because you guys become proof of concept, proof of concept.

Peter Lobanov (00:27:55) - You're like.

Jasmine Star (00:27:56) - They're doing.

Peter Lobanov (00:27:56) - It. Exactly. They're doing it. So let me buy into that. So imagine I mean, this is thousands of people that all got a whiff of this and looked at it and said, oh my God, like, I have to go get it. These penguins are cute too. So a lot of people have children, you know, and it's and it it was a very easy no brainer. Spend ten bucks at scale in 24 to 48 hours. We became Amazon's choice number one toy in the entire toy category.

Jasmine Star (00:28:24) - Shut up.

Peter Lobanov (00:28:25) - Yeah. Whoa. So this is pointing the entire community to one destination, and it just I mean, it exploded. And in my years of consumer product goods, I mean, you don't see that unless you get, like, a Kylie Jenner equivalent influencer to point that much traffic. The fact that we did this with the active community, not only the people who own those NFTs, who bought those toys, they also became active champions.

Peter Lobanov (00:28:52) - They went to tell five of their friends, hey, I own this digital asset now it's a physical toy. Go buy it, And then those five friends told the other five friends, right? Because they were so excited that their friends sold them this idea. You just you were so excited about this idea, you needed to tell this idea to somebody else. And then that idea spread. And so it just became a life of its own. It picked up. I mean, it just it went so parabolic that. We ended up getting that recognition, and we've never done that before, especially through Amazon. And for weeks we were the number one toy in the toy.

Jasmine Star (00:29:27) - And were you able to leverage that to go back to the Walmarts of the world?

Peter Lobanov (00:29:31) - Man, it's really interesting talking to you because you're like already just pulling everything. You're you're getting to the right kind of conclusion. So we looked at it. Yes, yes. So we one week after we, we took those stats and we were like, hey, we need a second, second call with Walmart.

Peter Lobanov (00:29:46) - They were receptive, but they didn't buy in all the way. So week two, week three went in and took a little bit more convincing. They looked at those stats and they were like, okay, there's something here. We have to pull the trigger. And so Walmart placed an order for at the time it was about 2300 stores nationwide.

Jasmine Star (00:30:04) - Wow.

Peter Lobanov (00:30:05) - And, we launched toys in, 2300 Walmart locations nationwide.

Jasmine Star (00:30:11) - And after you get Walmart, do you land other stores?

Peter Lobanov (00:30:14) - So when we got Walmart, that was another huge milestone for the NFT space in general. And this was like, this was ten times bigger than Amazon because it was like, these guys got Walmart, like Walmart bought into this idea, they bought into the concept. And this is what made our toys awesome too. So the value proposition, our toys, besides being cute as hell, is for every toy sold, there was a QR code that came with that toy, which essentially allowed you to scan it and create your own digital penguin.

Peter Lobanov (00:30:50) - Oh, and meanwhile, where are you going through this process? You're creating your penguin. We called it Forever Penguin because it was going to be your, like, digital buddy at the time. And while you're going through this unboxing journey, you're unlocking these amazing trades to dress up your paying one, your digital version of it. What people don't know in the back end is we're creating wallets, Web3 wallets, essentially for every single user that went in ahead and scanned this code. So now we've essentially connected Walmart to the Web3 space.

Jasmine Star (00:31:20) - Oh my god. So that was a value proposition that you pitched to Walmart is like, we'll get you we.

Peter Lobanov (00:31:25) - We we pitched it as you know, not only cute toys, but there was this digital upsell because Walmart wants to make sure that there's not only just skew variety, but there is something interesting behind it too. Right? So the digital experience at the time, we didn't even have a game out. So we had to come up with something rapidly to kind of substitute for like, all right, what can we do in the digital space? And so we're like, oh my God, we're in the Web3 business.

Peter Lobanov (00:31:47) - Like, why not go ahead and start creating user wallets? Right. And how do we do that? Through gamification. And so part of our ethos is pudgy penguins is to onboard masses into Web3. And the only way to do that was to start getting people familiar with the idea of these Web3 wallets, these crypto wallets.

Jasmine Star (00:32:04) - So okay, so but we didn't.

Peter Lobanov (00:32:06) - Use any of the jargon during this journey. So, so when you go in and unbox the toy, you we're not saying create your crypto wallet, right? You just Gmail and password and that's it. What you don't know on the back end is you actually have a okay.

