Shane Mac, Co-Founder of XMTP, on The Future of Messaging, and Decentralized Communication | Ep. 244
In an exclusive interview with cryptonews.com, Shane Mac, Co-Founder of XMTP, talks about the true importance of decentralized communication, building messaging-based business, and the future of messaging.
About Shane Mac
Shane Mac is the Co-Founder of XMTP, the largest open protocol, and network for secure web3 messaging. Prior to XMTP, Shane founded Assist, which built the first business messaging for Facebook Messenger, Apple Business Chat, Google Business Messaging, and SMS. Assist was acquired in 2019. In 2017, Shane co-founded & bootstrapped Squared Away, which provides remote executive assistants powered by military spouses. Squad Away recently passed $25M in revenue, led by his co-founder.
Shane Mac gave a wide-ranging exclusive interview which you can see below, and we are happy for you to use it for publication, provided there is a credit to www.cryptonews.com.
Highlights Of The Interview
- Communication fundamentally connects everyone; having centralized players own users’ means of communication can be detrimental
- Portability of messages is key in developing the web3 ecosystem
- As messaging becomes more safe and secure, more users and institutions will feel comfortable diving into web3
- The true importance of decentralized communication
- What is messaging in Web3, and how is it different from Web2 messaging?
Full Transcript Of The Interview
Matt Zahab
Ladies and gentlemen, welcome back to the Cryptonews Podcast. We are buzzing as always, and I’m super pumped to have today’s guest on the show. He’s coming in hot from the one and only Nashville, Tennessee in the great USA. One of the best cities on the planet and may or may not be the bachelorette capital of the world. So always good time there. That’s just what I’ve heard. But time for the bio, today we have Shane Mac on the show. Co-Founder of XMTP, the largest open protocol and network for secure Web3 messaging. Prior to XMTP, Shane founded Assist, which built the first business messaging for Facebook Messenger. That’s huge. Apple Business Chat, Google Business Messaging and SMS. Assist was acquired in 2019, in 2017, Shane Co-Founded and Bootstrapped Squared Away, which provides remote executive assistance powered by military spouses. Squared Away recently passed 25 mil in revenue, led by his Co-Founder Shane currently lives in beautiful Nashville, Tennessee. It’s been a hot minute. Super pumped to have you on Shane, welcome to the show, my friend.
Shane Mac
Hey, Matt, it’s great to be here. Thanks for having me.
Matt Zahab
Pumped to have you on. You and I were shooting a shit a little about Nashville before we jumped on here. I have to start with Nashville. It’s one of the best cities on the planet, and it appears I got one buddy who lives there and friends who are frequenting there all the time. They say it’s absolutely blowing up. You were saying it’s like the next Austin. There’s just so much going on there. Why is everyone moving there? Any non obvious reasons why there’s so much buzz around Nashville right now?
Shane Mac
I have a couple of answers to that. So for me, personally, I’ve always loved music. I love the culture of it. I love cities that aren’t a monoculture where you kind of connect different dots and you’re around different people. And so I also feel like ideas, even when I work in technology, when I’m around musicians or people that are, you know, really going after their dream. And that’s kind of the culture and the vibe that Nashville is it’s just really inspiring and awesome to be around that creative energy. And I learned a lot from that creative energy, even doing in a different kind of discipline. So I just love the culture and the music and the vibe of it. But also I would say I call it the switchboard city. So I can be anywhere in the United States by 10:00 a.m.. And it’s right kind of like has that middle. It has enough people coming to it where there’s enough direct flights, there’s an a direct flight to London. And so the fact that I can get to London, but I can be to New York, I can be in a meeting in New York by 10:00 a.m.. I can be to San Francisco with the time change in a meeting in the office by 10:00 a.m.. Austin, Seattle, Miami, Chicago, and the fact that you can really have that hub, I call it the switchboard. And then as the world has gone remote, I actually feel like it’s a great place to host your off site because you can reverse switchboard it. Everyone can come here easily. It’s really built for people coming to town. The convention center is great. Places to stay are great. The tourism is great. The activities are great. The vibe is great. And so I think for building relationships kind of I always say relationships are built in the barn, not in the boardroom. Like when you want to do personal things, have more kind of go golfing, like you were saying, you love golf. Tons of that here. And I think those kind of activities are the things that build better relationships. And so I feel like it’s just a perfect kind of mix of all those things. But the switchboardness of it is something that I think Austin doesn’t have or Miami doesn’t have because they’re just a little harder to get to, where actually our interconnectedness to all the cities, it’s not that we’re competing with them. We’re actually the hub of them.
Matt Zahab
Great point there. Is that a Shane Mac original, the switchboard line?
Shane Mac
It is and funny, you kind of just listen to what sticks and you don’t even really know why I said it. Like, two years ago, I was giving a talk in town and everyone after me was like, the switchboard and the switchboard. And then everyone started saying the switchboard. And this guy actually made a design and I tweeted it a couple of years ago because he sent it to me and he designed the United States and he said the switchboard city. And he had all of the air travel times and time changes to get anywhere by 10:00 a.m. And so this guy Jordan in town did that, and so that kind of gave me the idea of the switchboard. And then people just started saying it, people started using it, and so yeah, I call it the Switchboard City.
