ICO Spotlight featuring Bob's Repair

Expert Interview with David Weild, former Vice Chairman of NASDAQ

More ICO Insight

More ICO Insight


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ICO Insight Transcript


 

Adam Chapnick:

Hey everybody, I'm Adam Chapnick

Amy Wan:

And I'm Amy Wan. Thanks for joining us. ICOInvestor.TV is the first online video platform dedicated to ICOs. Plus, you have access to legal and investor round tables, interviews with ICO experts, a global regulatory review, and the ICO Learning Center. It's all at ICOInvestor.TV.

Adam Chapnick:

Coming up on today's episode of ICO Insight in your ICO and crypto headlines: Overstock.com's cryptocurrency payment problem and an update on telegrams giant ICO and Bob's Repair, you heard that right, Bob's repair is in this week's ICO spotlight, how they're using the blockchain to help the home repair industry, and we'll take you to the Big Apple for the Crypto Monday meetup at Bagatelle, New York. That, and more, is coming up on this episode of ICO Insight.

Amy Wan:

Now, let's take a look at your ICO and crypto headlines. We begin with your cryptocurrency investing needs and a big glitch for online retailer, Overstock.com. The glitch the customers pay for items for either Bitcoin or Bitcoin Cash, interchangeably, but both have different valuations. Bitcoin is worth around $11,000 and Bitcoin Cash is worth about $1,700. Customers who paid with Bitcoin Cash and requested a refund were paid back in Bitcoin, basically giving the customer more money than they actually paid. The company fixed the bug and issued this following statement: "We were made aware of an issue affecting cryptocurrency transactions and refunds by an independent researcher. After working with the researcher to confirm the finding, that method of payment was disabled while we worked with our cryptocurrency integration partner, Coinbase, to ensure they resolved the issue. We have since confirmed that the issue described in the finding has been resolved and the cryptocurrency payment option has been re enabled."

Adam Chapnick:

Now to South Korea, where anonymous cryptocurrency trading has ended. The South Korean Financial Services Commission said banks will launch a new system that lists real names of customers who are trading cryptocurrencies to help curb speculation and criminal activities. Anonymous transactions will now become traceable. The Commission has asked financial institutions to also step up their monitoring of the virtual currency sector. By the way, you can view the latest ICO regulations from around the world on the Global Regulatory Review on our website, ICOinvestor.TV.

Amy Wan:

In your ICO investing needs, an update on Telegrams titanic ICO, you may recall we first shared the news of their ambitious billion dollar ICO plan two weeks ago. Now, the company wants to raise even more money in their ICO; two billion dollars, to be exact. That would be the largest ICO offering in history. Eight hundred fifty million would be a private sale to investors with 1.15 billion in a public ICO sale in March. Telegram is creating a payment platform using block chain technology. The messaging service is widely used as a hub by the cryptocurrency market.

Now, to the upcoming token launch for Polymath. It's set for January 31st, those who are registered for the air drop and completed all verifications prior to January 10th will receive free poly tokens. Polymath aims to be the industry's first security token launch pad and just struck the multi-trillion dollar securities industry by creating an open platform that gives global businesses access to the block chain, smart contracts and token creation technology. The platform helps to form the basis of security tokens. Polymath's mission is to become the open-source standard for launching securities tokens. You can learn more about Polymath online at Polymath.network. We will have more in their upcoming launch here at ICOinvestor.TV.

Adam Chapnick:

Now, it's time for this week's ICO spotlight. This is where we'll introduce you to a company that's planning to launch or already has launched an ICO. Bob's Repair is in this week's ICO spotlight. Their ICO presale is currently underway. Bob's Repair is using blockchain to eliminate review fraud and provide lower pricing in the home repair industry through a decentralized platform. Before we hear from the co-founder and CEO, let's take a look at the pitch video for Bob's Repair.

