Hey, Psych2Goers, welcome back to another video. First of all, we'd like to thank you for all of the support that you've given us. Psych2Go's mission is to make psychology and mental health more accessible to everyone. So let's begin. Have you ever found yourself in tough situations or faced difficult obstacles? In those times, you may start to question why it's happening to you or why life is being so unfair to you. While these are not necessarily bad questions, they may often lead to a lack of motivation, which may only make the situation more difficult. This is why it's important to ask yourself more empowering questions, questions that can help you reflect and become more self-aware so that you can build on your strengths and battle your weaknesses. Here are five questions to ask yourself during tough times. Number one, what can I be grateful for today? Do you sometimes find it hard to see the positive things in life? An important question to overcoming this boundary is to ask yourself, what can I be grateful for today?  Asking yourself what you can be grateful for can help spark that perseverance you need to break through the negative thought cycle you're stuck in. Number two, what is my gift to share? Have others tried to dismiss your dreams by saying that they're childish or silly? Listening to other people's opinions instead of your own may lead you to lose confidence in your own abilities. Even if you feel that you're bad at something, there's always a way to improve. By asking yourself what is your gift to share or what you can contribute to others, you may find that you've been neglecting a lifelong interest. Trying different hobbies and seeking opportunities may help you find a hidden gift or interest. Number three, what is my true goal and intention in life? We all want to be true to ourselves and follow our passions, but many people often forget about their goals when pursuing success. Maybe you are persisting for your family or it's to make a positive impact in the world or a dream job you're hoping to get. Asking yourself what is my true goal and intention in life can help clear your mind and reestablish what you really want to accomplish. Number four, how can I change my approach? Have you ever fallen into the trap of tunnel vision? Tunnel vision is when you're so focused on your preferred line of thought that you fail to consider alternatives. By asking the question, how can I change my approach? You're acknowledging that your current strategy is not working. The next step is seeking answers to your question. Is there a particular thing you need to improve on? Something you need to learn or switch up. By asking yourself about the other potential perspectives and approaches, not only are you improving yourself awareness, but you're also more likely to find success and fulfillment that way. And number five, what is trying to emerge in my life? Often during stressful and pressing times, it can be hard to figure out what direction life is trying to point you towards. Perhaps it's to follow a certain goal, a certain job, or a certain person. It may be hard to tell at first, so it's important to keep exploring with an open mind. By seeking opportunities to learn and experience new things, you can get a clear idea of what you want to achieve in life. Asking yourself, what is trying to emerge in my life? May help you pick up on previously unclear clues and hints that can guide you towards a brighter path. Have you tried asking yourself some of these questions? Tell us about it in the comments below. If you enjoyed this video, please like and share it with others who may find it helpful too. Don't forget to hit the subscribe button and the notification bell icon for more Psych2Go content. All the references used are also added in the description box below. Thank you for watching and we'll see you in our next video.


Hello everybody, there are probably as many definitions of marketing as there are people in the room So I wonder how you define it. I Had a pretty defining marketing moments about 11 years ago So picture the scene. I'm studying marketing and advertising at a college in Cape Town called red and yellow and The MD and the advertising agency called Sachi and Sachi comes to speak to us about branding He introduces the concept of love marks Love marks he explained were brands and products that people came to have an extraordinary loyalty towards They had this emotional connection towards them and he explained to us that when companies with strong brands were evaluated This brand equity actually it's amounted to kind of a financial asset So I was fascinated by this concept of love marks and I decided I wanted to learn more about them So at the time we had to choose a love mark of our own and tell a story about them So I chose Apple who remembers when kind of Apple was breaking out and you'd see people with the white headphones And if you didn't own an Apple device your heart would kind of race and you'd become rapidly envious. So that was me and I Had black headphones. I kind of despised these things and I wanted to be part of the Apple magic So Apple was a love mark of mine. I Finished my studies. I worked in advertising for a year I went on to work at an NGO and then I joined yappy chef as Carol mentioned So yappy chef was a small e-commerce startup I joined as the sixth hire by the time I left four years later We'd grown to a hundred and my years at yappy chef were particularly formative because we succeeded in turning yappy chef into one of these love marks And I'm not just saying that there was some kind of third-party verification of this So venture burn wrote an article about yappy chef and described our following our sort of brand following its cult like Which is a little bit creepy, but it was also quite a compliment So how did this happen? At yappy chef we really cared We cared about the products we sold We cared about our customers deeply We cared about one another the staff there was an incredible rapport between everyone who worked for yappy chef And this somehow translates into us creating this world that people felt the strong emotional connection towards So I'd worked there for four years and I was ready for a fresh challenge I moved to London and I joined a company called we themes About a week into working for we themes as a marketer It sort of slowly dawned on me that I joined quite a different world to what I was used to So I don't have any marketers in the room of kind of would relate to having this experience But the world of wordpress was very technical The products were digital so very different to what I'd been used to selling and people love data And the people who coded seemed to be the kings and queens and the people who were very lauded And so I found myself in this strange world and felt like a bit of an alien And I wondered what marketing was going to look like in this world And I was about to find out So I joined the routine That's us in Berlin last year It was a bit of a strange slash through the middle. I'm not quite sure what that is But um, yeah, the routine scaled quite a lot and that's a little bit of what I'm going to be sharing about This is our roadmap And before we dive into that just by show of hands, who's familiar with WooCommerce apart from all the branding that you've seen here Yay, that's very encouraging. So my job is done. No, it's not done Um, so WooCommerce is a plugin for wordpress. The way I describe it to my family Is that you just add it to wordpress and it sort of creates a shock for you So into the first learning learning to embrace change I don't know how you all feel about change by nature. I don't particularly like it In fact, I'd probably describe myself as change resistant as a person But um, it's something that I've had to learn to embrace working at Woo and even more so joining automatic So if you've been a part of the team that's scaled rapidly, you'll understand this So when I joined Woo, we were three. I was doing a typical mixed bag of marketing writing blog posts doing tweeting sending out some emails And that was great. I was a generalist. I was doing all sorts of bits and pieces and then we started growing So Nicole joined our team. She was great with content She was a great editor. Aviva joined our team. She was a data nerd She started asking difficult questions about ROI and why I did things certain ways Kevin joined our team. He was a performance marketer. He was great with sem So you think that this would be delightful, but actually I was horrified Um, I liked being a generalist. I liked controlling things. I liked our team being little And what was happening was I was being forced to embrace change So at the time I read an article which was really helpful which described this process as having to give away your Legos So if you've seen children playing or if you remember being a child playing with Lego and someone tried to take it away from you You didn't want to give it and that slightly high felt at the time But this this article Was really helpful. It said there's a unique feeling of ambiguity chaos and stress that comes with doubling or tripling your team every six months If you don't manage scaling proactively You can end up in trouble Who's been part of a business that is scaled quite rapidly again show of hands. Yeah, it can be a little bit uncomfortable So fortunately for us it was very well managed and huge kilos to Warren He was my manager at the time kind of steered us through this change very ably So Yeah, I was forced to kind of have a bit more of change experience when we was acquired So we was acquired by automatic in 2015 Fortunately, we were more like cousins than strangers in the sense that we was already remote Automatic was also remote. There were a lot of similarities and it was a great fit But it did require this flexibility and adapting So with change we have choices We can dig our heels in we cannot give away our Legos. We can make it difficult for people who are coming in We can believe that the best days are behind us and we can hark back to the golden days Or we can be willing to embrace change and see it as a bit of an adventure So that was one of the first lessons I learned John Mayday, who's sitting in the front row right over here Says that it's important to find the right balance of hope and realism Not becoming