Matt Zahab
I know it’s a little off topic, and perhaps I’m way over my head in asking you this, but real estate wise, you think it’s a good bet going in Nashville? Seems like it.
Shane Mac
I mean, I’m not a real estate investor. I don’t pertain or claim to know anything about real estate. But when people come here from New York, they think it looks really cheap.
Matt Zahab
Yeah, good point. Love that. Let’s jump into some messaging stuff. You built some crazy messaging tech in your career. Why messaging? Like, when you finished uni and did your thing and was like, hey, I need to start a career, why messaging, of all things? Was it just a no brainer thing back in the day when you first started? I’m very curious to understand why you’ve sort of taken such a deep dive into messaging. Obviously, it makes sense. It’s all we do nowadays. But back in the day, why did it seem so obvious for you to work on these messaging protocols?
Shane Mac
I don’t actually know if it seemed obvious versus it allowed me to meet people that I otherwise thought I could never meet. And when I was 13 years old, I was actually in my UPStairs bedroom, and I was a baseball player. And when you’re 13, you go from 10 to 12 to 13 years old, you go through three different leagues of baseball. You go to Mustang, to Bronco to Pony, and every league actually has a different weight limit the bat. And what I realized is my mom was buying me $200 TPS slugger bats. And then the next year I was like, I want the new weight limit screw this back. And at that same moment, I was like, what is this eBay thing? And I was 13 years old, I used my dad’s name for a fake PayPal account, and I posted the TPS slugger on eBay, and all of a sudden, all these bids came in 120, 123, 127, and I’m like, my mom doesn’t even care. She just bought me a new bat with a new weight limit because there’s this new weight limit every time you grow in the leagues when you’re that young. And so I started asking my friends, I said, hey, your mom buy you a Louisville slugger? And they’re like, yeah. And so I started selling these bats on eBay, and I actually was doing a few thousand dollars per month in revenue. Had a little printer at my house printing out the UPS slip, etcetera.
Matt Zahab
Wait, Shane, you’re 14? Like 13.
Shane Mac
I was 13 years old. Yeah, 8th grade.
Matt Zahab
You were making a couple of grand a month.
Shane Mac
It’s probably my most successful entrepreneurial endeavor. So I had this little printer up stairs. The UPS guy used to come down the drive Tuesday and Thursdays and was selling so many bats, he would bring me the triangle UPS box that actually fit a bat perfectly and deliver me free boxes and then pick up the bats. And he thought my dad was running a business. He’s like, man, your dad’s business is really doing well. I’m like, yeah, he’s crushing it, man. It’s cool. And I was just flinging backs out the garage. But this idea of I remember just communicating to people I didn’t know reputation on eBay and the stars, and I had a power seller award. And just meeting people all over the world to me was this fascinating concept from a guy who was from Bartonville, Illinois, who really like I didn’t really have a lot of people around me who went to college or even talked about college or didn’t really feel like I had a lot of opportunity or people were doing things that I found to be really inspiring. And then the internet, I found all these people just and got connected, all these people that were really inspiring to me. And that led me to just keep messing around on chat rooms and then the eBay forums and then meeting people through that. And that led me to about 2004 or 2005. I was in college, and I was emailing people. And I just got on Facebook and I was like, I wonder if I could build a script to get a Facebook photo to show up on top of email. And this idea of making email social or making email more human. So I knew who I was talking to because I saw the internet as a way to connect with people. But back then, people saw the internet as like strangers and you kind of don’t meet people online in the real world. And just kind of belief of you can build trust online and build real relationships and have real connections led me down the path of social and then social CRM. And then my first company was called gist.com, which was the first company to ever aggregate all of the API data out of Twitter, Facebook, LinkedIn, etcetera. And then we got acquired by BlackBerry and all of that kind of path, I never really thought about I’m doing a startup or companies. It’s just like my curiosity was just about meeting people and building relationships and I was inspired by the people I was meeting online. But then when BlackBerry bought us in 2009, that was the moment I saw BBM. And when I saw BlackBerry Messenger, it was like a light bulb. And that was when I realized, oh, this is how everything should be. I should talk to businesses this way, I should talk to all my relationships this way, this is how I should talk to groups and forums. And it’s more intimate. I have like a presence, I can see if they read it all these little nuances that made it more intimate and more connected. And that to me was the moment.
Matt Zahab
Wait, Shane, sorry to interrupt you. Was BBM the first one to really like because again, I’m 28 right now, so I was using BBM in early high school, end of sort of middle school kind of thing. And then once I got to uni, it was just strictly iPhone. You were a loser, you had a BlackBerry kind of thing. But was BBM the first one to really blow up the sort of instant messaging phenomenon?
Shane Mac
For mobile. Before that SMS happened right in T9 word, etcetera. But BBM made it an intimate experience. Like the double check mark on WhatsApp that? I knew Matt was present while I was there, and I could see that he read it. And that webhook actually allowed me to do that. They made it cool and they made it where you wanted to be on BlackBerry because of BBM, which actually was the demise of BlackBerry. And so when we got acquired, our goal was to rip out BBM and give it to everyone in the world and make it non proprietary. But because BBM sold phones, every time it went to the executive team to rip out BBM and make it non proprietary, they were like, we can’t give away BBM. That’s why people buy a BlackBerry. And ultimately, they went from 90 billion to three. And WhatsApp happened and it was the largest, kind of fastest growing messaging app in the world. And it was actually BBM had the same vision.