Narrator:

Meet Sarah and Johnny. Their sink is broken and they need a plumber right now. They want someone quick, reliable and someone that doesn't break the bank. Johnny doesn't trust websites, such as Angie's List and Home Advisor because they charge their contractors for leads and advertising, a cost that is later pinned onto the consumer. He can't even trust Craigslist anymore because bug repair companies spend large amounts of money spamming the site with hundreds of fake ads and flagging the small guys' posts. Johnny will instead choose to go to Bobsrepair.com. Bob's Repair is creating a platform that uses blockchain technology to completely cut out the middle man and decentralize the skilled trade industry. Frideric Prandecki and Alexandre Prandecki are brothers that have previously built proprietary SMS API systems handling over 13,000 SMS conversations connecting consumers directly to contractor for a variety of home repairs. They began their operations in Las Vegas in 2014 and have connected over 50,000 homeowners to contractors. Contractors that have transacted over 1 million dollars. They soon realized that the world was heading in another direction and that the skilled trade worker industry needed to be decentralized.

The skilled trade market is filled with fraudulent reviews, bias listings and websites, and large repair companies that over charge people for their services. By giving the power of skilled trade back to the people, a local plumber or electrician can provide services to homeowners for up to 75% less than the big guys. We will implement the 50,000 customers from our previous operation into Bob's Repair and aggressively expand into the top 100 cities in the U.S. market before launching worldwide. The ERC-20 BOB Token is the investor's stake in Bob's Repair. Fifty percent of all quarterly profits will be used to purchase Bob Tokens on the open market and then burned. This ensures that the value of Bob Tokens grown over time as Bob's Repair grows through the United States and internationally. The Bob's repair trusted reviews application and voting on smart contracts will be built on top of the STEEM blockchain, a blockchain that has no transaction costs and a three second block time. Also, Bob's repair will be offering escrow services through smart contracts. We want you to be apart of Bob's, the Uber of skilled trade workers, as we capture a 400 Billion dollar market.

Amy Wan:

I caught up with co-founder and CEO of Bob's Repair, Frederic Prandecki, to find out more about their company and ICO. Take a look:

Hi, Frederic. Thanks so much for being here today.

Frederic Prandecki:

Thank you, Amy, for having me.

Amy Wan:

So, first, how about you tell me a little bit about your ICO presale. When is the ICO sale going to begin?

Frederic Prandecki:

Our presale started on January 4th and we end on February 4th. Until now, we;ved raised around 3,200 Ethereum. We actually have an investor committed for 1,000 Ethereum, which will be announcing it today or tomorrow, so that's a nice crypto fund. Our goal is to raise 6,000 Ethereum. When we started our ICO, were offering a 30% discount or onus and now we're at a 23% bonus, which is still a great discount, and then, we're going to take a couple of weeks off and we're going to be working on our prototype. We are a security token, which means that we filed the exemptions with the FCC. We're doing a regulation D506C and then a Reg S, which means that our U.S. investors have to accredited investors and then, our non-U.S. investors don't have to be accredited. Anyone can invest other than places where it's illegal to invest in ICOs, but we're very close to hitting our soft cap, which, soft cap means that if we need to hit a certain amount of money in order to continue with our ICO.

Initially, when we started with our hard cap of 30,000 Ethereum, Ethereum was at 3-400 and now it's at 1,000, but the amount of traction that we've been getting from the community, our Telegram channel now has 7,000 users. On Twitter, we're getting about 8.5 million impressions a month, so we feel like we're getting a lot of good feedback from the communities. We're keeping our soft cap and hard cap the same and with John McAfee behind us, and a couple other advisors like Steven, the CEO of Rivetz, so we feel like we have an extremely strong team, including our new CTO Brandon Kite, who was a senior engineer for the Walt Disney company and he was a lead developer of DragonChain.

Amy Wan:

Great. So, your ICO lists a token referred to as "The BOB". What function does your token actually serve and do token holders get any equity in the company?

Frederic Prandecki:

Yes. So, we're a security token. So, the utility of our token is that we are a ERC-20 token and what we're doing is we're selling 50% of our total token supply to the community and their getting 50% of the company's profits. So, every time they buy one token, it represents a small chunk of the company's profit. It's very exciting, it's very different. Ninety-nine percent of the tokens don't have very much value behind it where we're actually giving profits to our token holders, so it's different, but exciting.

Amy Wan:

Yeah, that's really interesting and I think you bring up a really good point. So, what sparked the idea for Bob's Repair?