too gloomy about the future Or unrealistically optimistic about our current state I love this idea of balancing hope and realism when it comes to thinking about our products and what we're doing and even ourselves So here's a story about when I became a little bit too gloomy So the e-commerce landscape is quite competitive There are a lot of interesting players doing a lot of interesting things We're one of them, which is fun So WooCommerce comes with some challenges as a result of being open source, which this crowd will be familiar with Things like people adding strange extensions to their sites updating and their sites breaking Or small business owners feeling terrified of touching code and having to learn this thing of wordpress So it comes with some challenges But open source is also WooCommerce's greatest strength Our market positioning is that we're customizable But in being very focused on everything else that was going on around us at one stage I began I began to see Woo's openness as a weakness Now at this point I feel like maybe that the stage is going to open and I'm going to be swallowed into a pit Even saying that but but it's the truth. I began to feel Woo's openness was a bit of a weakness of ours um But yeah, this obviously was faulty thinking because it's actually the very thing that sets us apart The thing that people love about WooCommerce is that it's customizable. You can hook things into it It's what makes it really cool So now we're choosing to kind of lean into that I've reframed it in my head and the theme for our WooCommerce developers conference is open e-commerce So it just took a bit of reframing. So in this thing of balancing hope and hope and realism I wonder where you're at with your product or whatever it is that you're working on No doubt it's a mixed bag. There are some parts that probably make you roll your eyes There are some parts you're really proud of but If you've got a bit of a competitive personality where you're keeping an eye on what others are doing Just be sure to kind of remember your strengths And be balancing hope and realism So this is where this talk takes a turn for the personal Um, but I believe that there's power and vulnerability So here we go Who recognizes this little character Yeah This is hero He was designed by John Hicks who also designed the Mozilla Firefox logo When I joined Woo in 2014 as part of my hiring trial I was asked to write a brand document kind of a brand guide and I wrote a story about hero It was a backstory. It was intended to be sort of a personification of our brand So I wrote this little story from my understanding of Japanese culture And It was submitted as part of my application. It was appreciated and it was actually added to our brand guide Flash forward two years. I come back from a very relaxing holiday in Rome with my best friend to something of a storm erupting internally Now mind you all of this was internal so To cut a long shory stort a long shory stort short stort short Someone had had flagged this story as um cultural appropriation and it's being non-inclusive So considering this the spirit in which it was written This was absolutely shocking to me. I think I experienced about a hundred emotions in a split second seeing the comments that were going on and Yeah, I was I was absolutely horrified and I put my hand up I took ownership of it and so began a process Supported by incredible colleagues and people who were willing to be honest with me to help me Understand this thing of unconscious bias, which I hadn't really encountered before So with the best will in the world Um, yeah, I'd written this story and it wasn't inclusive. That was the bottom line The brain uses social stereotypes In order to simplify the massive amounts of information that it receives from the world And heightening the effect is the human preference for people who are similar to us The vast majority of these processes are invisible to the to the conscious mind So here you are sitting in this room. I challenge you to think about this No one likes to think that they carry unconscious bias. It's not a pleasant idea And yet it's it's almost I'd argue that it is unavoidable if you're just one person So what does this boil down to in terms of marketing? For me, it's one of what I consider to be one of the most valuable lessons I've learned as an adult And in terms of translating this lesson into marketing and into new commerce We've tried to start just being really intentional and mindful about this So here's an example when we launched our collaborator accounts Gareth and I gareth the designer and our marketing marketing team We spent quite a while discussing whether or not this image was inclusive No, I don't know if you think it's inclusive or not And I don't think we ended up we didn't end up doing anything groundbreaking at all But it was the fact that we had this conversation that I think was such a healthy sign We were thinking about it. We were thinking about Whether this was inclusive or not another example Um, we did a spring promo recently. I hope you all got the coupon bought some things Um, but if you look at the sign offline in this mail Half the world doesn't experience spring in april and I'm actually from that half of the world So in the sign offline, we included a little acknowledgment of this. We said three chairs for spring and autumn Now it's a tiny thing, but I think it's as marketers We need to be thinking about how we can be inclusive and it's these little steps that we can take So there's no silver bullet here John made a touch on some of these points earlier today. I think one of the keys Is hiring for diversity?  You can just be Really focused on breaking out of your echo chamber So that was my story about unconscious bias storytelling and connecting to the who So who has seen an article lately telling them to use storytelling in their content? It's like Yep, everybody's seen it. So I'm about to do the same thing and tell you that it's a great idea so But first some some other thoughts in a bit of a metaphor about content because I love metaphors So this guy looks like he's doing quite well at this party Um, when you go to a party you're trying to meet people You don't really go blazing in tell everyone about yourself Big yourself up talk about everything that you've done And then start demanding things from people maybe even demanding money before you even have a relationship with them before you know them So I think that this is a little snapshot in terms of understanding content And it's certainly the way that I think about it. I think of content as an in It's an inroad It's a way that you can win time You can win a bit of attention in a very in the very frenetic world that we live in As products and brands contents away away into conversations I think that's a great way to think about it Compare this to a Tupperware party Where someone who you think wants to spend time with you invites you over you arrive and it turns out that they just want to sell you Something and you feel duped It's similar to clickbait. I don't understand the logic behind clickbait. It might get you traffic But it does nothing for your brand and does nothing for your bounce rate either So we should be aiming to make content In a way that's more similar to a cocktail party that's going really well and not like a Tupperware party So this thing of storytelling A story about story a storytelling Um, the WooCommerce showcase was launched in 2015 We created this as a space where we we hope that our merchants would submit their sites And just share about what they've been building so people did it was great and from the entries that came in We would spark one every now and again that we felt would make a good story and we tell it on our blog So here's an example How e-commerce was a game changer for an entrepreneurial Lithuanian mum And this was quite an inspiring story. It was very inspiring conversation for me I love speaking to Igla the lady who I spoke to Did this post make us any money? Who thinks this post made us money? Oh So clever. Yeah, it didn't didn't make us a lot of money at all. Um Is it worth doing? Yeah, I would argue that it's priceless And here's why It gets us what got me talking to our users So as sellers of digital products, we don't speak to our users very much. Do we unless you're already absolutely nailing this and doing this all the time We don't naturally speak to our users. We don't naturally see them So how do we stay connected to them? For us Including case studies and stories and our marketing mix has been a really kind of consistent way We've made sure that we keep we keep doing this But for me something interesting happened here. So when our team was smaller, I used to write these posts But then our team grew So I didn't need to write the case studies anymore I I wasn't the person handling tweets and replying to our customers anymore And gradually I got a little bit a little bit disconnected from our customers And the thing I didn't even really realize that it was happening Until on a trip we went a couple of a couple of weeks ago to Detroit So I'm going to share a story from that We went to Detroit. It was a meet-up And this lady Kay shared her story about her business Now Kay lives in Detroit She's got a pottery studio in the outskirts of Detroit and she shared her story with us. She is hustling She's hustling to make her business work. She's working hard She's using wordpress.com actually to share her business online and to get traffic and to make sure that she's on the map And something happened to me listening to Kay sharing her story My heart completely engaged again And I had this realization that I'd lost something That had really been pivotal in marketing that I'd done before which was this deep connect with users and this deep care and concern for users So it was a wake-up call for me I don't think you can really have a sense of the why of your organization if you aren't deeply connected to the who it is You exist to serve So just practical tips here if you're thinking about doing this is set up use the research calls Turn the conversations into stories include them in your marketing mix And remember to tell them internally as well Because you might find that there's someone else in your organization who's become a bit disconnected too And