Jasmine Star (00:32:19) - Okay. So break this down for me and okay. I'm sorry for the podcast listeners who are not interested in this, you could just skip forward by two minutes because I'm going to get super freaking nerdy right now in the Web3 crypto conversation. But don't go away because the business of the business and go to market strategies are yet to come. When I created a my first digital wallet, it was on MetaMask and it was cumbersome and complicated.

Jasmine Star (00:32:42) - How is the average, you know, Susan from Minnesota who bought her ten year old this going through and creating a wallet without feeling that same friction that I did, and I feel like I'm an I'm not the sharpest crayon in the box, but I'm sharp enough to color. I was like, this is freaking cumbersome. How are you systematizing and streamlining it? So easy for that user?

Peter Lobanov (00:33:00) - I think a lot of it has to do with messaging. Right? And and where you go and find this information and how you go about it. Right. Even though we went ahead and created wallets for every user that created an account. Mind you, this is they just created an account. But on the back end they also created a wallet. So if we wanted to convert these users into active Web3 participants, we could with the flip of the switch. But it was more gamified. It was more like enter your email, save your password. Got it. But on the back end it was more so creating a wallet.

Peter Lobanov (00:33:27) - So that's the exciting component under that's like layers underneath pudgy penguins. And we know that we're not going to have a very compelling business model saying, hey, we're going to give everybody wallets. Like what? What are you talking about? Right? And why am I giving my kid a wallet? Right. So it's baby steps, right? We have to flesh out this business model and make it not so cumbersome. Yes.

Jasmine Star (00:33:48) - Oh. So interesting. Okay, so now you have taken two disparate ideas and you're creating and have created a business. So now in order to sell more pudgy penguins, you're in the question mark content game. Social game. What is that strategy for a go to market? Because now you're playing in an entirely different field. You're going after consumers in a different way.

Peter Lobanov (00:34:11) - Yes. So at a core, Pudgy Penguins is a character driven IP brand that creates content, product and experiences in the theme of penguins. And, you know, the first step was product, right? Traditionally, you won't go product first.

Peter Lobanov (00:34:30) - You'll go content in some sort of media or game. We had to go product because there were a lot of people who were excited about taking something that was already digital and turning it into physical, but we later uncovered that we have to go by these traditional IP roots and kind of this character building journey. And so immediately in tandem with launching these toys, we had to start thinking about content, which was a whole different beast. Yeah. So we've had discussions with every production studio, every, you know, independent studio, Hollywood execs. I mean, everybody was pitching us, you know, hey, we should make Pudgy Penguins a TV show. You should think about movie a game. And we were like, okay, well, that's kind of like the obvious route, for sure. We can do that. But I think putting all your eggs in that basket one, it's a lot of time, a lot of resources to produce something like this. And you're not optimizing for a high hit rate.

Peter Lobanov (00:35:22) - You're putting you're just like hyper focus on this one thing. Yeah. So us growing up on social media, I'm 27 years old, Lucas, you know, 26 years old, right? Like we're social media native people. Like we've been in the influencer space, like we've seen these, you know, high, high following accounts being stood up. We kind of have a slight like inclination on how this is done. And so we ended up spinning up a pudgy Penguins Instagram account and just focusing on short form viral content.

Jasmine Star (00:35:49) - Freaking love it. I was hoping you were going to say this because it's like the data will lead to the movie. Exactly. Without this big hedge of a basket of what we think the personalities are, or the the comedy. Who are they? Yes, yes.

Peter Lobanov (00:36:02) - And we didn't know any of this. And so first, I think the first couple of months were like the ugliest moments because like, I'm aesthetically oriented. And so I was like, I hated everything we produced.

Peter Lobanov (00:36:13) - It was so raw. It was so but that was kind of like part of the building journey. Yeah. But the community members were like very receptive. They were like, this is this is awesome. Like, you guys should keep leaning into it. And so we were trying a bunch of different things. We were having a penguin mascot run around New York saying like, you were loved, you know, and honk if you if you love if you love penguins, right? Like doing viral, trying to optimize for virality. Then we started doing positive affirmation content, and that was one of the first things that popped off for us.

Jasmine Star (00:36:39) - So talk to me about give me the visuals. Are we testing like the cartoon aspect of it? Because you said there was a pudgy penguin running around New York, which is.

