Andrew Pelekis, CEO – Claynosaurz

Our guest this week is Andrew Pelekis, CEO of Claynosaurz. Claynosaurz is more than an NFT project, it's a 3D production studio full of artists from Sony, Disney, Dreamworks, Ubisoft, Netflix, Warner Bros, Marvel, Industrial Light & Magic focusing on developing quality entertainment IP in Web3. Andrew sits down with Brian Friel to discuss the entire Claynosaurz ecosystem, building entertainment IP in Web3, the importance of quality in NFT projects, and the future of Claynosaurz which includes collectibles, toys, and content.   Show Notes: 0:50 - Background / starting in Web3 and a little bit about your background                         3:30 - How did Claynosaurz start? 5:47 - Web3 vs.Web2 entertainment                         12:03 - Why Solana? 14:10 - Engaging with the community 18:34 - Learning how to build strong IP native to the internet 20:03 - Who will be spearheading the future NFTs?   22:44 - Future projects for Claynosaurz 25:04 - A builder he admires in the Solana ecosystem   Full Transcript: Brian Friel (00:05): Hey everyone and welcome to The Zeitgeist, the show where we highlight the founders, developers, and designers who are pushing the Web3 space forward. I'm Brian Friel, developer relations at Phantom, and I'm super excited to introduce our guest, Andrew Pelekis, the CEO at Claynosaurz. Claynosaurz is a 3D production studio, building original IP in Web3. Andrew, welcome to the show.   Andrew Pelekis (00:27): Hey, Brian. Thanks for having me.   Brian Friel (00:29): Really excited to talk to you today. I'm a huge fan of what you guys have built. I know that there's a lot of listeners that are obsessed with the dinosaur NFTs you guys have created, and they are a clear winner of the cutest NFTs on Solana right now. We have a lot to jump into, but before we get into everything related to Claynosaurz, I'd love to know a little bit about you. Tell us where you got started in Web3 and a little bit about your background.   Andrew Pelekis (00:50): Sure. So my background is probably a little bit more different than anyone else on our team, which is all geared towards creative and creating the cute characters that you're so familiar with. I come from a background in front office investments, so that's hedge funds and private equity style investment. I've done that for a little over 10 years. Most recently, two partners and I raised $250 million under a private equity umbrella fund and invested that over four years twice, so did a little under $500 million of business. We left that job, or I left that job in 2021 to pursue my own endeavors. Part of that and part of what I was doing earlier that is Web3 geared was working on attaching inventory and collateralized assets using NFTs or tokenizing those types of assets. And I had been working on that loosely in Eastern Europe, but we did a lot of work and a lot of background work on Web3 and all the different aspects of smart contracts, blockchain, and applying those things to real assets.   (01:55): And in that pursuit, recognized there's a ton of opportunity here, a ton of great use cases. And along that path, I was advising Claynosaurz from afar for about a year before they got to mint. And realized that once they minted, they needed some help on the stuff that I'm an expert in. And I thought there was a lot of opportunity in that, especially when you consider how early on we are in the life cycle, thinking on about what I was doing in my previous job, that is to say attaching real assets via tokens. I think we're going to get there, but there's a great opportunity in the low-hanging fruit that exists in digital assets where the use case is much more applicable for the time being, and therefore a ton of use cases in the entertainment sector in particular. So jumped onto Claynosaurz late 2022, literally hours after the mint I was talking to those guys, and then the very next week, jumping in headfirst.   Brian Friel (02:50): Oh, that's awesome. It's a unique perspective too. I think you're the first NFT CEO I should say, who comes from a professional investment, more institutional side background. I actually, myself used to work at a [inaudible 00:03:02] before I joined Phantom, and I know that that world doesn't always mesh super well with the NFT world. So you bring a pretty unique perspective to how this whole industry is shaping. But going a little bit back in time, you said you joined the team November, 2022, right around the mint. How did the Clayno team originally start? What was the vision that they got set out to do and who did they build this team with? You guys have some incredible assets. I imagine that you guys have quite a wealth of experience to have put all that stuff together.   