having a culture of storytelling and celebrating the stories of your customers is just a good thing There's a postcard from afterwards, which is fun Social media and return on fields. I'm not sure if I don't think we coined this return on fields thing Who's heard that before Maybe you did. Okay. Well, Kudos to Kevin and our team if he actually made that up because that's kind of amazing So social media has always been a big part of what we do in the world of remarketing We used to use Pinterest as well, but we axed that for focus reasons. So now we use instagram facebook and twitter So something I think people forget about social media is that they're just channels They aren't these magical things that are going to suddenly turn you into this overnight success We probably all know that The other thing I think people forget about social media is that they behave very differently So if you create this wonderful piece of content that's going to add value to your users It's going to be your in at the cocktail party and then you smash it out across all your social media platforms in exactly the same way It's not going to perform as well as when you optimize it per channel So content behaves slightly differently in different channels So by way of example Here is how we announced facebook for WooCommerce Um, I've included a screenshot of the facebook post a tweet and an instagram post And just a few little thoughts on each of these Facebook unless you're boosting your content Anybody gonna see it. So you need to be thinking about that um Yeah, twitter you can mix things up. So sometimes we'll share things as a link sometimes we'll share an image post We're also starting to experiment with doing more ads and remarketing on twitter, which is interesting So it's using emojis and hashtags every time you do that you just get better engagement per tweet We probably experience that just using it personally as well, but it works if you're a brand speaking in that space as well And instagram you have to think that it's at a glance consumption So people aren't gonna click out of instagram and go and read an article They want to get value out of it at a glance So a little practical thing is to include a vanity URL rather than something long So like with blog posts, we measure our success of social media in terms of traffic and revenue But if that was all we did I think it would end up being quite dry So we have this other kind of magical metric in our team, which is return on fields and we We like to sort of do things every night again that are just just for fun or just to make people smile so for example This is uh A tweet that gareth shared So the fourth example there, um the the options for bookings where I can't actually read them without my glasses on But the fourth one was a little bit of a joke basically and the point with this is just sometimes it's okay to do something That's just a bit silly. I think as brands. I think it communicates this roominess and this healthiness that is is really positive Here's another example. I think it's healthy to do this and I think it's good Mailchimp are very good at return on fields aren't they If you've done email marketing, there's that moment where you're about to send a campaign and you're wondering if you've made a typo And the sweating finger is there and then you hit send and you get a high five It's awesome. What they're doing there is showing empathy that creates return on fields So there's a little picture of our team laughing I think laughter and fun does something really healthy for human beings generally but also specifically for marketing teams I don't think miserable teams produce content or anything that's very inspiring So I think Yeah, sort of striving for fun is a good thing Another thing that's good to strive for is creativity and marketing I think if we're focused on the bottom line constantly this can fall by the wayside So nourishing a team's creativity is really important And from that article it says that in the company creative thinking must occur on a spectrum between art and commerce I think that really sums it up When I joined woo, we were basically just sending transactional mails every night Again, we'd blast out of mail to our entire list the way we've used email has really changed over the last couple of years So who uses email in their marketing at the moment. It's pretty standard pretty staple. Yeah, we did it. So There are various ways you can do this We use mail chip integration So a few thoughts on email Send a newsletter So if you've launched a product or if you're thinking about launching a product You can start gathering email addresses and you can send people an email monthly I'm a big fan of newsletters if they're done, right? I think they work best when they include a bit of company culture a bit of product news Um, and again have this idea of adding value to your users It's not all about you and what you as a business want to be achieving This is a newsletter that a friend an ex colleague of mine started even before bryce had launched metric He was gathering email addresses bryce will tell you he's not a marketer, but he understands that it's important When he launched metric he began sending out this newsletter and I look forward to these updates a lot Bryce if you're listening, I hope you never stop sending them Something else that works Consistently well for us in the space of email is doing localized emails and geotargeting So this seems to be a bit of a theme that's actually been coming through in all of it in all of the talks is and being sensitive to who you're speaking to And being inclusive and I think doing geotargeted mails and doing localized content is something that fits into that realm So this is two examples when we launched square We did localized content even down to if you zoom right in the currency signs on that spreadsheet We're kind of adjusted We did the same for the uk and for the us And when we launched snap scan in south africa, we did the same thing So I highly encourage you if you're not already to experiment with geotargeting emails. They really convert and perform very well Something else that performs very well in the space of email is segmenting by subscriber activity So again, if you aren't doing this yet, I highly recommend you do Mail trim lets you segment by who's showing interest in your emails So you can create a list that's dynamic and fill it with people who are all four and five stars And you can send your four and five stars an extra mail per month Which is what we do and I can't share figures obviously, but this mail really does perform very well So I highly recommend experimenting with that if you haven't yet Another tip with email is to explore automations So this includes things like abandon cards, but you can also set up automations based on User activity So we recently set up a first purchase automation. That's also performing extremely well Basically whenever someone buys a product or creates an account on wecommerce.com They get added to an automation flow that sends them 12 really helpful emails to help them get onboarded into the world of Woo help them get set up And again, this is not all about us It's not all about selling and stuffing it with product links The goal here is to just help people get on boarded So yeah, I I recommend doing that if you're not trying automations to Automation is a hard word to say That's the first mail of the automation just to give you a little look in The fourth thing about email who's used ASAP hand wash before anybody. Yeah Okay, I absolutely love it if I go into a hotel or a restaurant that has ASAP It's like ding high quality signal And so I don't know what those things are for you, but I think we all have them And for me for emails high quality signals are design and copy So if you're going to take up some of someone's precious time life is short You may as well make it really great to look at and really nice to read So really nice to read is probably subjective But at least, you know making it grammatically correct And maybe throwing in some illiteration Doing something interesting with your sign off Um, so yeah, that's something to think about think about high quality signals in your emails And finally just remember um social media and emails are just these channels and chances to speak to them Speak to people. It's all about what you put in them I didn't like maths at school I was a non-fan. I yawned my way through stats Not a data person So I joined the world of woo and suddenly people began asking questions about how I'd done things I really did get by for about five years in my career without really having to worry too much about numbers I'd just say I was doing things by my guts and that seemed to be fine But at woo this didn't really fly and it continued to not fly at automatic so I've had to learn to love data and I'm pleased to report that I actually really do now. I find it extremely helpful So for our woo marketing team, we've put together a report We've got six metrics that we look at in terms of how our marketing stuff performs and we were guided by this It's important marketing needs to have these objectives It needs to have this framework and actually at the end of the day as marketers You want to know that what you're doing is contributing to your business objectives So it's helpful.  