Peter Lobanov (00:36:46) - So there was a we were doing IRL stuff, okay, right. To bring more awareness to the Pudgy Penguins IP. So it was literally a big penguin in a mascot with a big pudgy penguins logo running around New York, like in your face.

Peter Lobanov (00:36:57) - So that wasn't like the best thing. But it was. It was cool. But one of the things that we wanted to create was a feel good brand. And so Penguins, you know, there's almost like no race tied to it. There's no private agenda, there's no gender. Right. It's like so equal. And so we were like, hey, let's just lean into maybe a positive affirmation category, like, let's just make somebody's day feel good. Okay. So we took, you know, some, you know, positive affirmation quotes, put a cute penguin on it, started posting that on the feed, and it just started growing because people would share that. Right. It was like, share this with somebody you love or you adore. And then and because of that relatability, because of the call to action to share, the account started growing in a very natural way. And, you know, we we we made that a theme for quite some time, like for 2 or 3 months.

Peter Lobanov (00:37:47) - And the account was growing. I mean, we're talking tens of thousands of followers a month. Then we started hitting a cadence of hundreds of thousands of followers. Then we were like, we have to think animated like we want, let's bring life to these penguins. And so the huge challenge was there was 8888 penguins in our ecosystem. How do you pick one? And here's where it gets interesting. From a licensing aspect. You can't. If we were going to go and license a penguin from one of the holders to be our hero penguin to drive the animations forward, what would have happened a year from now when the licensing agreement expired? You're giving all the leverage to that person to say, give me three times out of the money to keep your star, right?

Jasmine Star (00:38:26) - Well, then, okay, could you license it for much longer?

Peter Lobanov (00:38:30) - You could. Right. But again, you were always going to arrive to this realization that there was going to be some sort of leverage down the road. And so we just have to think five steps ahead.

Peter Lobanov (00:38:40) - Yeah, it was nothing against the community, unfortunately. You know, there were some people who were not happy about the concept, but we had to explain it to them like, hey, just like I'm talking to you. Like it's going to get complicated down the road. So what do we do in the ecosystem of penguins who all wear traits hats, shirts, glasses, mohawks, you know, afros, whatever. We created a penguin that has none of it, so there's no traits. It was just a pink and a blue penguin. Okay. And the content that we were creating was not. It was our first positive affirmation oriented. So it was a penguin talking to you. And we were like, that didn't sit right, because you have to think about voices. And it's like, I don't want to I don't want to put a voice behind the brain for now, okay. Right. And so we stripped of the voices, it went straight into captioning the video and just, you know, you ever watch, like, Charlie Chaplin movement movies? It's silent movies, but the movements are really exciting.

Peter Lobanov (00:39:31) - Yeah. So we we did that. We kind of followed that principle of like, making the content so exciting and engaging via movement. Right? Yes. But the relatability aspect was something we wanted to hone in on. So the content was very much riffing on internet culture stuff that was like very mimetic things that you've seen. You've seen a meme like this before, but has it ever been been turned into a video? Like, has it ever been animated? So we took these viral memes, these concepts, and turn them into animations in the theme of Cute penguins. Got it. And so that was I mean, it exploded our first hour, I'd say maybe like our sixth animation. It was a Netflix video. As a binging at home, you're watching Netflix, you're like binging a series, and it's like you look up, it's like, what the hell? What are the time? Go! So it was a cute penguin laying on the bed and eating chips, and it was like a time lapse of like the, the Netflix dome just playing over and over again.

Peter Lobanov (00:40:21) - And it's just like you're kind of living through this timeline. That video got 10 million views in a day. Wow. And that kickstarted the whole momentum. And now we're our single highest grossing video's almost at 100 million on Instagram. We've generated, you know, close to half a billion of impressions. Last year alone. We have, 20 billion views on Giphy. We've surpassed, you know, very known IPS and not not not that it's a bragging right. But again, we've just very much capitalized on being a close to, you know, just internet culture, right? Like we wanted to be, you know, not only crypto's mascot, but we wanted to be like the new meme cat, but it's a penguin.

Jasmine Star (00:41:01) - Got it. One of the things that I think immediately is when you had to tell your community, hey, we're creating like essentially our own intellectual property. We're going to create our own IP that's not licensed from the community. And there might have been pushback, but when the community sees that level of success, there's a halo effect of it.