Andrew Pelekis (03:31): Yeah, there's actually somewhere around a dozen founders because of the amount of work it takes to develop this 3D quality asset that we're developing. So it starts though with Nick and Dan, who are our two founders who began developing the IP with, I wouldn't say no objective in mind, but they didn't necessarily solve for distribution, right? This is a creative team who had a ton of great ideas and just said, "Hey, let's start developing them. Let's just start building IP. And people do that, they develop IP and they maybe curate and sell it to a big studio. And this is in a world in which there's no opportunity in NFTs or Web3, right? So that's a traditional path and it's quite long and laborious and a lot of late nights working with no real idea of how you're succeeding or if you're succeeding at all. And along that path, a few months later, NFTs started to blow up.   (04:22): So this is early 2022, late 2021, the news starts picking up on NFTs. I mean, I think everyone listening will be familiar with that news cycle, and they picked up on that. Some close friends of theirs who were well acquainted with business development and marketing and Web3, basically approached them and said, "Hey, this is a great project. Why don't you test that product you're building in Web3? Why don't you curate this to be an NFT collection? And you can still build the IP beyond that once you've done that, but at least you can test early on in the life cycle. You can monetize the product before you normally would be able to and get all this active feedback."   (05:00): And so in early 2022, I believe February, they brought on this business development team, expanded the creative team to get to this objective, which was a mint, and built from there. And eventually minted in November 2022.   Brian Friel (05:15): That's awesome. I think a lot of people might not be familiar with that grind. The traditional, you're a creative team, you're coming from the works of Sony, Disney, Dreamworks, you want to set out on your own adventure and how do you actually take the creative ideas you have and get distribution, like you say, turn that into reality? Can you talk a little bit more about the approach that you guys are doing, building entertainment IP in Web3 and just how that differs from those traditional approaches, what those cycles are like and some of your guys' strategy in Web3 in particular?   Andrew Pelekis (05:46): Yeah, for sure. So I think the main thing is sort of what I just touched on, which is that typically you would have to build a product to a minimum point at which you could sell it to someone. And in that environment, that minimum point with a team of, by example, our team of 12 to 14 people, if you include contractors, it's a little bit bigger, but it's a small team compared to a studio that might have hundreds or thousands of people, it takes a while to get there. And then if you've got success, if you've built something that's worthwhile to these studios, then they'll participate, right? They'll say, "Okay, well..." But that deal does not look very good because you haven't proven the product beyond this one meeting, and getting that meeting might be tough in the first place. So you sort of get taken to the bank, if you will.   (06:30): In the environment that Web3 offers, you can test the product early on in the lifecycle. So by example, we had, like I said, a dozen or so people working on our product for about a year to get to this MVP that was in November 2022, and you're testing the product, right? Because that mint tells you, are people interested? What's the feedback like? Are we able to sell this product? So you have all this great testing environment. And then of course, as you know, crypto Twitter is very active in telling you what you are doing right and what you are doing wrong, and you get this great feedback loop. And so you get all of these things that are going on that typically would never arise at all in a traditional environment. And the only time at which it would arise would be long after you've given up the ability to creatively control your own product. You'd have given it up to a studio at some point and struck a deal and been put to the side.   Brian Friel (07:26): Yeah, it almost seems like a total win-win because it's like you're getting these faster product development cycles. Like you said, you're getting in the hands of the users, you're figuring out really fast if this is worth investing in long term or not, but you're also getting more control of your own destiny. You don't have to grind for years and then take whatever deal comes your way. You're cutting out some of these middle men just going directly to these consumers. It's pretty cool.   (07:47): So let's change a little bit and talk about the ecosystem that you guys have built out today. So like I said at the start, everyone remembers, I think, the mint that happened in November 2022. It was a time that I think working at Phantom, you would see a ton of these profile picture collection NFTs, where it's these static images, looking the same. And then all of a sudden, it was like a breath of fresh air seeing these fully animated, smiling dinosaurs, wacky craziness. I think you guys definitely stood out. Talk a little bit about everything that exists in the Claynosaurz ecosystem today.   