It's not enough We also need you to leap to leap without sufficient data to go with your humanity and your instincts and your hunches So I'm a believer in these things but equally and the believer in being led by data So starting to wrap things up Branding today thinking back to love marks brand equity how these things all weave together and our role as marketers My colleague Gary shared this article with me. I highly recommend you read it the title Whenever things the same it's the brand that makes the difference Now that's arguable But it resonates with me And the author of this article was the point he was making that as we Produce products as we get better and better at matching what competitors are doing as the table stakes are just having an excellent product It can be the brand that makes the difference. It can be those emotional connections that I was speaking about So brands in the past used to be built with big tv adverts Expensive budgets above the line messaging brands with these kind of far away things that you couldn't touch and talk to But these days things are very different, aren't they? Brands are more like very very high-res photographs made up of Thousands of tiny pixels or since we're in Paris perhaps they're more like pointless paintings with thousands of tiny brushstrokes Everything we do is marketers every piece of content we put out every tweet every email Every sign off every tiny part of ui is like one of these pixels or these tiny brushstrokes And my philosophy is that every single brush stroke comes So a definition of marketing based on what I've shared today Marketing is about reaching people Fetching converting and keeping them It delivers value above the noise and creates emotional connections It seeks to serve not be served. It seeks to include understand and delight It requires empathy flexibility and humility of its makers It thrives when powered by both instinct and data Marketing is an invitation So thank you for your time today Thank you, Marina. And this was uh, so interesting a whole new world for me. Thank you for sharing the knowledge with all of us um, I am quite sure there are some questions and um, we would like you to use the standing microphones Which are two of them in here in the front rows and two of them in the upper rows So if there are any questions, please go to the microphones and don't feel shy about it. You can ask almost everything Yeah, anything So please use the microphones if you want so So if there are yeah, there's a question over there. Thank you So my name is claudio from team isle. Hi my question to you is how did you integrate data? uh with your intuition You are talking about that and i'm interested to know at what data do you look no do you look now? Thank you So what data we look at so sorry So the I think if I understood the question is what data we look at to sort of guide our marketing To be honest, I had some problems to hear you so i'm just gonna answer that okay. That's fine. So we um at automatic We have an internal tool called tracks So we use tracks, which isn't very helpful to anybody else out here, but we also use google analytics It's very helpful the six metrics. Perhaps that's that's what you are asking about we look at um Revenue new revenue renewal revenue. We look at traffic We look at we commerce services adopters again something specific to our audience. We look at list growth um We look at one other thing So I hope that answers your question wherever you were out there Okay Uh, there's nobody to my friends. So um, I would like to ask you Um, is there maybe something or what what is maybe the biggest mistake that you have made while You have been uh involved into vu? Okay, let me think about that. I've made quite a few in case of choosing which one to share about um A mistake that I made it's actually another kind of inclusion one. So maybe I'll mention this um in south africa Okay, if I'm doing this That's like in south africa. We call that a mexican wave But that's not called a mexican wave in a lot of other parts of the world So I in an email that I sent out I said something like we're really excited about it being the holiday season. It's like a mexican wave ripping through You know Wu and we got a huge backlash from people pointing out that that was actually kind of quite offensive So that was a bit of a mistake. That was about a weekend to joining as well, which wasn't great So that was a mistake Thank you so much. We have another question here. Hi, marina. It's alec kaneer from folio vision I have a question which uh Is about a recent decision Who made where you decided you used to have this really cool policy that if I bought an extension I could renew it for support and updates for 50 off You've just changed this policy that all renewals, uh For supports and updates are at 100 and as a marketing person That's kind of a big Blow to the brand and to the marketing And so I'm really interested in how you're going to handle This difficult marketing challenge That's a great question. Thank you So I think who who would look forward to doing a pricing strategy change No one it's not an easy thing to do Um looking slightly beyond we're commerce and this is my answer. So I speak on behalf of myself Um, I think that it's healthy to renew products at 100 percent I think that for the wordpress ecosystem and all of us as business people trying to make businesses I think renewing products at 100 percent is Um, it's healthy if you back the support that you're given if you back the updates that are included I think that it's an okay ask and I think perhaps our mistake was not doing that from the beginning So that would be my answer The what I like about the 50% renewal is that it rewards loyal customers So I that is something that I Can you come closer to the microphone? I agree with the rewarding loyal customers So when people have bought into your product in your system, uh with this loyalty rewards even then it's a big change and so Whether one agrees or disagrees about the pricing I'm interested in as a marketing person How you handle the The reaction from your customers so that because it is a challenge And what what are what are you going to do to make it? To help people accept this in in a in a way that they still love your brand I mean, I I disagree with it, but I'm not interested in my disagreement with the The the issue I'm interested in how one deals with a huge challenge like that. Yeah So it is a challenge It's a business decision as marketers We need to think about how to handle that and pitch it correctly to our customers So something that we did do is we did is as a test initially we tested people's reactions And the response was surprisingly not not as outrageous as one would think it would be people were quite accepting We allocated resources specifically to discuss it with people. So people wrote in asking about the change We uh, I think people even actually hopped on a couple of Skype calls to talk to customers So it's something that we've taken seriously um We have an FAQ page about it where we say if you'd like to discuss with us get in touch and we're committed to doing that It's a decision we felt we had we had to make so we're sort of handling it together But I think being caring hearing people's concerns and looking at how we can continue to reward customer loyalty Perhaps just not in that way. I think that's the challenge that we face now. It's a great question though. Thank you for asking it Thank you, Marina. I think oh no, there's not a question. Is it is the last one? So please go on. Hi Uh, I'm Tomas from codable Um, I have a question about tracking different channels. So how do you decide? Uh on attribution which channel is performing and to what degree? That's a great question as well. So with um social media and the blog and A lot of what we look at is contribution to sales So you wouldn't be able to say conclusively, you know this blog post you can look at So we look at a blog post how much exactly that blog post brought in and then we look at also kind of contribution to sales overall because obviously there is this slight challenge of attribution so um We look at individual post performance and then we look at contribution to sales if that makes sense. Um so Yeah, I think I'm happy to talk to you more about it afterwards if you'd like Yeah, but um it is very important to think about attribution because a lot of the Platforms that we use for measuring things It actually you end up with inflated figures because everything wants to claim that it's the thing that contributed to the sales Which ends up and you can just do the math and it doesn't work. So Yeah, you need it's a great question attribution is something to think about Yes, marina. Thank you so much for this great talk. We all appreciate a big applause for marina


Welcome back MechanicalEI. The Clausius and Kelvin-Planck statements are the two statements of the second law of thermal dynamics. This makes us wonder how is the equivalence of Clausius and Kelvin-Planck statements achieved? We will take care of it in this second part of the series. Now in the first part of the series we discussed about a few prerequisites of the equivalence namely a thermal energy reservoir, a heat engine, a refrigerator and a heat pump. The next two prerequisites are a kind of fictitious machines called as a perpetual motion machines 1 and 2 that violate the first and the second law of thermodynamics respectively. A PMM-1 is a machine which would continuously supply mechanical work without consuming some form of energy and a PMM-2 is a heat engine that will produce network in a complete cycle by exchanging heat with only one reservoir. Having established this fact let's move towards the equivalence of Kelvin-Planck and Clausius statements which can be done in two ways. First consider heat pump which violates the Clausius statement that is it simply transfers heat from one reservoir to the another without any work expenditure. Assume a cyclic heat engine operating between the energy reservoirs such that it draws the same amount of heat Q1 equal to that discharged by the pump. If we eliminate the hot reservoir and directly pump the heat into the heat engine then we get a combined heat engine operating in cycles and producing network while exchanging heat only with one body at a single fixed temperature thus violating the Kelvin-Planck statement. Second consider a PMM-2 which violates the Kelvin-Planck statement that is assume a cyclic heat pump extracting heat Q2 from a low temperature reservoir and discharging heat to the high temperature reservoir with the expenditure of work equal to what PMM-2 delivers in a cycle. Now both these together constitute a heat pump whose sole effect of transferring heat from lower to higher temperature body violates the Clausius statement thus providing an equivalence. Hence using a few prerequisites we established a firm way of how the two statements of second law which seem unique in their own ways are equivalent to each other. So like, subscribe and comment with your feedback to help us make better videos. Thanks for watching. Also thanks a lot for those constructive comments. You help the channel grow. So here are the top mechanical EIs of our last videos. In the next episode of Mechanical EI find out what entropy is.