Matt Zahab
That is insane. Yeah, this is just bringing back so many flashbacks.
Shane Mac
I actually have on my back right here, I have the original BlackBerry Bold that they gave us when they acquired us. And they walked in and they said, everyone in the world wants a keyboard. And it’s my reminder of how wrong people can be.
Matt Zahab
So did you fly up to because again, BlackBerry’s, I believe the HQ is not too far away from me in Toronto, in Hamilton. Do you ever fly up to Hamilton meet Jim Balsilli?
Shane Mac
Never met Jim Balsilli. TA who was the CEO just did, for sure.
Matt Zahab
Right. Wow, what a story. So, I guess before we jump into XMTP, I’d love if you could tell a couple more stories about working with Facebook and Apple and the other big dog companies and how you’ve helped them create messaging protocols.
Shane Mac
For sure. I mean, Facebook, we were messing around in 2013, my co founder was the founder of Geek Squad, Robert Stevens. So I met Robert I met him on the Internet and he was like, I’m going to move to San Francisco. And we were just chatting and I was like, this is the CTO of Best Buy for ten years. And all he does is talk on Twitter about how Twitter DMs and messaging. Like, in 2008, he was the first brand, Best Buy, fortune 50 company, first brand in the world to move their support onto Twitter DMs like, that’s how much he believed he did that in 2008. And so I saw this guy, and I’m like I’m like, he sees the future. And we just kind of really connected on that. And so we got together, we were building a company called Assist. And actually, where Assist started did was an SMS chat bot in 2013 that would allow you to, without a human text it and get anything done, buy flowers, book a hotel, book an airline, book a reservation. So we integrated resi and hotel.
Matt Zahab
ChatGPT.
Shane Mac
Yes. If we would have had ChatGPT, it probably would have worked. But the thing is, it actually did work. And what happened was Robert came to me and he’s like, hey, the future is language in words. Talking to APIs, language is actually the global translator of everything in the world. So if we can be that, then every API in the world can talk to each other and all these complicated systems actually go away. And it’s kind of what’s happening now with ChatGPT and plugins and everything. It’s kind of funny to see it a decade later. But what he said to me at the time was, let’s pick a few simple use cases. And his two use cases is were 1-800-flowers and Great Clips, because he actually got his haircut at Great Clips, not because it was a good haircut, because the queuing system was so efficient that he could schedule online and walk-in in 13 minutes and get a haircut and be out in 10. He didn’t even care what his hair looked like. He just cared about efficiency. Like, that’s the kind of person he is. So we integrated these 23232 you could text CUT. You text CUT, it would say the next closest one to you right now are these three Great Clips. And you can get a haircut in 13 minutes, 16 minutes, 19 minutes, and you would text one. He walked into the store on the screen, Robert Stevens, and we did it all via the bot. And so I was like, shit. It felt like the future. We were ten years ahead of it, but it felt like the future. And at the same time 1-800-flowers wouldn’t give us an API because they were a closed company. So we integrated like florist one or some API, whatever. We put it out there Tecron wrote an article, you can order flowers via the spot. The CEO of 1-800-flowers sees it and goes, I want that. And so we get a call, and it’s the VP of marketing, this guy named Tony Velato. He actually invented Cyber Monday. He created that concept why was that 1-800-flowers. And Tony Velato calls and he goes, hey, we want to just pay you. Don’t tell anybody, but we want you to make this bot you did this little flower bot for us at 1-800-flowers. And I was like, we weren’t even enterprise. We were kind of a consumer app. We’d raised a little bit of money. Angel of money was four of us in a room, and we work in SF on 25 Taylor Street. And he’s like, how big are you guys? I’m like, we’re less than 50. We’re not that big, but it’s fine. I’m just kind of like one, trying to figure it out. And Tony said, okay, cool. And I’m like how much you got, Tony. He’s like, 70 grand. I’m like, 70 grand? Fuck. We’ll build you. Yeah, sure. Sounds good. We’ll build it. And so we build this bot. At the same time, Zuckerberg’s getting ready to launch Facebook Messenger Platform 2014. And they hear about the flower use case somehow, probably the article, whatever. And then I get an inbound from Brian. I’ll never forget this guy Brian, and he was the head of platform partnerships. And he’s like, we want to show commerce on messenger. So without a human sell something fully automated, flowers are the perfect use case. And I was like, well, I have the perfect brand. So I walked into 1-800-flowers, and I was like, hey, we have an opportunity to be the story, the Zuckerberg story. And I think this is a huge opportunity because the future of business messaging is actually going to be on Messenger and WhatsApp, and Apple Business Chat and SMS, etcetera. And the business is going to move to conversational, not websites we all believed, etcetera. And then 72 hours before F8, we’ve been working on it for about six months. We had no commitment from them that it was going to happen. Zuckerberg calls and says, hey, do you think the CEO of 1-800-flowers will care if I say you never have to call 1-800-flowers again because now you can just text. And I was like, I don’t know, probably not. But he is a phone number as a company, so he might care. And the CEO is awesome. And he’s a friend till today. And he was like, Shane, I’m always in the business of disrupting ourself. Our whole company is built on being first on the next wave. We were the first company in the world to sell something on a 1-800 number. We were the first company to sell something on CompuServe in 1993. And we want to be the first company to sell something with a bot on messenger. And kudos to actually the CEO, Jim. He is incredible. Him and his brother. And Chris McCann was actually the CEO, Jim’s brother. And Chris was like, let’s do it. He flew out. Zuck does it, goes on stage, and he’s like, you never have to call 1-800-flowers again. Now you can do it all on messenger. And being a part of that, I remember the 72 hours they called they sent in a whole QA team and they were like, we’re going to run 10 million tests against this thing and see if we can break it. And everything was breaking. The morning of the APIs are breaking. And it was a shit show. And then it launched, and it was the first ever commerce ever done on a messaging app in the world, I think. And it kind of led to the next six, seven years of being CEO of that company.
