← The Bitcoin Treasuries Podcast with Tim Kotzman
The Bitcoin Treasuries Podcast with Tim Kotzman
Building Bitcoin Treasuries in Britain with Andrew Webley & Jesse Myers of Smarter Web Company
00:16:46
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- [00:00]
A
Welcome back to the Bitcoin Treasuries podcast. I'm Tim Kotsman. I'm here with Andrew Webley and Jesse Myers of Smarter Web Company. Gentlemen, thanks for joining us today.
- [00:09]
B
Thanks for having us, Tim.
- [00:11]
C
Pleasure to be with you.
- [00:12]
A
Pleasure to have both of you. Andrew, I thought maybe this would be a great time, while we have lots of announcements and lots of price action, to maybe step back a little bit to the beginning. I don't know if you want to go all the way back to your childhood, but a little bit about where you grew up and your experience before starting Smarter Web. Your journey to Bitcoin, things that build the story a little bit for us.
- [00:44]
C
Yeah, sure. So probably a good place to start is when I started my career. I started working in 1999, it was just before the dot com crash. And I joined a very small company that became a very big company that's called Hargreaves Lansdowne, which is the biggest retail broker in the UK. I left there after 10 years and I was their head of online. So if you visit their website today or you are a client of theirs, you'll touch something that I had a hand in building. I'm still a client of theirs and I quite, quite like seeing that still. When I left hl, I had always wanted to run my own business. So because I'm a developer, I set up the Smarter Web Co. 16 years ago. The concept was really, really simple. And that was that we would build a system that would let us build websites for clients. So we do it all remotely. You know, I've met such a small number of our clients in person over these years. We've delivered it all online. You know, way before it was trendy to do stuff online because of COVID and such things. And then almost 10 years ago, I found Bitcoin and I thought it was an interesting volatile, maybe store of value, maybe something you trade, maybe something you use as a medium of exchange. But it wasn't until Michael Saylor came out with his Bitcoin strategy that I realized that the ultimate model was a public company and Bitcoin smashing the two things together. And that's what really did it for me. I was lucky enough, I suppose, to have the time to look for a company in the UK that I could invest in. I spent two, three years trying to find a company like Strategy in the uk. I still hold Strategy shares today, but. But I wanted a UK version of it because, you know, I live in the uk, my kids live in the uk. I I love the uk, but, but I wanted us to have our own version of strategy, but I couldn't find one. So about 18 months ago I thought, well, if no one else is going to have, have a UK version of strategy, then I'll do it. I'll list my business on the stock market and pursue a Treasury strategy that I believe in. So that's what we did on the 25th of April, which is approximately 10 months ago. We listed our business on something that's called the Aquis Exchange. It's the Junior Exchange in the uk. The reason why I did that was that it was quicker and cheaper. So I don't know whether many people watching have ever listed a business, but it's quite expensive to list a business even on a small exchange in uk. So as a small business, which is what the smarter web company was at that point, you know, there was quite a lot of risk and quite a lot of cost to that. Everyone told me at the time that it wouldn't work and I, I said, you know, this is ridiculous, you know, look at strategy, look at Meta Planet, you know, because Meta Planet was around by that point and, and, and we're just going to emulate that model. But, you know, we pushed on, we did it, we involved retail shareholders right at the start. And then over 10 months, we've grown to be one of the biggest bitcoin treasury companies in the world, with the 29th biggest in the world. We're by far the biggest in the uk. And then a couple of weeks ago, we listed on the London Stock Exchange, which is one of the best capital markets in the world. A lot of work went into that and we can touch on that later. But that's me and that's my journey.
- [04:49]
A
Awesome. Jesse, could you give us a little bit of your background, your journey to bitcoin and your journey to however you met Andrew?