For the remainder of this evening, so what we're going to do is, first of all, we have the keynote speech by David Jermic, and I will introduce him in a second. After that, we have a panel discussion, and the crowd-admessings symposium always thought we would like to bring industry regulators and economics together, and this is the first time we actually achieved to get the most important regulators, namely the central bank and the securities regulator, for the panel discussion today. And thereafter, we will have a Q&A, so you can ask about the keynote speech and about the panel discussion. You can also use the Twitter hashtag, which is written over there, and post questions over there, so I will forward it to the moderator. So for this year's conference, I'm usually not a conference organizer. I don't really thought or didn't know what the point about it is. But then I realized, actually, it's quite a nice thing, because what you can do is, if you're interested in the research topic, you can always invite the most interesting people on the topic, and then you ask them first, and if you're lucky like me, the most or the best speaker you could imagine or think of actually agrees, and this happened for the last years, it happened this year, so I'm very glad that David Jermic agreed to come as a keynote speaker this year. And I must say he's really the ideal keynote speaker for the crowd-admessings symposium, and why is that? Because I think nowhere in the world, or it's very difficult around the world to find a scholar who brings together expertise in law and economics. Well, there are some law and economics scholars, obviously, but on the other hand, you also need someone who is interested in topics of financial technology. I think there are not so many scholars around the world who are interested in law and economics and have a particular interest in financial technology. So, David actually accomplished this quite well, because he did a bachelor's degree in economics at Harvard University. He did a master's degree in business administration at Harvard University. He did a Dr. Juris, and you'll guess it, it's at Harvard University. Then he did a master's degree again in business economics, yet again in Harvard University. Then he did a doctorate in philosophy and business economics, and you're right, it was at Harvard University. Actually, yesterday there was a speech by Benjamin Edelman, and the commentator said, apparently he really likes this place, Harvard, and I thought, what a lame line I would say, but when I was reading David's CV, I really thought, this is really true for you. And so you apparently really like this place. So currently, David is the Albert Fingerhood Professor of Finance and Business Transformation at NYU CERN Business School. And he also serves as the Chairman of the Finance Department. He's the Director of the NYU Pollock Center for Law and Economics. And you might guess it, he's also the Editor of many journals and has been Editor of many journals. And I have to disappoint you, now you know that he's the Editor. You can't buy him a drink because the financial support of this conference is kindly supported by the Max Planck Institute, but there might be another opportunity to do that, I guess. So he's the Editor, among others, or Associate Editor of JFQA of Financial Markets and Portfolio Management of the Journal of Financial Economics, multinational finance journal, digital finance, Journal of Law Finance and Accounting, and so on. He's also one of the many, or one of the very few people who actually teach courses in FinTech. So he taught a course or teaches regularly courses in Bitcoin and cryptocurrencies, he's published a lot of papers. Among others is Bitcoin, A Real Currency, which was already published in 2015. Then he has published a lead article in 2017 of the Review of Finance on Corporate Governance and the Blockchain, which also received a prize as the best non-investments paper. He has currently a new working paper on initial coin offerings. And today he will talk about, are ICOs a real innovation or just securities in disguise? And I'm very much looking forward to your presentation. So the floor is yours. Thank you very much for attending. Thank you. Thank you very much. Thanks for coming out today to hear my talk. And as Lars mentioned, I have a new paper on this topic. I'm going to say almost nothing about this because, in fact, it resembles many of your papers, as I've mentioned, in making comments earlier today. There are many new papers on ICOs. And the talk I'm going to give is actually similar to one I was scheduled to give last November in Shanghai. I was keynoting a conference very similar to this. And the topic was about ICOs. And they contacted me about 10 days before the conference and said that I would have to change my topic because it was politically too dangerous to discuss this subject. So I was a little taken aback because they had not objected. And in the interim and between planning the conference, I think many of you know the Chinese banned the initial coin offering. And I said, even if you banned it, why can't we talk about why it's banned? And so forth. But they instead wanted to just pretend it didn't even exist. And so I was politically suppressed and have now vowed never to speak again in China until there's academic freedom and so forth. But I'm happy to come talk about this in other venues. And the issue has really gotten, I would say, quite hot in the last year from a regulatory point of view. And I really want to talk about how the US has handled this, how other countries have handled it. And what I think the future holds, the person at the top of the slide who I'm going to use really is the straw man for this talk. I think many of you will recognize this is the head securities regulator in the United States. This is Jay Clayton, who is the chairman of the SEC. And he made these comments back in March in a hearing in the US Senate where he took a very extreme position saying that every ICO he's seen is a security, meaning that they should be regulated by him. And I think you can understand this in one of several ways. Maybe it is true that all ICOs are securities, although I'm going to argue pretty strongly against that point. I think it's also possible that Jay Clayton just hasn't seen very many of them, that he hasn't taken the time to inform himself. And I think that may be the most likely, in fact, it's a knee-jerk reaction that the regulator is afraid of this and is trying to close it down before it leads to more embarrassment for the agency, which they've had a considerable amount in the last 10 years. I think really you're looking at something quite new. And I have to say that I have, in the course of about 14 months, traveled a long way and reexamined many of my own beliefs on this. So the first time I heard about ICOs was last April and March when I was teaching the blockchain course I have at NYU. And this event popped up on the calendar called the Token Summit. So you can see this gentleman is wearing a Token Summit t-shirt. This is New York 2017.  In fact, the room that they rented was my classroom, the same auditorium where I teach this topic. And they kind of snuck in under the radar without permission and got the veneer. It's like if someone had rented a room here in the Max Planck Institute, said we're having a conference and made it seem like the institute was hosting it, but it really wasn't. And these Token Summit people approached me and my co-author Sabrina and basically any faculty member they could find who might give some legitimacy to this and talk about it. And we all said no way. We didn't want to touch these tokens because they looked like pure fraud. And this is a video where this gentleman who went to the Token Summit, he goes on for about an hour. I'd like to play just the first two minutes to give you a flavor for what it was like and then I'll say a little bit more about it. Hey, man. I'm Osaname Vangelina. Welcome to Hacking the Sensitive. The show where I teach you how to make six figures in your 20s by any means necessary. And this week I had the pleasure of attending Token Summit in New York City 2017, the world's first conference purely dedicated to initial coin offerings. So that's my classroom. What are ICOs and how are they disrupting and hacking venture capital? And today's show I'll cover this and how ICOs are creating millionaires, millionaires in two or three years. I had the pleasure at this conference of meeting tons and tons of crypto millionaires. Guys who make their millions on Ethereum. I met like five guys in one meter who made millions off of Ethereum. One guy made millions off of made safe. So ICOs, ICOs, baby, are the new Gold Rush. Today's show I'll break down how you guys can leverage ICOs to make your first million. Let's get into it. Okay, so this does go on for an hour and it's highly entertaining. But you can see how this would raise alarm bells with the securities regulator. Because people who have no idea what they're investing in are throwing money at this new product. And I was relieved that I had not become involved in this. Now, this is a rare case where I'm going to admit that I misjudged the situation. And I have a lot of regret that I didn't speak at the Token Summit. Because this was the coming of age moment. You saw the data earlier today where the whole market took off from May of 2017. This was really the point of reference for many people. I wish I had that Token Summit t-shirt that I probably could have gotten for free. And we just had Token Summit 2 in New York. Which is now a pretty important event with a new type of property that I think is not a security. In fact, it's not anything that we've seen before. And