Jasmine Star (00:41:19) - It's like the value if they decide to resell that Penguin NFT, even though it's not exactly what's licensed, the value of it goes goes up. As a result.

Peter Lobanov (00:41:30) - It's the brand name now brand.

Jasmine Star (00:41:31) - Name.

Peter Lobanov (00:41:32) - Now you're selling the brand name. And you would think that like, oh, well, you're not using my penguin. No, it's the pudgy penguins. It's just there's a bunch of different iterations. Like, our skits will sometimes include a hat now that is used from the pudgy penguins ecosystem. Nice. A shirt from the pudgy penguins ecosystem. So these these assets think of them as like, iterative. Different designs of the same penguin, the same the same anatomy, the pudgy penguin. If you look at the ecosystem of all penguins, right. And all penguin brands Happy Feet and Club Penguin and penguins and Madagascar, our penguin, like, you know, it's the pudgy penguin, right? Right. It's. Yeah, exactly. It's got that pudgy, pudgy factor to it. It's cute.

Peter Lobanov (00:42:10) - It's something about it is truly magical. And you know. People instantly kind of recognize that, and they're able to make that affiliation with that underlying asset.

Jasmine Star (00:42:20) - So I have to say that in a way, I appreciate that very much, because I am an NFT holder and I'm.

Peter Lobanov (00:42:27) - Hoarding pudgy penguins.

Jasmine Star (00:42:28) - I am not, I am not, I'm not. Wrap this up. Now that I have now that I have the hookup, now that I have the hookup, I'd be like, who in your community should I be introduced to? Oh, I know.

Peter Lobanov (00:42:36) - Just the guy.

Jasmine Star (00:42:37) - Okay, okay. So I, as an NFT holder, invested in the friends. Nice. And one of the things that Gary had done and I if I was closer to the project, I might have been tipped off by which ones were going to be the ones. Right. Black cat? you know, I think that it would have changed things for me a lot in regards to what I was investing in. And so for people who are black cat holders, it's just like, game over.

Jasmine Star (00:43:02) - Like you guys are hedged. And then there's other people in the community. I'm just like, oh, well, had I known I bought a loyal lobster and it's great, I love that I have it and I love that I've been I got I bought NFTs just to learn the game. Right. So I didn't even know what I was getting into. And so when I see what you guys have done and because I'm on an outsider with Gary getting his toys as part of like toys R us and he's going that that route, what is the distinction between the products and how are you coming in? I mean, this is so new. You guys are like beyond the forerunners. Like, this is crazy to me when I'm watching what it is that you do. I'm so fascinated that you guys are literally creating something that has never been freaking done, and doing it in your own way. That has a very different trajectory, feel, pulse. And so I'm watching this and I have to ask, okay, you have these products.

Jasmine Star (00:43:54) - You're very in tune with culture. You don't have voices. What is the next step like, are you guys look at Nickelodeon. Are you guys looking at this and saying, okay, we're ready to make a movie, even though we've never had voices before, like, what is the next thing?

Peter Lobanov (00:44:08) - The next thing for us is story. We if you look at Pudgy Penguins, it's like, where do they come from? You know, who are the main characters? What is that? Where do they live? Right. For us to be a physical oriented brand, right? We have so many physical products out there and 66,500 stores globally from ToysRUs, target, GameStop, we just announced two days ago. Congrats. Thank you, thank you. The cute factor is one value proposition. The second has to be deeper emotional connection. Right. And so we were looking at it like, okay, how do we establish a deep emotional connection where you can start finding, you know, fans in what we're creating, right.

Peter Lobanov (00:44:53) - How do you how do you, you know, create these opportunities? And if you look at any story or any character IP or just any character brand ever, like there's some sort of background of story, like you have some information, you have the name, you have where they live.

Jasmine Star (00:45:07) - Journey, the.

Peter Lobanov (00:45:08) - Hero's journey. Right. And so we've we realized that we didn't have that, like, okay, we've been so focused on physical and, you know, building a strong community that we didn't really have time to do storytelling. So a big part of my focus is doing storytelling. So we're going to be at Comic-Con this year for second, second year in a row.

Jasmine Star (00:45:24) - Congrats.

Peter Lobanov (00:45:25) - Thank you. And we are going to be unveiling our first comic. So we're going to go to Comic-Con. We're not in the comic business, but we wanted to give our audience a small piece of the official pudgy Penguins lore.