Matt Zahab
Such a cool story. What was Zuck like?
Shane Mac
I wasn’t working directly with Zuck in that meeting. In our interaction, like, his whole team was just like, Zuckerberg wants to know if he can do this. I’m like, okay, yeah, for sure Zuck can do that. I mean, it was like, we would do whatever.
Matt Zahab
Of course. And was it cliche classic Facebook move fast and break things. Like, were they just buzzing like there’s no tomorrow?
Shane Mac
I don’t know if it’s move fast and break things. They were kind of going through an evolution at that time of like, move fast and make sure it doesn’t break, I think was their new motto or whatever it was. But always kudos to him, man. I mean, the speed at which they executed that and crazy times on our end as well. Being like one of their top three partners to kind of launch all that stuff was wild. And the amount of things we built over that time, I mean, it’s funny because it’s really all happening now because the large language models really didn’t exist yet, and the amount of data and the infrastructure and the money to be able to build chat bots at scale wasn’t there. And so the struggle was in all of the technology is coming together at the right time and I think messaging was actually ahead of the chatbot technology.
Matt Zahab
Very interesting. Let’s jump into the creme dela creme of the show, and that is XMTP. Before we do that, we have a huge shout out to our sponsor, PrimeXBT, longtime friends of cryptonews.com, who offers a robust trading system for both beginners and professional traders. Doesn’t matter if you’re a rookie or a vet, you can easily design and customize your layouts and widgets to best fit your trading style. PrimeXBT is also running an exclusive promotion for listeners of the Cryptonews Podcast. After making your first deposit, you get 50% of that first deposit credited to your account as a bonus that can be used as additional collateral to open positions. The promo code is CRYPTONEWS50. That is CRYPTONEWS50 all one word to receive 50% of your deposit credited to your trading account. And now back to the show with Shane. So Shane, those stories you told are some of the best stories that have ever been told on the Cryptonews Pod. So kudos and huge shout out to you. That is you got my hair standing up little there. That must have been just absolutely electric. I love electric stories.
Shane Mac
The Apple story is actually better, but I can save that. We don’t have to.
Matt Zahab
Oh, tee it up. Give us the Apple story, then we’ll get into XMTP.
Shane Mac
No, we’ll we’ll save that for the next one. You can’t, you know, save a few stories for next time.
Matt Zahab
You got it. We’ll save that for the next one. So, XMTP, you’ve obviously you worked with Facebook Messenger. You worked with 1-800-flowers, Apple Business Chat, Google Business messaging, SMS. You’ve done it all in messaging. Why the jump to Web3?
Shane Mac
To me, it’s just a jump to messaging. I’m just doing exactly what I’ve always been doing. But the question was for me, is there a way to do it better and a way to do it different that changes the relationship between developers and protocols. And after 15 years of building in Web2, I’ve been spending 15 years getting rugged by Web2 every single time we made an innovation. Working with facebook was amazing. Till they changed the API till they changed the business model till they changed the feature till they forced us to do things till they didn’t tell us that things were going to change till Twitter cut us off from DMs till Twitter cut all the features. Wouldn’t let us do things for support. Started charging us $400,000 out of the blue for no reason. Cut out all the other partners, killed all the applications, and the entire ecosystem blew up like that’s the last 15 years of Web2, the reason I was wanting to keep working on messaging was, one, was there an opportunity to build a new protocol, and that usually follows, is there a new identity? So when I really was talking to Matt, my co founder and I lived in San Francisco for ten years, and you just from osmosis, you’re around people building in crypto and hearing it all, and my smartest developer friends are building really interesting stuff, a lot of hype cycles. But then, like, the real builders just keep building. And this idea that there was a new identity getting created that your private key could own, and actually, that shift would allow you to own digital items, own your identity, own your data, own your assets, own your communication. When I started to see the DeFi stuff and then the NFT stuff, I was like, maybe the wallet address could be a new identity. Maybe you’ll be able to map identities you own to the wallet address of renting them from Instagram, and then you don’t even own them. And I was like, could that be a new identity? And then if you go back to the history, whenever there’s a new identity created, a new communication protocol has the opportunity to be built. And for me, spending the last 15 years building on top of the protocols. The opportunity to build at the protocol level, to actually be at the base layer, to create a network effect that allowed millions and millions or even billions of people to communicate every day. But do that in a way where it changed the relationship with developers, the opportunity for all of us. And the reason I’m even doing this, if I think about doing this for the next 20 years, I mean, I’ve been doing messaging for 15, I just keep doing messaging. For me, it’s like my life’s work. I love communication and like, connections and relationships. I’ll just keep doing the same thing. I don’t want to start over. So if I think about it from a longevity perspective, we have to create a better relationship in which developers are part owners of the protocol. They have the power and the feedback and the voting and the governance and the economics in it. And to change that paradigm, it’s not Web2’s fault. The business model wasn’t there to actually create a new relationship. So now, if the incentives are actually aligned, where protocols can be aligned with developers, and we can enable thousands of developers and applications to be built with the protocol, that future for me is so much more inspiring than the pain we all went through the last 15 years.