Andrew Pelekis (08:20): So there's a lot that exists today, but I would say that everything is complimentary. These are not supplementary things. So the first and most important thing is our Genesis collection. So that is the Claynosaurz collection, that is the characters we're describing. There's six species inside of that collection, and I think everyone understands those. Beyond that, we've also got a few items that exist. And so these are things that we did as a guerilla marketing effect at a number of Web3 events over the last six, seven months. Actually, the first one took place before our mint, which was the Sardinhas, which we dropped in Breakpoint Lisbon in early November 2022. And those turned into Pterodactyls now. And so those holders who were sort of pro-Clayno before we minted, they got rewarded with this very unique species that is only a set of 222. Actually, we've got that mechanism now, that kind of is a good way to explain some of the other items, which is the Claymaker and the clay, which we airdropped to all the holders I believe December and January.   (09:21): And the Claymaker and the clay are again parts of our world that we would use to develop the product further. So the Claynosaur is the character, the Claymaker is something of a transmuter. So just like a kid playing with clay, you've got different toys that you can use to mold your clay. So the Claymaker is this all-encompassing molder, if you will. And then the clay is the stuff you mold. It's the resource which we use to mold things. To get from the Sardinha to the Pterodactyl. We have on our website, you burn the Sardinha with the Claymaker and the clay to create an egg. And then again, you take the egg and you burn that into the Pterodactyl. And so that explains the Claymaker and the clay, and those items will be used in perpetuity in our world.   (10:05): Clay is going to be a resource that continues to be used, and the Claymaker will be something that is required to transmute these different objects or to mold these different items in our game. And then you've got other similar drops that we did. In Paris, we did the croissant, NFT Paris. In LA, we did the taco. And most recently, in New York we've done the pizza slice. And all of these things are going to be items or companions that accompany your character. So the croissant will be an item that you can put on top of your Claynosaur. The taco will similarly be an item with a similar utility. And the pizza slice is going to be a companion that will sort of follow your Claynosaur around. So all of these things are different ways to make your Claynosaur ever more unique for the user, to make it more of your own. And so they're complimentary, right? They're not supplementary.   (10:58): Lastly, and I know I'm going through a lot of things here, we've got the most recent collection, which is the Call of Saga collection.   Brian Friel (11:05): That's right.   Andrew Pelekis (11:05): That's being minted on the new Solana Mobile Phone, and that's a really cool initiative. That will be a collection of Claynos. It's not part of the Genesis collection. Think of it as an expansion pack. New collection, two new species. And that's going to be exclusive to the Solana Mobile Phone. Obviously, once you mint it on the phone, you can then trade it and everyone can participate.   Brian Friel (11:28): Yeah, I'm excited for that. I personally just got my Saga, I think two days ago, right before we're recording this in May 2023. So I got my Genesis sticker, now I'm in line for the mint. I can't wait for that. I'll be a lot of fun.   Andrew Pelekis (11:40): Very cool.   Brian Friel (11:40): That might be a good segue too, to talk a little bit about Solana more broadly. You kicked all this off November 2022. At that time, it was probably not the most mainstream bet to bet on Solana as an NFT ecosystem, but I think you and I both know that Solana has a lot of upside that I think a lot of people maybe aren't aware of. What in particular drew you guys to Solana?   Andrew Pelekis (12:03): I think it's two things. The two main things are that you have to have a good transaction time, like reliable transaction time, so that when you click a button, something happens right away. I think there's research that shows that even more than one second, the user can kind of feel this lag. And the second one is a reliable transaction cost, so that there isn't an immense amount of cost to the user, so that they can freely click on things as they participate in our world.   (12:29): And all of that goes layer backwards, which is that we're building IP. Part of building IP is building an experience that people enjoy. And for us it was very important that if we're going to expand in this web three direction. And if you're bullish on Web3 in general, you've got to be on a chain or on this platform that offers this resource in such a way that allows the entertainment not to feel laborious, right? It's got to feel seamless.   (12:57): And so that decision was made actually before my time, which I absolutely support and I think is the correct decision, to be on Solana because you need to have that seamless entertainment experience. And I think that's where it comes from. That's the most important thing for us. And keeping in mind that we're trying to build an IP that is built on Web3, continues to build on this Web3 channel, but permeates into all of these other traditional distribution channels. And if you fast-forward 3, 4, 5 years from now, you'll probably find that the chains that succeed are the ones that are able to bring the most frictionless experience to the users, right?   Brian Friel (13:31): Absolutely. And I think a lot of that also kind of dovetails to what you were mentioning earlier about these in-person events. You guys are giving these activations to your community live and they can use these complimentary NFTs, the croissants, the tacos that you mentioned, interact with them. It probably builds deeper relationships with these collectibles that they have. Can you talk a little bit about that strategy? I think you guys are doing a lot of unique things both on the in-person event side, but also on your guys' social media presence. Like you said, crypto Twitter, it's very active. I think you guys have a pretty amazing social media presence there. Does this all tie in together into a broader strategy? And if so, what are you guys working towards when engaging with a community like that?   Andrew Pelekis (14:11): Yeah, this does definitely tie into a broader strategy. To talk about that strategy very quickly. Our view is that in 2023, and probably for the last five to 10 years, entertainment has shifted so drastically onto so many different formats and so many different places, where I'm sitting in front of a few screens right now, I've got my phone, I used to have two or three phones actually, and I'm sure people still have that today, and then you've got your TV and people watch all kinds of different things. And then on these computer screens, you've also got all kinds of platforms on which you can participate in.   (14:44): So our view is an entertainment experience in 2023 and going forward has to have a very holistic approach, such that the user is able to see you in all these different places. And Twitter is one of those places, especially if you're in Web3, I think Twitter is definitely the right place to start. And so our approach to Twitter was, well, instead of just being this microphone to announce the big things that the traditional studio PR team would do, we can make this an engaging form of entertainment that speaks to our brand, that speaks to Web3, and is able to also engage the community on an ongoing basis.   (15:23): And so we have a team that works on Twitter, headed by one of our founders, and he does most of the Twitter posting over the last year, year and a half, but it's a dedicated job for us. We take it very seriously. Similarly, we spoke about all these different items and things like that that go inside of this gamified experience. That's a whole other tangent that we think is a great place to distribute, where we think that there's a whole opportunity in building that out. And then across the content strategy, you've got, again, a lot of distribution channels in that there's micro short form if you will. We call those the two to five-second little vignettes you see on TikTok or YouTube Shorts or Instagram Reels. There's a big market in that.   (16:03): Then you've got short-form, call it trailer-length video, which is one to two minutes, and you could tell a story in that time, but it's not a whole story. And I think a lot of that stuff often lives on YouTube and there's other platforms that are similar to that. And then you've got what's more traditional, you've got 20 plus minute shows or a movie at length, and there's a whole slug of opportunities in there as well. So our content strategy is to permeate across all these different avenues, such that a user can enjoy and sort of familiarize themselves with Claynosaurz regardless of where they are.   (16:38): And now the last bridge to cross, which is interesting because you would think it's the most obvious one, is the one you touched on with the booster packs and all these activations in-person at these different events. And our view is that there is going to be, and I think we're working on it and trying to push the boundaries on this as much as we can with the resources that we have, especially those that are on Solana, is to bridge the gap between the physical and the digital. So the packs that we were doing in LA and York were sort of an homage to those Yu-Gi-Oh or Pokemon packs where you rip it open, you don't know what you're going to get, and there's this real sense of excitement in that. So we wanted to bring that feeling to these events in-person, and we also wanted to use that as a onboarding for people who aren't familiar with Claynosaurz yet.   (17:22): So now, you've got this feeling of excitement and now you have a simple interaction with your phone, where you tap the card on your phone and you have these NFTs. And so what we were trying to do is physically onboard people, bridge this physical digital gap, and we're going to continue pushing in that direction on the physical side as well. So that's one of many legs to this larger content strategy.   