Jasmine Star (00:45:39) - But it's it feels like such a freaking natural progression. Because it is.

Peter Lobanov (00:45:42) - It feels like that.

Peter Lobanov (00:45:43) - Yeah.

Jasmine Star (00:45:44) - Raw. I'm obviously I am obsessed with this. I'm plotting alongside yours. Yes, yes. Oh, exciting. Congratulations, dude. Okay, so then bring me up to speed from like the business component of coming up with story. And so I'm going to pause here because you're like, I don't do cartoons. I'm not planning on being in Comic Con. It's story. It is origin story, either of the brand and or you as the founder. And so now we have characters that is so important that their story resonates. Can I, can I guess what you're doing? Go for it. Okay. Because we've been I mean I'm going to see because I'm spitting a big game. Yeah. Everything that you've said I was like then this, then this. And in my head I was like, dang, it's.

Peter Lobanov (00:46:26) - A natural progression.

Jasmine Star (00:46:27) - It is a natural second nature. Okay, so if I were in your position, I would start carefully testing short form 2 to 3 minute videos on YouTube.

Peter Lobanov (00:46:38) - There you go.

Jasmine Star (00:46:38) - Shut up.

Jasmine Star (00:46:39) - Yes.

Peter Lobanov (00:46:40) - But we're already doing this with, 32nd animations. Right? But was.

Jasmine Star (00:46:44) - Voice associated?

Peter Lobanov (00:46:45) - The voice was not associated.

Jasmine Star (00:46:46) - Are you going to introduce it?

Peter Lobanov (00:46:48) - It's I think I think the safest bet is to go some sort of physical copy first or some sort of digital place. So we're over.

Jasmine Star (00:46:56) - I'm gonna be very interested to see how that plays out on you. Yes, I'm going to be very interested.

Peter Lobanov (00:47:00) - So YouTube is a different audience too. Yeah. So I'll tell you this one thing as well. When you think like, who's pudgy Penguins core audience, there's a huge question mark for us. Walmarts question mark. You know, anybody who's following pudgy penguins for a while has always questioned like, oh, so this is for kids. And the thing about that is, like, it's always easy to age down. It's not easy to age up. So if we were ever going to pigeonhole ourselves like we didn't want to be pigeonholed into a children's category.

Peter Lobanov (00:47:28) - Why? Because of our Web3 community, right? It's we would have created a huge degree of separation. And so what we have to do is lean into those existing strengths, right? Okay. Some of that was creating content on platforms that had a little bit of an older audience. Instagram does not attract a younger audience below 1617 I mean, if you think about it like they don't, you could be 11 years old and on Instagram, but children's category, the audience lives on YouTube. Kids. Yeah, so we could have launched on YouTube kids and been pigeonholed into a children's brand. But no, we decided to go with relationship humor, relatable, social sharing content, right? That just at least gets you familiar with the Penguin IP and eventually, you know, dive into story. So it was really important for us to identify that core audience. And so our primary audience is young adults and collectors, right. Because the NFT ecosystem is full of collectors, young adults live on Instagram. You know, we're all young adults here.

Peter Lobanov (00:48:22) - And so, you know, for us, it was important for us to create something that somebody like myself would engage with. Right. And then convince my younger sibling, like, hey, here's a cute penguin. When you grow up, you can get an NFT, right? When you grow up, you can, you know, consume X, Y, and Z content that we produce that maybe may not be for you because, like, you're just not programmed to understand this, right? You're a young kid. You're not in a relationship. Right? We're producing relationship humor. Right. So the next step for us is to lean into our second, like our inherited IP that we also bought, which was just called little puppies. So the little little version, they're about half the size. And so we're going to start building that IP a little bit more aggressively now because it was an inherited part of the acquisition. And so now we're like all right how do we how do we start attracting that younger demographic.

Peter Lobanov (00:49:12) - And so part of that is creating a wider gap of of of a content style. Right. So something that like an old man can can watch and like a toddler and basically like engage with it. Right. And where are we going to distribute this. We're first going to start off with YouTube kids. At least that's my strategy putting voices behind them. You know, I think kind of boxes us in a little bit. I'm worried that if we start putting voices behind it, but we've we've kind of already. Flawed and we toyed with like the official voices and the tone of the penguins. Like, what? Kind of like what level of rasping this does pudgy have? You know, how high of a pitch does peaches have? Which are some some other characters in the ecosystem? So yes, we are. It's voices moving into their voices. Do it right.