what the regulator could or should do about it remains very much an open question. So there are many studies circulating that have this flavor that ICOs are essentially a breeding ground for fraud. So this is one where they look at the universe of ICOs defined very broadly. And conclude that 81% are scams. And another 6% have failed already. And another 5% got off the ground but have gone dead. And only 8% ever see the light of day. And of that 8%, only 3% are successful and so forth. So the message here is that this is something that is very dangerous to the investment public. And almost everyone involved is promoting something that we should stay away from. Now, if we have time, I'll come back and talk more about this data later. Because I think like most data it's somewhat misleading. But I would also ask if we looked at any slice of entrepreneurial ventures like new restaurants in New York or whatever. And we took an extremely broad view of everybody who ever thought of starting a restaurant, how many of them ever squeak through. And is this glass in other words half full instead of half empty? So what's happened, I think you all know, is that the market has moved in this direction extremely vigorously and strongly. So if we look at the largest ICOs, and this has really only been going on for a little over a year. But as of the end of June, you're seeing some very, very large deals come to the market. And now some of them into the billions. The one at the top of the pyramid is this guy who I think he's based in Bermuda and he raised $4 billion for a blockchain. Nobody knows what this thing actually does. But if you're not paying attention to this, you're missing something that's pretty important. Because we could look at the biggest IPOs of the last 12 months. Or the biggest anything in finance really. And this is really where the action is. But at the same time, people are throwing money at things that are clearly not securities. And if the SEC is worried about fraud and so forth, maybe we all should be. But there's lots of fraudulent markets. Like the market for used cars has a lot of fraud in it, for instance. But the SEC doesn't jump in and try to regulate used cars. And the market for real estate and all kinds of other industries is full of misleading statements and consumer protection issues and so forth. But do these ICOs really exist in the world of other investment securities? Such that governments should be using existing laws and relying on current regulatory agencies to step in and do something about that. The more you look at them, the more I think you need to be skeptical of this just because of the way they're designed and put together. So this is the head of enforcement at the SEC. It's a guy named Steve Pekin. He's essentially the number two person there. He's also a law school classmate of mine. And he came to NYU with his boss, Jay Clayton. And they gave this presentation last September. And they absolutely went on the attack. Pekin said that ICOs were roaches. Is there a German word? Is it the same? I know you, this is a very clean country and you don't have roaches here. But Pekin said roaches kind of crawl out of the woodwork and try to scam money off of investors and so forth. And they've really thrown down the gauntlet and said that this is something that we're simply not going to tolerate or at least are going to scrutinize extremely carefully. Now, the issuers of the ICOs don't want to be regulated by the SEC or by the regulators in any other country in particular. In fact, this whole thing was designed, I think rather cleverly, to be beyond the reach of existing laws. And I think the issues are rather obvious. But in case this is confusing to anybody, regulation can be costly in that you have to pay filing fees and produce all kinds of documents. And it introduces delays because there are review periods and so forth where the regulator can keep you from coming to market where you might have wished to. I think a second issue and some of the papers earlier today got at exactly this point. If you are regulated as a security, you really have to publish a disclosure statement. We call it a prospectus in the US markets, where there's a whole laundry list of information that may be irrelevant to the market or may even be something that you wish to keep private in your own interest. So this is the old issue of mandatory versus voluntary disclosure. I think it's a very interesting one.  And this is something that may be harmful to the bottom line of your business. But I think at least in the US it's the third issue that is the matter of greatest concern. We have pretty strong investor protection laws that allow people to sue as essentially disgruntled investors on a class action basis. So there can be very large liability both for people who issue securities and for the third parties such as the accounting firms, the banks and so forth who might have been involved in the issues. And this has been very controversial in the world of IPOs and other forms of capital raising. And people issuing ICOs don't want to touch this liability at all. Now, I've made an effort to learn about the history of this and I've supervised a couple of student research papers. And I think that ICOs are really quite different from securities and I'll explain why. But they are also things that we can recognize as pretty clear descendants of different types of products and assets that have been in the market for quite some time. In fact, the antecedents of these have been right around us for many, many years. One of the most obvious things is the world of online video gaming. So I am sure nobody in the room actually does this in your free time, but there's this whole parallel universe of people who go online for hours, play these massive multiplayer online fantasy games. And many of these games have internal currencies where if you kill the dragon, you can get a coin and then you can use it to buy roses for the maiden or to send messages, whatever, I don't do this myself. But these coins are viewed as valuable by people who play the games to the extent that they go online and try to sell them. And the interest in this is such that marketplaces have evolved. So this is something called MMO Bucks. And you can buy the age of Conan Gold for euros or for dollars. You can buy the Albion online gold, the Anarchy online credit. These are just the A's, but there's a deep market for this stuff. And if you look at these tokens, they are for a single dedicated use. They're only good for being a customer on the platform of these online games. In other words, they work an awful lot like the blockchain based ICOs. I think the main difference is the control of the scarcity of the token itself. That in the case of an ICO, most of these are Ethereum smart contracts, where in a very transparent way, the software is written to limit and put a cap on the number of tokens. And so you know if you acquire a token, you're acquiring something that will be in limited finite supply. I think in these video games, it's up to the game promoter and they can more or less do whatever they want. But you're investing and shouldn't use that word lightly, but you're purchasing something here that may or may not ultimately be controlled with a certain scarcity. Now social media also provides examples of things that look pretty similar to this and Tencent, the social media company in China, has something called the QQ coin that was introduced. This is all the way back in 2007. And the QQ coin functions not terribly differently than these online gaming tokens where you can use it to send gifts to people who are your friends on the platform. You can earn these by doing good things that build the community and so forth. But ultimately it's designed to be a single use token. What the news story is about though is that the demand for these got hot enough that they began to trade in the real economy to the point that the Chinese central bank began to worry about them as rivals to the real money, to the fiat currency. And I think in these two media platforms, the people who created ICOs are clearly borrowing many ideas that were successfully used by media companies and grew probably at a rate and a scale that the companies weren't prepared for. However, it is professional sports that to me seems the real inspiration for this. And let me explain exactly why. You've got on the screen here a diagram of the football stadium that was recently built outside of New York. And this is our football, American football. But this is used by the giants and the jets. And it cost about $2 billion to build this stadium. Now in the past teams were pretty good at getting the local cities to pay to build the stadium, but that has gone by the boards because taxpayers don't like to do this anymore. And as an alternative they could have simply borrowed the money and paid it back with interest or they could have even sold equity to new investors who might have put up the $2 billion. But what they did instead was sell what are called seat licenses. And there's about 80,000 seats in the stadium. And each of these was sold to an investor. They are not tickets to the games. Instead they are the right to be a ticket holder in the future when the stadium is finished. So they are raising money from future customers to finance the construction of the stadium. And in this case about 30% of the cost was financed by tapping the customer base. Now the giants and the jets were not the first team to do this. We've seen these PSLs going back, I think, 20 or 25 years in America. I think they've spread on a more limited basis to Europe. And you see them not only in professional football but also in baseball stadiums and various others. But what you have