Matt Zahab
In that little monologue you just had I could sort of almost feel like your pain from being rugged so many times by Web2.
Shane Mac
It’s not even anyone’s fault, though. The business model wasn’t there and it didn’t exist, and they had to do it. They needed eyeballs. Advertising was the business, and the application layer had to get cut off because they needed to bring everyone back to their apps. And there was no incentives at the protocol level to actually have governance and voting and ownership from the whole community. Which is now enabled by Web3. For me, I say we’re a communication company, not a crypto company. Crypto, though, enables a new ownership mechanism by which we can build a communication company so that we’re not a centralized single company that owns all of your communication data, where everyone in the world, like all your communication data, is all owned by Facebook reading your WhatsApp data. That’s crazy. That’s not how it should work.
Matt Zahab
So true. It’s just it’s tough because at least in my experience, Shane, when I explain this to friends or family or peers or whoever in my network that isn’t in the space, I’m someone who always blames myself for good and bad. It’s probably my problem and my issue. I’m the one to point the finger at because I’m not doing a good enough job of explaining why something like XMTP and decentralized communication is so important. But they just don’t get it.
Shane Mac
What don’t they get?
Matt Zahab
They don’t get the importance and the value of decentralized communication protocols and owning your data. For them, it’s just like, well, it’s working right now. Why do I care? And I empathize with their point.
Shane Mac
I don’t think that’s the problem. I actually don’t even think I empathize with them. I don’t think actually most people care about that, right?
Matt Zahab
What is the problem?
Shane Mac
So for a user, right? Ask them this. Here’s my phone. Right? At the bottom of my phone, I have two apps. One is iMessage right? The other is XMTP. Ask them this what if one application could actually communicate to all messaging applications and you don’t have to have twelve on your phone?
Matt Zahab
That’s the value prop. That’s the business solution, where it’s like in one single panel. You have your Slack, you have your Gmail. If you have a client that uses Teams or whatever the case may be, you have it all in one single app where you don’t have to keep.
Shane Mac
I mean, go back to the early days, right? It’s like Adium remember that? Remember the Adium little widget on MSN Messenger and it aggregated all your chats, but that’s the value to people. And then you say to follow up with that, all you say is this. And by the way, if you don’t like the app you’re using because you don’t trust them anymore, because you know what, one person can buy one public company and actually read my entire 15 years of DMs, and I can’t take those DMs with me. And if you don’t like the new owner of that centralized company, whether you like them or not, you don’t own that communication data. But the ability to delete that app, the ability to delete that app to not be surveillance by that company, go to another app because your private key is your login, not their servers, and take your conversations with you is a fundamental shift in the world. And most people actually these days, especially like right now, with everything happening in the world, they do understand what being surveillance by technology companies mean. And I think it actually matters to people. But you have to focus on the value first.
Matt Zahab
I’m full disclosure, I’m going to steal your point. That’s bang on. And I agree with you. Every month that goes by, I feel like people are more cognizant of the shit show that’s going on with surveillance and privacy and everything else, and not owning your data, not being able to transfer your data, not being able to have the workflow that you want on these messaging apps.
Shane Mac
And it’s out of your control, right? It’s out of your control. And the goal is to move control more to the individual, right? And then build the systems to help protect them. And that’s it.
Matt Zahab
Bingo. And that’s a big paradigm shift that’s currently happening. Let’s jump into XMTP. Let’s start with give me the elevator pitch, and then we’ll get into all the ecosystem topics and the core beliefs, how you guys stand out from your competitors, the integration with unstoppable domains, which is huge, by the way, but yeah, give me the sort of the TLDR, and then we’ll get into the nitty gritty stuff.
Shane Mac
Yeah, I mean, we’re the largest and most secure messaging network for Web3, and that’s really where we’re at today. In the future, I just see us as a decentralized messaging network that helps everyone in the world and any identity communicate in a secure and verified way with each other.
Matt Zahab
And walk me through use cases. So pretend it’s me, someone who obviously understands crypto. I download XMTP, I grab my private key, and now my conversations from various applications are all housed in one place.