Jasmine Star (00:49:54) - I think of my four year old daughter, and when I think of her watching YouTube kids, words wouldn't hit. Yeah. And I do think that she's fascinated with what I here's the thing.

Jasmine Star (00:50:05) - What is a genderless voice sound like? How do we even describe it? But when I watch the characters who like a super resonant. Yeah, it's like it's not a boy. It's not a girl. It's like it's a cute voice, the cute voice. And I'm like, you guys could totally listen to it.

Peter Lobanov (00:50:18) - It's very. It's not easy. No. Get this done. No, it's a lot of tests. But let me.

Jasmine Star (00:50:22) - Tell you, nothing that you have spoken about has been easy. And so I'm just like, yeah, it's not easy, but you don't do easy. So there you go. Like in alignment. I am so fascinated. I mean, look, we've been talking a full hour. I feel like I've been talking five minutes. I'm absolutely enamored. I freaking love your brain. I love the fact that you leverage creativity through an entrepreneur's perspective. That is a skill set. That's really rare. I wanted the audience to know you, but more than anything, it's not you, it's the story.

Jasmine Star (00:50:54) - And so I'm going to come back and I'm going to talk about how I see all of this playing out for entrepreneurs, getting in to a business where people had said, I'm not sure it's a business, and then proving it's possible and it's not by your own sheer will, but by leveraging the power and the insight of a community. When you have people who are speaking into the future iterations, you meet them where they are turning people from fans into evangelists. On the back of doing that, they take in a lot of consideration from an entrepreneurial perspective and saying, we need to get legal in order. We need to figure out how to do licensing. Then we need to leverage and ask ourselves, is licensing actually the best next move for where the project is, all the while consistently communicating back to the community, which ended up being the driving force. They went to Walmart. Walmart said no, they go to community, take it to Amazon. Blows everybody's dang mind, which then they're able to leverage and take it into now well over thousands of stores nationwide.

Jasmine Star (00:51:51) - Next big opportunity. What do we do to create the extended IP? They take it to social and start testing ideas again and again. I am so excited, not just for what Pendleton's is going to do, but taking this exact pathology and you apply it to your business and saying, I'm going to do the seemingly impossible and I'm going to apply an entrepreneur's perspective. So where everybody says, no, I see opportunity. I want to thank you, Peter, for being here. Where do they go to learn more about the project? Where do they go to watch these cute, adorable shorts? Where are we sending people?

Peter Lobanov (00:52:26) - Yeah, so.

Peter Lobanov (00:52:27) - If you're on Instagram or on Twitter, sharks, you can find Pudgy penguins at Pudgy Penguins. I highly encourage you to follow us on Instagram, Twitter, YouTube. Definitely go to your nearest Walmart and Target. Pick up a cute pudgy penguin. Go through the unboxing experience to to see what the future of Pudgy World looks like. And if you're an entrepreneur following our entrepreneurship journey, we're very active on social media.

Peter Lobanov (00:52:50) - We, you know, have always kind of voiced our story, our public story and who we are. But now we want to focus on the pudgy penguins story. But if you want to follow our journey, we actually do these amazing, super entertaining short episodes on YouTube. It's called Building in Public and we basically document our entire journey of building pudgy penguins. So we've pretty much documented since we've acquired Pudgy penguins and you'll see, you know, years full of content. We break them down into eight minute episodes, about 12 episodes that were alive. We're greenlighting season two now, and so you can look that up on Twitter or just follow Luca Nets on YouTube to find that YouTube channel and you'll see us building.

Jasmine Star (00:53:26) - That's amazing.

Jasmine Star (00:53:27) - Thank you.

Peter Lobanov (00:53:28) - Thank you for having me on.

Jasmine Star (00:53:28) - Thank you, thank you, thank you, thank you.

Jasmine Star (00:53:31) - I feel so lucky. I feel blessed that I get to enter in this juncture of an entrepreneur's journey and very selfishly, when I get to map to the brilliance that is Peter, I'm like, hey girl, you got it in you.

Jasmine Star (00:53:44) - Let's go. I want to say thank you for listening and watching the Jasmin Star Show. And wherever you are in your journey, may you take a know or when you take a seemingly impossible situation and turn it into a yes, because that is what you are made of as an entrepreneur. Thanks again.