- [04:59]
B
Yeah, yeah. Well, I was born and raised in Pasadena, California, came out to Texas, got a degree in accounting, went into management consulting at Bain Co. And that led me to getting an MBA at Stanford. So kind of, as I would later write about, kind of your yuppie elite track, the ivory tower, if you will, and thought I had been trained in money and value and the world of finance to an extent. And then when I was at Stanford, stumbled into Ethereum, really, There were a few people who were buzzing about Ethereum and that kind of led me into the whole altcoin universe. 2016, 2017, that was great. And then in 2018, that all got murdered compared to bitcoin. And that forced me to try to figure out what was I missing. Why did I get this so wrong? I thought this was all about technology and that new altcoins had better technology and they would eat market share from bitcoin, the old dinosaur. When you then start to really dig into why is bitcoin winning and you seriously consider the bitcoin maximalist content out there, you realize that there's a whole deeper level of the rabbit hole. And this isn't about technology, it's all about money. And in fact, the history of money and Austrian economics is all about increasingly scarce assets winning out over less scarce assets. And then bitcoin is this digital perfection of scarcity and what makes gold a compelling asset. So bitcoin is a perfection, a digital perfection of gold. And that especially the sort of coup de grace was reading the bitcoin standard and safe is not very kind to the world that I had come from. But damn it, he was right and that was a tough pill to swallow. And from that point on, I kind of committed myself to bitcoin and became a content creator, creator in bitcoin, putting out analysis and writing about bitcoin. Some of those pieces became fairly popular. And little did I know I was on the radar of Michael Saylor. And so when I put out my perspective on how to think about the full potential valuation of bitcoin within the global asset landscape and its place in that context, Saylor loved that and pretty quickly adopted that as his framework. How he approaches thinking about how valuable bitcoin will be in the future, culminating in that Bitcoin24 model of $13 million per Bitcoin in 20 years. That that's where that came from. That kind of pulled me in to the bitcoin treasury landscape a little bit. And then it was kind of a combination of a few conversations with Saylor and then with Dylan Leclair that shifted my thinking away from cold storage bitcoin only to cold storage plus risk asset bitcoin. There's a place for risk in your bitcoin portfolio still. So, yeah, a few conversations with Saylor and more with Dylan leclerc as he was really getting going with metaplanet opened my eyes to this is the next big chapter for bitcoin, its maturation as an asset. I think that we will look back at this as kind of the demarcation point for bitcoin. There's going to be before treasury companies and after treasury companies, and I think it's going to be quite stark that the treasury companies are the accelerant for Bitcoin becoming incorporated into the tradfi landscape and global fabric of capital. I got pretty excited about this time a year ago was putting out analysis about Bitcoin treasury companies and the model there and then I was excited about what's the next Meta Planet and I very much wanted to meet Andrew as he was quickly executing on this brand new treasury company in the uk. Happened to be in Vegas for the Bitcoin conference and off to my very first event for that week stepped onto an escalator and the person who stepped on behind me was Andrew. And so we started talking then and pretty quickly figured out that we work well together and I got more and more excited about what I see as the biggest opportunity in the world that has not yet been, as of a year ago, the biggest opportunity in the world that had not yet been explored in terms of capital markets. The US and Japan as of a year ago already had their leaders with strategy and Meta Planet and the UK is the second most important capital market in the world and it's the legacy of the British Empire. A huge amount of global banking and capital intermediation happens in London. My thesis is that there's going to be a winning Bitcoin treasury company in every capital market in the world and the opportunity to work with Andrew and help advance the lead of the leading Bitcoin treasury company in the second most important capital market in the world was a dream come true.
- [11:45]
A
Appreciate that background. I had the opportunity to moderate a Digital Asset treasury panel recently at the Digital Assets at Duke conference. And as myself and Ben Workman and Katherine Dowling and Jess went up on stage, one of the hosts of the conference said, all right, now we're going to talk about digital Asset treasury companies and whether they're still going to exist in a few months. So that was our warm introduction and I don't know if it's, you know, that person's viewpoint or the recent volatility, but all of this to ask both of you. Were there a few things that early on that stand out to you now that are top of mind as to what gave you the conviction of this is the next industry, this is the next step. Because for years and years and years it was just microstrategy and then even when others joined, it seems like from what you both just said at that point it was probably just strategy. Semor Scientific Meta Planet.
- [13:10]
B
Yeah, it's hard to remember just a few years ago everyone would talk about, well yeah, microstrategy can do that playbook, but that's because they're a billion dollar software company spitting off cash flows. Nobody else follow that playbook. And then of course, Meta Planet did it, and it started from a $10 million market cap base and pivoted from hotels into this. And it works. And then that opened the floodgates. But we shouldn't be surprised. Bitcoin is for everyone. Bitcoin's for every individual company and government. And it's a tailwind that you can opt into or not. Right. Like our view, all three of us, is that Bitcoin is monetizing as an asset. It's still quite new in the grand scheme, and it's going to take its place in the global asset landscape. And it's currently 0.2% of global asset value. I don't think it stops there. So I think that this is a rising tide that benefits all individual holders and corporate holders of bitcoin. So this is bound to happen everywhere and with every company to some extent over time. But I think it was metaplanet just kind of showing that it was possible to run this playbook from nothing. That made everybody who wished they were at the helm of a microstrategy, but knew they weren't, all those people then thought, well, actually, if you can do it from effectively scratch, then maybe it's time to try.
- [14:55]
C
I agree with that. And then also, if I think about what I was looking for when I couldn't find a company doing what we've done so far and will continue to do in the future, it's a company that believes in transparency, a company that believes in putting shareholders first. You know, everything that we've done, you know, since the start, we've been as transparent as you can be as a public company. You know, we've put shareholders, you know, first and foremost in every decision that we make. You know, when we, we're having internal meetings, we always talk about what this would mean for the shareholders. So we've done it that way. And then if you look at, you know, what is a business at the end of the day? Well, a business is something that's trying to earn a return for its shareholders. If you believe in Bitcoin like we do, you believe probably that for the next few decades, bitcoin's going to average, let's say, 30% a year. And then you think about that in the concept of a business. So how are you going to get a 30% return every single year for your business by selling whatever it is that you do or providing whatever service that you do. So if you think about it in really simple terms, it's the best business model you can get because it's going to outperform whatever anyone can do over a longer time period. So I think you probably need to think about it in, in that context. And, and, and, and, and, and it's as simple as that, really.
- [16:30]
A
Do you guys see, through conversations, other emerging companies in your jurisdiction, or is it one of those things where.