Frederic Prandecki:

So, in 2014, my brother and I were living together and our A/C unit broke and we ordered a bigger company. The guy came in with all of his gadgets, the big car and he's going around measuring stuff and after about 25 minutes, he says that our A/C completely shot, it's done, we need a new one. He said "Hey, if you pay $5,000, you can get this new A/C", and we're like "This doesn't sound right", so we had this gentleman , Nick, he was an independent guy, he was barely making ends meet. He came to the house and after 15 minutes, he said "Hey, Fred", and I kind of felt stupid, he's like "Your air filter's dirty". He changed it out, boom, cold air is blowing and then we realized there's this huge issue. You don't know who's good, there's a lot of review fraud, everybody's price gaging.

As we service 55,000 consumers, we look back at that initial quote for about a two and a half ton A/C unit, the guy wanted $5,000-$6,000 and, in reality, he should have only charged us $3,000, so we really found a big flaw in the space. It's been exciting with Nick, we started getting him jobs, he was our first guy. We helped him get licensed, insured, he was almost getting evicted from his home. All of a sudden, he was making good money. We're charging him a small amount for leads at the time. We just saw this big issue in the space, we were fixing it and then with block chain, we realized that we could use block chain for a real case scenario.

If we could tackle review fraud, we could tackle pricing transparency and if we could offer a decentralized marketplace where the user could go in, look at 1,000 jobs, see how much the labor costs, see how much the materials cost, see how long the jobs cost. Also, this marketplace is not going to charge the contractor for leads. Right now, with Home Advisor's doing, or Google ad words, is complete robbery because they're charging the contractor $25-$50 to even $75 per lead and Home Advisor is charging three guys for the lead. They are fighting it for the consumer, then, when the consumer pick sone person, those fees get pinned on the consumer and all of a sudden a simple toilet fix that should be under $100 cost you a couple hundred dollars, so there's a big problem in the space.

Amy Wan:

Can you actually explain for me a little bit how you're using blockchain to fight review fraud?

Frederic Prandecki:

Yes, let's just use a simple case scenario. When the job is complete, our reviews are going to be tied to the transaction. The Bob application eco system is going to be built on top of the STEEM blockchain. The reason we took STEEM is because there's a three second block on no-transaction fees and its one of the real use case scenarios of a blockchain. We're going to store our review on the blockchain, which means it can never be altered and it there for the whole public. A lot of the times with Home Advisor, if you complain, they're going to take down the review and you really don't know what's real and what's not. Here, the consumer rates the contractor and the contractor rates the consumer, so it's right there, it's open to the public, people can see it on the block. There's a chain, so it's all connected to everyone. All of a sudden, a contractor has to really watch out what he charges because if he's price gaging, that's going to come out right away. Eventually, there's going to be thousands and thousands of jobs and we have 55,000 job completed, which we can go back and post that. It's really going to disrupt the space.

Amy Wan:

Interesting. So you're White Paper mentions revenue being earned through the STEEM blockchain and escrow services. How exactly is that all going to work?

Frederic Prandecki:

We're going to earn revenue in three ways. The first thing is going to be meta data. All these contractors are going to go to their consumers. The contractor, for example, needs a lot of help getting credit cards, he needs help with getting licensed, insured. So, there's a plethora of things that we can do for the contractor because we've already done it in the past with our current ones. It's like a freemium place, like Credit Karma, we're gong to help these people in the next step, so that's going to be one.

Number two is we're creating an escrow service, which we're going to be taking one 1.5%. There's a big issue in the space where if you do a bigger job- on a smaller job, I don't think that's going to be an issue, but if you're remodeling a whole home, the consumer does not want to pay the contractor everything ahead of time. A lot of time the contractor would get shafted where he's almost done with the job and there's a disagreement, so it's going to be released based on milestones. The consumer's going to have to make the deposit, contactor, once he's done x, he's going to get this amount of money released and then they're going to get to the end. Then, with the STEEM blockchain, there's uploading, downloading, contributing to the network, it generates revenue into the STEEM blockchain. It's a very neat community. There's about 500,000 members on there, it's open source, so we're going to build on top of that.

Amy Wan:

Fantastic.

Frederic Prandecki:

So that's where we are.

Amy Wan:

So, how about customer complaints, refunds? Is Bob's Repair going to handle their services when things are not correct or unsatisfactory?

Frederic Prandecki:

With the escrow service, yes. With not an escrow service, this is a decentralized marketplace. The contractor and the consumer, all contractors have to abide by the laws in every state and every country. Imagine this is a decentralized place, so these reviews are going to shape each other out beachae if somebody does a bad job, there's a bad review. The community is going to upload and download, so all of this is going to be self- managed by the community.