Shane Mac
Yeah, but go to, like, a problem statement. So imagine you’re part of a community, and you own an NFT of that community, or you’re a token holder of that community. So you have to vote on a DAO when you’re on Snapshot and you want to send a notification for all your people to vote, the ability to see everyone who owns the token send to that wallet a message. That person gets the message and actually can vote from any application that they’re in or go back to Snapshot. That kind of loop of retention, I think, is the problem today. The problem today is very simple, and this doesn’t maybe not feel like a huge problem, but it’s a really big problem in Web3, which is you can see everyone’s wallet address who owns something that’s part of your community or part of your DeFi protocol, and you can’t reach them. And that’s the core value of today, is you can actually message a wallet address that you otherwise could not message. And I think there’s so many use cases in that around retention for applications for creators to message NFT holders, for NFT holders to message each other to discover each other. And we see a lot of applications around that kind of use case and really discovery of on chain data that allows you to find, connect and really what I really loved about the internet early on was using reputation and the internet to discover, build trust, and find and connect with people. Now you can do that in a more verified way to know people are who they say they are. And the single most powerful thing we’re doing today is verification that the person you’re sending a message to is the person who owns what they say they own. And all the problems in crypto today not all of them, there’s a lot of problems in crypto today, but a big problem in crypto today is the Twitter DMs, Discord, email, spoofing, scams, etcetera, because I say, hey, Matt, this is my wallet address. You had to send it here, but you don’t know. And the ability to know that the person you’re talking to because the message object is signed by the same wallet that owns what they say they own, is a huge, I think, verification innovation.
Matt Zahab
That’s so true. Yeah. The phishing in crypto is absolutely bananas. And these cons per se, these scammers, they’re getting so bloody good at it, too.
Shane Mac
There’s a lot of work to be done, actually, to protect people, create privacy around that. There’s also a lot of innovation that has to happen with, like, ZK proofs and everything, where I don’t want to actually have to have my identity tied to all of my assets. I want to be able to prove for the right person that I own something, but not let you and everyone see that, and that infrastructure is there. It’s just starting to happen, but it really needs to if we want to take this mainstream. I’m not communicating from shanemac.eth and saying, hey, look at all this Bitcoin I have. That whole fallacy of how crypto works today is not how it’s going to scale.
Matt Zahab
Speaking of the future, one thing in doing research for the show, one thing that I’ve seen you say and write in the past, is that owning messages might perhaps be more important than owning assets. And I’d love if you could take a deeper dive and sort of explain why perhaps the mainstream users aren’t cognizant or haven’t recognized this phenomenon yet.
Shane Mac
Well, how big is crypto today?
Matt Zahab
800 bill. 700 bill.
Shane Mac
People?
Matt Zahab
Oh, god. A couple of million.
Shane Mac
Small, right? Here’s the deal. Every single technology trend. Everyone’s obsessed with commerce as the first use case. If you go to the 90s ecommerce. It’s going to be ecommerce. Email was way bigger. If you go to social commerce, the 2000s social commerce forums, you’re going to be able to buy. Messaging was way bigger. 15 years now, we’re 15 years into assets and currency being the use case. And it’s small because can communication and a change in communication and the human need to connect with people and actually conversation comes before commerce. That’s what crypto got wrong. It’s actually your ability to connect and have conversations and build relationships is the thing that drives commerce in the world. It builds trust. And that’s not how crypto works today. It’s commerce. And you might not know who you’re dealing with, which is a cool innovation because the word trustless, which is a terrible word, but is a powerful concept, the ability to actually use technology to trust someone is a powerful thing that skills trust infinitely. But now to add in communication and verification to that, that’s such a powerful shift that in my mind, owning your communication will be way bigger than owning your assets.
Matt Zahab
Can you give some use cases if you don’t mind? Like in what regard will owning your comms owning your DMs like you’ve mentioned a couple of times, being able to bring over your Twitter DMs or any other social platform DMs. How would that perhaps be more valuable than owning Bitcoin or a house or car or any type of gold or any type of physical or digital asset?
Shane Mac
So if you think about the world as it exists today and how you create value in assets is through audience and connections. So let’s say I’m an artist, right? Even if I made money on album sales. Today I have to spend it all on Facebook to actually reach the people that I spend all this time getting. So I’m actually probably losing money to get reach versus if I own my relationship with my audience because it’s a public ledger of all the addresses that I have that consent to message, and then I can move to any application or take that with me in the future forever. The value of having a direct relationship to send a message to a million people is 100,000 times greater than anything else. That is the thing.
Matt Zahab
It’s like an email list on steroids.
Shane Mac
Yeah, but today you don’t know that your email is landing in the promotions box of Gmail. You don’t know that you built your entire fan page on Facebook, and then Lincoln Park had the number one fan page in the world, and then in 2014 lost all their reach and had to spend millions of dollars to reach them. That’s the game. TikTok is the same way, Facebook’s the same way, Instagram is the same way. It’s literally the game. And that game has to change because your relationship with your audience and how close you are to your customer is the value. What you sell them is the next step. And so if you don’t have that relationship, what do you have?
Matt Zahab
Yeah, no, it’s very true there. Walk me through sort of like the. 5 to 10 year plans of XMTP. And when you see non Web3 folks jumping on the app, I’m sure there’s already thousands of them, but I mean, like, mainstream Web2, Web2.5 folks jumping on XMTP to join the decentralized comms protocol.