here is, first of all, clear scarcity. The number of seat licenses is exactly limited to the number of seats in the stadium. And you can be pretty confident there won't be deflation of the currency here. And a critical part of this is that you can trade them on the secondary market even before the stadium is finished. And that's what this website is over here. This is something called the PSL Source. And what you can do is basically buy and sell the personal seat licenses for about 15 different professional football teams. And these go up and down in value based on how the team is doing on the field. Even the weather can affect these and so forth. But there is a secondary market that provides liquidity for the early investors, which is something that you can immediately recognize as being important to the ICO itself. So what is really happening here is the consumer surplus from being a fan of the team is being capitalized here in a transaction that I think is pretty clever. If you're a sports team, there's a problem that occurs over and over again when the team does well. If the Yankees, for instance, make it to the World Series, the baseball championship. In principle, they could sell the tickets for $2,000 each because the demand from New York fans is very intense. But when teams try to jack up the price, they get enormous public relations blowback and even political regulation. People try to step in and limit the ability of teams to price the tickets at the market clearing level where supply and demand would intersect. And I think this is a way of doing it on the sly. That when you invest in a PSL, the cost of the PSL really should be the NPV of the future consumer surplus that you would get above and beyond the ticket price. And this is a way of the teams to take in that revenue on an expected advance basis in a way that they've never been able to get away with in the day to day or week to week ticket market. So I view this as an innovation. This is not debt or equity at all. This is something very different where you find a way to persuade your customers to put up capital in advance for the right to be a customer in the future. And it turns out that this is not really new at all. The first people who did this were the All England Club in 1920 at Wimbledon. So there's something called the Wimbledon debenture. And these seat licenses are for the life of the stadium. They originally called these perpetual, but then people realized that all stadiums are torn down sooner or later. So they're now called personal seat licenses. Wimbledon sells them for five years. And they've been doing this all the way back to the 1920s. And they do it very openly. If you go on the All England Club website, they actually point you right to the market for these debentures where you can see the up to the minute price. So the All England Club is even abetting the marketplace for this. But this, I think, is the origin of the ICO. If you're raising money from future customers, the first people who did this were Wimbledon about 100 years ago. Maybe there's earlier examples, but this is the earliest one that I've with help of some student researchers that we've been able to uncover. We happen to have Mervin King on our faculty at NYU. And Mervin, of course, is the former governor of the Bank of England. He's also a trustee of the All England Club. And so I had the opportunity to discuss these debentures, what's going on, why do you have them. And he said that originally they were launched almost 100 years ago, because the club couldn't get credit that no one would lend them money back in the 1920s. This was a long time before Roger Federer and Serena Williams and so forth, and there was no TV contract back then. And he said that essentially this was the only way they could raise capital, but it was clearly not raising it from the debt markets or the equity markets. It was a very new channel. Now, why have they continued to do it? There are some technicalities about taxation and about the sharing of revenue with the tennis association that make this attractive to the club. And I'm not totally up on the details, but I think this is a way of taking in revenue without calling it revenue for them that works to their advantage. And I think some of this is probably playing into the professional sports in the U.S. Now, you see that I'm referring here to a legal case. That occurred all the way back in 2006. The San Francisco Giants baseball team built a stadium, which is called Pack Bell Park. And they've been playing in there for about a dozen years now. And they thought to go to the SEC, the regulator, and say, we're selling these personal seat licenses. Do you think these are securities? And the regulator looked at this and said, no, these are not securities.  We don't consider you part of our domain. Now, I don't think Jay Clayton knows about this. And I think the SEC today would love to walk this thing back and make it disappear, because given an opportunity and a simpler time with a lot less attention, when they were just asked to look at this on the facts, they said, no, these are not securities. So I want to put on the table one more example. And we're going to come back to this at the last slide in about five or ten minutes. But probably the first ICO in the blockchain world, we all know, is the Ethereum token sale, the Ether tokens back in 2014. So this was the idea of Vitalik Buterin, who needed money to build the Ethereum platform. He needed to pay the programmers and the rent in Zugg Switzerland and so forth. And so they sold, in exchange for Bitcoin, 18 million worth of Ether tokens. And they put out this white paper, which took a pretty aggressive position that Ether is a product, not a security or investment offering. So Buterin was very worried about the disclosure and the liability issues. But he staked out the claim straight off that the Ether tokens were not securities. Now, just because he says they're not doesn't mean it's not really up to the issuer. But at the very least, they wanted to kind of advance this proposition. And I think, I don't want to say a whole lot about this, but they may have been a little bit too clever here, because if you sell somebody a product, you have revenue and you probably owe income tax. Now, they're in Zugg where the tax rate is 8%. But I think everybody who argues that we're not selling securities is actually instead creating an income tax liability for themselves. And this is something that maybe a next year's conference will become a much bigger issue. So I think that this claim is probably very defensible, but it opens the door to what may in the long run be a much bigger issue for these people, that if you're not raising capital in the securities markets, you're actually raising revenue that is taxable income and may be much more expensive for you to deal with than just complying with the securities laws. But let's look at what a security is and is not. And due to my diverse education, I think about this from two points of view. One is as an economist, we teach that a security is a bundle of two sets of rights. I sat in Oliver Hart's course and learned all about this. And any textbook definition says that if you own a security, you get cash flow rights, typically dividends or interests or something like that, and you get governance rights. So in the case of equity, the governance rights basically are voting rights to elect the board. In the case of debt, the governance rights are typically triggered in default, where you can intervene in bankruptcy. But that's what a security is, is really the sum of the value of the two rights, the cash flow right and the governance right. And there's a lot of interesting research by people like Zingales and others about how to disaggregate the price of a share into the voting piece and the cash flow piece and so forth. But this is not a controversial definition. And I think it's pretty obvious that with an ICO, you don't get either one of these things. An ICO has no governance rights, it has no cash flow rights. So it completely fails the economist's definition. What you're getting with the ICO is very simply the privilege of being a customer and you're paying for the expected consumer surplus that you would get down the road from using the platform. That's totally different than the ways Zingales and other people have framed the problem. And if you go back to the white paper from Vitalik Buterin, it goes right in this direction and says, the ether does not give you voting rights over at anything, there's no governance rights. And we make no guarantees of future value. So he's disavowing any investment profits either. So this is a very clever 20-year-old who brought this thing to the market where he seemed to know and to very carefully frame the offer of the ether as not falling within the economist's view of what his security is. Now the other way to think about it is how would a lawyer define a security? And here, every country is free to make its own rules. And what the law is in the US may be different than in Germany, which may be different than Singapore and so forth. But as the media has written about, and I think no one in the room probably heard of the Howie test a year ago, but you've all probably heard of it since then. There's a case that goes all the way back to 1946 called United States versus Howie, where the federal courts laid down a four-part test for what is a security that's covered by the securities laws and what is not. And it's an interesting test, and the first one is that for something to be a security, there has to be an investment of money. Now, most ICO tokens are sold for ether in Bitcoin. And so if the US wants to go into court and argue that these are securities, they