Amy Wan:

Interesting. So your roadmap lays out a timeline that shows Bob's Repair app launching in quarter four in 2018. Is your team currently on track to meet this deadline and what happens if you don't?

Frederic Prandecki:

We're a security token. In a utility token, you have to have a ready platform. As a security token, you do not have to have a ready platform. With that said, we gave ourselves a significant amount of time to develop this platform. We are going to have a web-based application, we are going to have an app, and also, we're going to do a lot on SMS API because a lot of our contractors don't really have computers. They do have smart phones, some of them don't have smart phones, but gave ourselves until quarter four. We're already starting to work on the prototype. I think we have a sufficient amount of time. We're hoping to deliver it ahead of time. We don't see it as an issue to not deliver our app on time and if you look at our team, we have a great team. We have Brandon Kite, he's our CTO. He's a senior engineer for Walt Disney, he was the lead developer for DragonChain. We have Todd Conley, which you all know worked for Microsoft, we have two amazing Russian coders and also we're thinking about adding more people to the team as we go and finish our presale.

Amy Wan:

Fantastic. Sounds very exciting. What do you see as the biggest challenge you face in moving forward along your ICO roadmap?

Frederic Prandecki:

I think the biggest challenge we're facing is providing an interface, a decentralized marketplace that's really going to resonate well with the consumer because it has to be practical. A lot of people are saying "We're going to this, this and this", but we service 55,000 consumers. We know what they need, but we need to make sure that we deliver something that a regular average Joe who goes on our app or goes on our website, or gets an SMS, they will be able to easily connect with a contactor, they'll easily be able to write a review. It has to be very, very simple. Something that's complicated or takes a lot of time, no one is going to use. I know myself, my attention span is about two seconds, so if it's too complicated we want to make sure it's very, very simple for everyone to use.

Amy Wan:

We wish Frederic and everyone at Bob's Repair the best of luck with their ICO and if you would like to know more about the ICO for Bob's Repair, visit bobsrepair.com

Adam Chapnick:

Now, for some exciting news here at ICOinvestor.tv, the debut our crypto meetup channel. We'll be covering crypto meetups from around the nation and putting those interviews on our website. So far, we've been to Beverly Hills, Los Angeles, Miami and New York.

Amy Wan:

Let's take you to Bagatelle Restaurant in New York for the crypto Monday Meetup. That's when we spoke with Dave Wield, Former vice chair of NASDAQ and founder of Wield and Company. Hear is predictions for ICOs and why he calls ICOs the new "Internet of Ideas".

David Weild:

My name is David Wield and I run an investment bank that we're scaling, it's different model. We took a traditional model that we're growing very rapidly and we have a number of crypto clients, initial coin offering clients, tokens clients, so on and so forth. Our view of this whole market is that it's going to be largely treated as securities offerings and it has been for a while. I saw Mary Jo White, who was the former chair of the SEC in Tokyo, and told her that we were treating everything as securities offerings and she dead panned to me, "you're a very smart man".

I think a lot of people don't have- that are not quite as old as I am- see this as being novel. It's another, what I would call, the fifth way of technology innovation in computer science. It started with a semi conductor, it went to the computer, it then went to the internet, it then went to wireless and now we're going to crypto, which is distributed blockchain. It's going to disrupt many, many businesses it's going to create some massive efficiencies in markets. It will be applied very broadly, but similar to what you see in the emergence of the internet, there's going to be a lot of really dumb ideas that get done that are going to lose people a lot of money, and unlike the internet, a lot of these ideas that are going to get done in ways that are not regulatory compliant that's not going to end well.

We're going to start to see these things come in under the regulatory umbrella and do traditional offerings whether they're Reg D private placements, general solicitation private placements, regulation AIPOs, traditional S-1s, we're going to see these things moderate, but the technology itself is going to create a disruptive revolution in how businesses get done and there's going to be some interesting businesses that emerge from the primordial ooze. Just like Ebay did for the internet or Amamzon.com, there are going to be some amazing businesses that ultimately succeed in what's going to be a Darwinian evolution.