Shane Mac
I think they never need to know about it. I don’t think they need to know about chains. I don’t think they need to know about XMTP. I think they need to feel like it feels today message is actually pretty damn good. I actually love WhatsApp I love iMessage, right? Messaging is the greatest application on my phone. What has to happen is the use cases let’s take in five years the ability to have a better SMS experience. That doesn’t feel like shit. And I don’t feel embarrassed by a green bubble to have another phone that’s not an iPhone or back in the day, a BlackBerry. Take a use case of if I wanted to be able to message someone who had bought a ticket to a concert. So let’s just say I bought a ticket and I have it on my phone just like it is today, right? And I double click this, it pops up, and I have a ticket to a concert coming up tonight. It’s called Ticks, right? I tap it to you because now you can tap phones and it pops up, and Apple Pay pops up because in the background, Apple Wallet has actually integrated wallet addresses that allow you to transfer digital items. And I say, send it to Matt. Matt then gets the ticket, and it’s $7. It’s $5 to Taylor Swift because it goes back to the creator, and it’s $2 to pay the fee. The USDC changes into ETH, goes into polygon, whatever. All the shit happens behind the scene. I pay a $7 fee, I send the ticket to you. There’s no ticketmaster in StubHub taking 25% of everything, and the artist gets paid. That’s going to take a while. There’s a lot of monopolies in the place. But just take that use case. How does the artist then know to communicate with Matt? The only thing you have is a record of wallet addresses and the ability to reach any wallet address in the world that resolves to identity. And I actually feel like what’s going to happen is iCloud and Google Cloud are going to actually expand, today it’s your phone number and your email, and then it’s going to be matt.eth or whatever your identity is. Or your email actually can just be the thing that maps a wallet address with account abstraction happening and all this stuff you might never have to know, but your ability to actually have a world class messaging experience inside of iMessage. Imagine it’s a black bubble, not a green bubble, and it has all the capabilities of the blue bubble, but it’s fully interoperable. It can communicate to Google. Applications can communicate to you. Taylor Swift can send a message to all ticket holders to the show tonight. It ends up whatever application they’re using. And that’s really where if you can have a decentralized messaging network that has premium in modern messaging features, because there’s also economics that allow us to keep building and improving the protocol as an ecosystem and the trust to build with it, because it’s not going to cut you off or change it, etcetera. All of a sudden you can imagine a world that replaces SMS way down in the future that actually allows people to reach people based on what they’re sending each other. Things they own, tickets they own, assets they own, etcetera. The ability for identity to map to any wallet address. Consumers might never have to know. They just are excited that now their iMessage thing can communicate to tons more things. Or their WhatsApp thing can communicate to tons more things. And if you go a little further, any identity in the world should be able to communicate with each other. So with account abstraction today, a Twitter handle could communicate to a phone number via XMTP with modern messaging features because of the way it’s built. So account abstraction gets a wallet address. The wallet address allows the routing. But my Twitter handle is my identity. Your phone number is yours. But now we can have world class messaging that isn’t the shit Twitter DMs that are unencrypted that I don’t want to use. Wow, that’s cool. And that can happen today. And so I actually feel like on the consumer experience, they may never know, but they may just be like, wow, I can communicate to so many more identities that I never thought about.
Matt Zahab
I love that one point you keep bringing. Yeah, the identity point on the front end. Shane, like, what do you think the front end is going to look like for, you know, the future of messaging?
Shane Mac
I have no idea.
Matt Zahab
You guys partner with Unstoppable Domains, which is obviously a huge step in the right direction, but that’s something I really think about. Is it going to be a microchip in my wrist? Is it going to be matt.eth? Is it going to be mattzahab.apple, mattzahab.fb? What the heck is the future? How are we going to talk to each other? What’s going to be that front end thing that picks and quantifies human A versus human B? If you were to take a bet, give me your hot take.
Shane Mac
I believe it’s whoever people trust, and it gives them a sense of status and purpose. And so what’s interesting about what’s happening, Unstoppable Domains is a good example. Unstoppable Domains has tons of domains, right? If there’s anything true about the human race, it’s our need to differentiate and be unique and think we’re snowflakes, even if we’re not, is going to be true forever. So in that case, what this allows is actually different is that we don’t all have to have an Instagram handle that looks the same with an ad sign. It’s that we can all have infinite identities that all map to the same mechanism of a wallet address in a private key. And so the future actually looks very different. I’m actually shanemac.titleist. You know why? Because I’m a fucking golfer, right? Actually, every brand can become identity, and people are becoming brands, and everything’s going to shift because now you can own the name, not rent the name. And when you can own the name, Unstoppable Domains is a good example. You have infinite domains. I’ll be like shanemac.polygon or shane.crypto or whatever. I actually think that the future might look like these sub communities and these culture pockets. And if I email someone today and they have an AOL email address, I judge them. I’m like, yeah, you should probably update, you know what I mean? You should probably get into 2023. But that might be the future is actually the infinite amount of identities allows for these subcultures and groups and everyone, but they all can communicate in the same way. And so identity mapping to messaging versus the platform, dictates identity is actually a pretty fundamental shift that could be a fascinating thing. And we’re identity agnostic. So in this case we just want to make sure that every identity in the world can reach any other their identity. And the explosion of identity I actually think is one of the most unique, cool and powerful things that’ll play out in an interesting way. And I think brands are probably going to play here too. If I was Dot Swoosh, I’d be like, yeah, shanemac.swoosh. I’m a Nike fan. I’ll use that as my identity. Right? And I think it’s actually going to play out where your affinity is actually the thing that drives your identity.