have to begin by taking the position that Ethereum is money. And I would find this amusing to see the government lawyers trying to make this point in court. Not the least of which is because they've taken 180 degree opposite position on taxation, where they've held that ether and Bitcoin are capital assets, that they're not money and that you owe capital gains in a way that you wouldn't if you just had euros and Swiss francs in your pocket. So I think that this is a more uncomfortable thing for the regulator to have to argue and we'll see if they ever come to the point of making that argument. But the real issue is the second part of the test, which is why is the person investing in this? And if you're investing due to an expectation of financial profit, you may well have a security. But if you're investing for future consumption, that's a completely different motive. And so if you look at the ICOs that are out there, I think there's two big buckets of them in the world today. One are really financially based. I think a great example would be the tether token, where you can buy something that is supposed to be equivalent to the US dollar, where one tether is one dollar. But there's also gold tokens, and I've heard about real estate tokens. These are basically taking existing financial assets and securitizing them. Something that Wall Street has already been doing for decades. So these security tokens, I think, are securities, without a lot of controversy. But the much bigger group in our paper, it amounts to, I think, 68% of the sample are these so-called utility tokens. Where there's a clear connection between the token and the right to be a customer on a platform, in the same way that the seat license gives you the right to be a fan at the football game. And I think this is a very novel question that when Halle was decided, which is 72 years ago, the idea of raising money from your customers just wasn't on the radar screen. And things like computers and blockchains were not even invented yet and so forth. So at the very least, I think this test is badly out of date. And if the courts are going to ultimately rule on this issue and we'll have to see if that happens, they may invent an entirely new test. But if you take the test as it now stands, as a lawyer looking at this, I see big problems with the first two. The third and the fourth, I think, are probably easier for most ICOs, that there's clearly a promoter and a common enterprise among the people who are putting up the investment. But I think if you're putting utility tokens out there where there's a clear use for future customers, this is something that is very much at odds with the legal test, even as it is at odds with the economist's view of this. So I think the people who are building the stadiums or building the blockchain platforms have found a very clever way to raise capital, but they're doing it in a way that is simply not a security, as we've thought about it in the markets up until now. Now what needs to happen is that Congress needs to write a new law. And this is a much broader point that applies not only to the ICOs, but to all the new crypto property that has come out in the last 10 years. So when you want to think about things like how do we tax Bitcoin and how do we deal with smart contracts, there's just been a huge amount of innovation that does not fit well into existing law. And the tendency of most politicians is to think that we can take the laws that we already have, the agencies that already exist, and shoehorn these assets into the infrastructure that's already there. I think this is a big mistake, because the laws just don't anticipate the problems that are raised by these new things. I think that crypto assets in fact solve many of the problems that have been around in the securities markets for years, but they surely create new problems and they demand regulators with different skills and probably very different mandates. So ultimately I think Congress will do this, and as you go around the world, other countries will also update their laws, but they're playing for time because they don't understand this. Now in the meantime, there's a small set of countries that have been very aggressive, and the two that really stand out would be Singapore and Switzerland. Switzerland in particular has welcomed the ICOs. And as I think everyone knows, the new home of these things is the Crypto Valley, which is this serene lakefront canton where not so many people used to go, but it has increasingly acquired a stream of very highly educated visitors with a tech background, and they're trying very hard to make this the new Silicon Valley. This is the Crypto Valley where the next generation of tech innovation may take place simply because of a more benign regulatory environment. So we have regulatory competition among countries, and I think right now Switzerland rather unexpectedly is being very aggressive and is winning this competition, at least in the West. In the East it's clearly Singapore. And there's a lot at stake here. In fact, if you're the US and you see Switzerland doing this, I think you realize this is revenge for the banking thing that happened a couple of years ago where the US broke through all the defenses of bank secrecy for tax reasons, and now the Swiss are settling the score by trying to steal this whole business. But I think you really can't have people like Jay Clayton banging the drum saying these are all securities and I'm going to regulate them. You need to be much more thoughtful about this. Now, just over a month ago, the head of the corporate finance division, this is not Clayton but one of the people who reports to him, he gave a talk at a conference in San Francisco and really surprised people by taking the position that in his opinion the Ether tokens are not securities. So this is going back to what everyone views as not only the first but probably the most successful of all ICOs was Buterin's launch of Ether where he said Ether is a product, not a security or investment offering. And one of the very top people in the US regulatory scheme agreed with Vitalik and signed on to this point of view. Now, this puts him at complete odds with his boss but I think what may be going on here is the winding down. What I've said is a regulatory retreat that the chairman has gone on record taking a pretty indefensible and extreme position and now leaving it to the deputies to clean up the mess and come up with a more reasonable position. But I took this as a major change in the regulatory orientation of the SEC. If they don't think Ethereum is a security, many, many other things will also not be covered as securities because that's really the touchstone, the reference point for much of this market. So I don't have a particular stake if the US loses this market to Switzerland. I go to Switzerland all the time. I'm happy to visit the crypto valley rather than Washington to see what's going on. But I think the US has realized that they are losing a regulatory battle here against a smarter opponent and there's a lot at stake here. This market is growing so quickly and the deals are growing so big that if you are hostile to them, you're going to chase something very important outside of your borders. And to a new home, I really do think that Switzerland and Singapore at the moment have taken ownership of a market that looks extremely promising. So I wish I had gone to the token summit and I think that everybody who's researching this and trying to understand it is doing something that will pay off not just in a publication in the short term but probably over a period of many years because you see a real innovation in capital raising here that I think in corporate finance this is probably the most important thing in at least 30 or 40 years since maybe the leverage buyout if you wanted to look at something of similar influence and scale. And we'll have to wait and see if I've learned anything from the four or five years I've been studying this stuff is the change occurs very quickly and to even try to guess what may be interesting six or 12 months from now is going to be very difficult. But this is something that clearly in my own mind I underestimated, I think the regulators have greatly misunderstood and it's going to require a very thoughtful approach going forward about how to handle it that in the end is probably going to have to be friendlier to business than has occurred so far. So when you hear that 80% of these are fraud just wrap up by going back to this slide I think this is incredibly misleading because first of all you're not going by the amount raised simply by the number of people who have expressed interest in this. But I think all of entrepreneurial finance sort of looks this way that everybody who starts a new business the large majority are destined to fail. You know it's only a small number that's squeaked through but if you're a diversified investor and you own a little piece of many of these and so forth there's a pretty healthy return to entrepreneurship if you're willing to understand that you're going to have probably nine losers for every one winner. So I'm not sure this data even if it's misleading is particularly disturbing and rather than using it as a basis for killing off the market we should try to figure out what makes companies select into the blue slices here what are the success factors and I think a lot of the papers of the conference today are doing exactly that in a way that I know I've learned something from. So let me wrap up here I think I've pretty much hit my limit in terms of time and we're going to go now into the panel discussion and talk about these issues further. So thank you all for your attention and for the invitation to be here.