Initial coin offerings or general tokens have more to do with the securitization of equities or utility tokens, things that actually give you a right to invest in an operating business where technology, a software platform, a gaining platform. Cryptocurrencies, on the other hand, are commodities for all intents and purposes and my guess is that, ultimately, they'll be regulated differently potentially. We have CFTC, Commodities Futures Trade- current CFTC typically regulates currencies, commodities and, on the other hand, securities are regulated by the SEC. I think ultimately the majority of things will be tokenize and those will be regulated by the Securities and Exchange Commission and I think they should be.

An ICO, obviously grafted on and took advantage of the IPO name and they just inserted the 'C' in the middle, but ICOs are going to be generally offered. They could be private placement or public offering. Whereas public offerings are just public offerings and they're registered with the Securities and Exchange Commission. You're going to see a lot of ICOs done under safe harbors exemptions from SEC registration, like Reg D private placements, whether its under 506B or 506C, which is general solicitation. ICO is a catchphrase for what's going to ultimately going to be both private placements and public offerings and IPOs are, by definition, all public offerings registered with the Securities and Exchange Commission.

What impact are ICOs having on the stock market? The answer right now is very little impact at all. Even if you raise $3 billion, it's a fraction of the capital that's in public equities markets. The US equities markets is probably, I'm going to venture a guess, is $30 trillion or more in size. So, if you raise $3 billion, $5 billion, $10 billion, $100 billion, $200 billions in initial coin offerings and crypto currencies, it really is still not that material. I think that ICOs, if they become easier to raise capital that because of the enthusiasm around them, just like the internet, you're going to see more money go into ICOs and IPOs for a period of time. That's exactly what we saw during the internet a couple years ago, that, anything that had a dot com at the end of its name was attractive to investors for a period of time, but hat will wax and wane. THere's going to be a sussing out, some of these are gong to go bankrupt, they're going to end badly. Some of them are goin to be total frauds and, at some point, the market will start to become more sophisticated and start to invest on the basis of, what I would call, ICO 2.0 kinds of ideas just the same way the internet evolved into internet 2.0 ideas.

Well, the difference between accredited and non-accredited investors is a legal definition and accredited investors have to make a certain standard of income in net worth and unaccredited investors is just the public. Its actually one of the problems with many of the ICOs that have been done today is that they've been issued to unaccredited investors, probably illegally, and we're goin to start seeing some enforcement actions around those as a result of their ignorance of the law.

We're big believers in the current legal frame where, on the United States that's been developed[ed over many, many years by the securities and exchange commission and is enforced largely through the broker dealers by FINRA, which is the Financial Regulatory Authority. We believe that disclosure is critical. As Justice Brandeis, who was once a supreme court justice, said "Sunlight is the greatest disinfectant". I think that one of the problems with many of the white papers that have been written in the ICO arena is that they didn't have risk factor sections, they didn't have adequate disclosure and so there may be a case, in many instances for plaintiffs attorneys to alleged fraud. So, it's our belief that going through the front door and treating all of these offerings as securities offerings is the right way to go. It's going to be infinitely more respectful of investors and much less apt to take advantage of investors and much more apt to be afforded the protection of the justice system.

My key prediction in 2018 is that the vast majority of these offerings are going to start to get done as securities transactions. I think that's the right way to go, at least in the Untied States, I think in foreign nations, where there's much less regulation and its still a little bit of the Wild, Wild West, I think that's going to end badly for investors. You need some integrity to the disclosure process. Somebody has to vet deals, more and more of these deals. Second prediction are going to go through investment banks. That may be self-serving because we run an investment bank, but the idea that people are going to help kick the tires and vet what the actual business plan is, I think is a pretty solid one. My third prediction is that, over time, you're going to see more and more of this business be started in the venture arena and the actual public offering piece of it will only occur once the platforms have been created and there's no longer a startup.

Right now, an awful lot of the issuance that's getting done is really startup issuance. If you look at startups in Silicon Valley, the startups have a very high failure rate and that's gong to end up bleeding itself out.

Adam Chapnick:

The Crypto Monday Meetups in New York are hosted by friend of the show, Lou Kerner and James Haft of Crypto Oracle. Be sure to visit our website, ICOinvestor.tv, to learn more about the Crypto Meetup channel.

Amy Wan:

Alright, that does it for today's show. Be sure to visit us on Facebook, Twitter and Instagram. Send us your questions and comments, we love to hear from you. I'm Amy Wan.

Adam Chapnick:

And I'm Adam Chapnick for everyone here, thanks for joining us and we'll see you back here next week.