Matt Zahab
Yeah. Wow, so many interesting points. Shane, I know we’re getting a little tight for time here. You’ve been incredible. This is just a phenomenal episode and you’ve taught me and the listeners a shit ton, so thank you. A couple more things before we wrap up something you brought up a couple of times that full disclosure I’m going to steal from you is when I ask you a question or bring up a point, you provide the problem and then the solution. This is something that I feel like everyone should do. It just it allows the user or listener or person to put their feet in the problem shoes and then really, I feel like, understand the situation more, especially when we’re talking about something complex like Web3 and messaging. Where did you learn that? Who taught you that? Where did you read it? And why do you use that so much? I love it.
Shane Mac
It’s a good question. I’ve always been a person just obsessed with making things simpler and everything just feels so complicated and then when people are pitching me, etcetera. But I think the confidence around focusing on smaller things to find specific problems came from my old co founder, Robert Stevens, who was the founder of Geek Squad, CTO, Best Buy, and you know, he’s this big, you know, like, oh, Geek Squad, Best Buy, huge companies. And he would sit next to me and he would listen to me and I would say these, you know? Just grandiose things like, oh, messaging is bigger than Search. I would like all these ego chest pumping, just trying to validate myself, trying to speak bigger VC, talk bullshit. And I was like saying all these and he’d be like, hey, the secret is actually to think a lot smaller, to then be able to go bigger. And he gave me the confidence to just focus on a smaller problem and then a smaller problem. Then ask, is this small enough? How is this simple? Can I say it in one sentence? He was like a Nasdaq ticker. He’d be like, if I can’t say it in three words, I’m out. And him next to me. I think it wasn’t about the training of how to say it and what to do, whatever. It was about giving me the confidence of my insecurity to be able to actually do that. And without him sitting next to me, I was sitting there trying to just oversell and overvalue. You just keep wanting to say bigger shit when actually you’re just confusing everyone. And for me, the ability to just be like, listen, we’re not actually doing all this crazy stuff and everyone’s like, it’s so hard. One of the problems with crypto, I feel like it’s like a pride on your shoulder of how hard it is they’re like difficult because we can figure it out. I’m like, it’s not a badge of honor to say like, I figured out crypto. It’s an embarrassment. It should be much easier and much simpler and there’s so much work to do and the applications need to be so much better and the onboarding needs to not suck. It takes me to 3 hours to get my dad onto one wallet. Like it’s crazy. And so for me, not letting that ego or lack of self awareness be this thing where I’m like, no, it’s great. It’s great being like, is it great? How is it not great? Why does this suck? And having that actually self kind of reflection and the ability to be confident in that, to know that. We’re not there yet, but we will get there. I think is actually more about self awareness and confidence and believing in yourself. When you have people around you to help you do that, than it is about learning a skill. Because I think it’s the overselling and the grandiose things that actually lead us to a place where we’re blind and it creates the blind spots where we think what we’re doing is amazing. Why does no one use it?
Matt Zahab
Yeah, well said. A lot of the greatest thinkers and builders and just people of our generation are incredibly good at taking complex as fuck topics, pardon my French, and distilling them into very simple things. One of my favorite acronyms, KISS. Keep it simple stupid, right? It’s like take something very complex, break it down, let the end user or anyone understand that. We love to see it. Shane, this has been an absolute treat man. I learned a ton, had a blast, got some good homework to do. I love the stories. Can’t wait to have you on for round two. We got that Apple story hot and ready. Huge shout out to you and the team for jumping on here. But before we let you go, can you please let our listeners know where they can find you and XMTP online and on socials?
Shane Mac
Totally. I’m at @ShaneMac on Twitter and we’re at @xmtp_ on Twitter for XMTP. xmtp.org is our site and all of it’s open source. So come build with us. Come join the discussions, come join our Discord. We want to communicate with everyone and we’d love to meet more developers to build messaging with. Excited to talk to anybody.
Matt Zahab
Love that. One last thing. During the you kept bringing up Taylor Swift in a concert tonight. Is there a T Swift concert in Nashville?
Shane Mac
No, it was a few weeks ago. And I just sketched out that exact flow of how a digital ticket can flow without a third party kind of taking all the fees and what would have to happen underneath that. But how could the consumer experience not change at all. And what will have to happen in the next five to seven years for that to happen? And then how does communication play into that? So I just kind of like, mapped it out based on that use case. But if there was a T Swift concert tonight, I would be going.
Matt Zahab
I know that I asked me and a couple of my buddies were looking at the tickets in Toronto. They’re like, $800. These Swifty girls are just bonkers.
Shane Mac
It’ll be the best show you go to in probably ten years. So you as well just spend it.
Matt Zahab
I know she’s a rock star. Shane, thank you so much, man. Truly a treat. Really appreciate it. Can’t wait to have you on for round two. Best of luck to you and the team. We’ll keep in touch.
Shane Mac
Hey, Matt. Thank you.
Matt Zahab
Folks what an episode with Shane Mac. Absolutely dropping knowledge bombs left, right and center. Some incredible stories, anything comms and messaging related Shane Mac and his team are your guys and gals. Please do go check them out. As always, I will include everything in the show notes. If you guys enjoyed this one, and I hope you did, please do subscribe and give us a nice five stars. It would truly mean the world to my team and I. Speaking to the team love you guys so much. Thank you so much for everything. Justas my amazing sound editor. Appreciate you, as always, and back to the listeners love you guys. Keep on growing those bags. Keep on staying healthy, wealthy and happy. Bye for now and we’ll talk soon. Ciao.