Brian Friel (17:43): I think you're painting this really awesome picture of the future. Because I keep going back to this tweet in my mind where Annatoli tweeted where he said, "Claynosaurz is building the next Disney." And in my head, I think of the early days of Disney, like Mickey Mouse on his steamboat, and how it was just this total game of distribution. You had movies going out, the whole country would watch the same movie, and everyone saw the same experience. And this world you're painting here is almost turning everything on its head. It's like now you guys can go out, strike your own destiny without having to set up these massive distribution lines. And it permeates everything. It's Twitter, it's YouTube, it's in-person events as well, these activations. It's an exciting world and it seems like it could go a lot of different directions from here.   (18:23): If you had to speak to other NFT projects right now, with everything that you guys have learned so far, what kind of learnings would you share about building strong IP that's native to the internet?   Andrew Pelekis (18:35): Quality has to come first. I think that's the most important thing. And what's important about that is that we're at a point where Web3, and NFT products in particular, get a lot of slack. Regular media, traditional media, whether that be the newspaper or just on other platforms, they're not taking us seriously. And I think a lot of that has to do with quality. Because you can say things like you're going to be the next Disney, but if you put up a picture of one NFT and then a Disney product and the two are obviously different, you're really making a tough argument because this is a product that goes to consumers. We're all consumers, so everybody can understand this. There's nobody that doesn't understand this. The quality speaks for itself.   (19:17): So the most important thing I think at this stage, now that we're past the early days of NFTs, I'd say, where you're just sort of testing how this will work, and perhaps you're not going to invest time or money in developing and curating IP at this level, I think we're past that. And I think it's important now that focus on quality is of the utmost importance, right? Because you've got to get there and be able to compare Web3 entertainment products to traditional or Web2 entertainment products, because otherwise you're never going to onboard anybody.   Brian Friel (19:50): Do you see a world where these traditional players, like a Disney, make their own NFT collection in the short term? Or do you think it will be mostly spearheaded by projects like Claynosaurz that are really pushing the envelope? How much do you see that those [inaudible 00:20:02] going in the next couple of years?   Andrew Pelekis (20:03): I think Disney probably has a lot on his plate. I think a lot of studios are probably stuck in traditional models, but let's not be silly either. These are massive institutions that have been here for, in some cases, dozens and dozens of years. They've got the brand power and they've got the resources to make a good push into Web3 when and if they wanted to. And I think what they're lacking perhaps is an understanding of the community that exists in Web3 and how to interact and market in Web3. And so you sort of touched on it earlier, where you mentioned Disney back in the early days, everyone went and watched Disney because they had solved for distribution.   (20:45): And that was a world in which distribution was super expensive. You could not distribute anything yourself as an artist, whether that was music or a movie or whatever the case may be. And so a big company like Disney is able to distribute and the consumer eats it because there's no competition. And I would say even up until maybe 15 years ago, streaming was not at the level it's at today, and distribution had just been solved in the last 10 to 15 years. Where 15 years ago, we weren't going through all these different streaming channels trying to find things, and there wasn't all these different opportunities for the consumer to look at things.   (21:24): So I think that a lot of these big studios are stuck where they're like, "Well, our oligopolistic framework in which we control distribution no longer exists." And now they're sort of lost in this world where everyone can distribute. You and I are doing a podcast right now, this was not possible 30 years ago. And they don't know how to market in that environment, but they do have the resources to do this quickly if they wanted to. But it's that understanding of marketing and that holistic experience that I think they haven't solved for yet.   Brian Friel (21:53): Yeah, I agree. It's crazy to think back too, like you said, the streaming is a great example. You're watching your favorite TV show this week. You take it for granted that you can just peruse Netflix or Hulu or Amazon Prime Video and all this stuff, but it was not that long ago where you didn't have any of those options. And like you said, you just consume whatever was given to you. You didn't have that choice. It's pretty cool to see that playing out in Web3 now too, or you can kind of sense that it's coming. And I'm hopeful that we'll have that same sort of aha moment in the future where we look back and say, "I can't believe that this was the way things were."   (22:24): We talked a lot about crypto Twitter in this episode. I think crypto Twitter would kill me if I didn't ask this question, so I have to ask it. But now that we've covered everything that Claynosaurz is up to, looking ahead, is there anything you can share with the fans in particular? Anything that maybe you guys haven't discussed publicly or things that your fans can be looking forward to from the Claynosaurz ecosystem?   Andrew Pelekis (22:44): Yeah, absolutely. So we're working on all these different tangents, and so all of those things are active. I would say one of the things we're doing first and foremost is developing our website. We need this to be a repository of all the things I've just described to you. So for those who are already active in the Claynosaurz community, there won't be anything new there necessarily. However, there will be this repository of information to onboard people and to bring people into the ecosystem. That's probably the least interesting of the things I'm going to say.   (23:10): So going beyond that, we're working on entertainment experience, which will also live on the website. This will be a gamified experience, where people can engage with their Claynosaurz, discover part of the Claynotopia land, figure out the lore as we develop into these different regions. And also, begin to accrue drops and different things in the game that they'll be able to itemize and make those Claynosaurz more unique. That's going to be, I think, a really fun addition to our Web3 track.   (23:39): I think on the other tracks, it's very important to note that we're starting to permeate into TikTok and into Instagram and into YouTube Shorts. That's low-hanging fruit for us, so we're going to get movement on that very soon, so look out for that. And I think probably the most exciting thing, at least for me the most exciting thing, is we're working on a few things in the merchandise realm. And if I go back to the very foundation of this company, the guys who developed this IP, their instinct from day one was, "These are going to be toys. These need to be toys." That's how they developed the IP, and that's what we've been working on for literally since day one, for over a year now, a year and a half.   (24:18): So we are now in talks with a number of different partners to help us develop collectibles, so think high-value collectibles that we will also integrate with a digital NFT angle. We are also working on toys, generally speaking, and then a whole merchandise store as well. So there's a whole bunch of physical additions coming to the Claynosaurz world.   Brian Friel (24:42): That's awesome. Keeping with the theme of pushing the boundaries both on the digital and in the in-person and the physical. I love it. Well, Andrew, this has been an awesome discussion, really exciting to talk to you and to hear your vision for how internet native IP is going to play out and everything that Claynosaurz is up to. One closing question that we ask all our guests, and I'd love to hear this from you, is who is a builder that you admire in the Solana ecosystem?   Andrew Pelekis (25:04): When I first got on, and this is going to sound perhaps odd, but I really admired what the guys are doing at Backpack. I think that they're solving for a lot of friction that currently exists between Web3 and everyone else. I think if that product develops in a way that they envision, it'll be a really big step forward for the entire Web3 community. So I admire them very much. And then I also have to give a big shout-out to Aurory because these guys are... They're Montreal native like we are. They're developing what I think to be a very high quality game on the Solana ecosystem, and I believe that it's a really good showcase of what's possible on Solana that may not necessarily be possible on other L1 chains.   Brian Friel (25:51): I love it. Two great answers. I agree. Great builders in the space, and I think you're not the first to shout out some of those people as well, so you're in good company there.   (25:59): Well, Andrew, this has been really awesome. Thanks so much for your time, for sharing your vision of Claynosaurz. Where can people go to learn more about Claynosaurz?   Andrew Pelekis (26:06): I would say right now you can go to @Claynosaurz on Twitter, you can go from there into our Discord where a lot of the particular information is, and we've got great mods who will help you out. And lastly, I would continue to go look at www.claynosaurz.com, where we will soon have a great website up and running, with all the information at your fingertips.   Brian Friel (26:28): Love it. Andrew Pelekis, the CEO of Claynosaurz. Thanks so much for your time.   Andrew Pelekis (26:32): Thank you, Brian. Thanks for having me.