How a Kiwi startup brought some of the world’s most beloved IP into its digital universe

Seeing people move increasingly into the digital world, David Yu had a stark realisation: he needed to build a product that would essentially kill his own business.

A lifelong collector, Yu had an early start as an entrepreneur re-selling stamps and phone cards at age 14 before opening his first retail collectibles store, Games R Us, aged 17. After 20 years of establishing businesses and introducing us to cultural phenomena like Pokémon cards, and tabletop games like Dungeons & Dragons and Warhammer, he sensed increasing retail industry disruption, and audiences migrating online.

In 2017 he co-founded Orbis Blockchain Technologies, known for its VeVe app – a platform where users can collect, trade and showcase digital collectibles in the form of NFTs. Launched in late 2020, VeVe has partnered with some of the best-known IP owners in the global entertainment industry – Disney, Marvel, DC, Pixar and Lucas Films are a few – along with other major brands, like Lamborghini and the US Postal Service (USPS).

Ahead of sharing his founder journey on the main Sunroom stage at Sunrise Aotearoa, Yu talked with Caffeine about just what it took for a Kiwi startup to convince the owners of some of the world’s most beloved IP to come into its digital world.  

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What were the main challenges when first approaching IP holders like Marvel, DC and Disney about the concept of VeVe?

Number one, there was this difficulty of the ‘one app’. As you probably understand, a lot of IP owners don't like to mix their IP with one another. The people who love Spider-Man are very Marvel, and for Batman and Superman it’s DC, so to have these superheroes in one app was a challenge in its own right. And then you have other IP inside the app that’s not even relevant to superheroes – like Back to the Future and Jurassic Park.

It took a while to convince the IP owners that collectibles, they live together. People who collect stamps, they don't only collect New Zealand stamps. Or people who love NBA basketball might also love baseball or rugby. They live together in what we call the ‘fandom’.

But the biggest issue was that we were pre-launch and pre-revenue. We only had a few screenshots to show them of what this will look like if it does happen. And I have to admit, most, if not all the studios didn’t even understand there would be a market for this product. But that was one of the drivers for me: we wanted to create a new category. The collectibles business has been around for hundreds of years – people collect stamps, coins, memorabilia, cigarette cards – now they're just collecting these things through a new medium, which is digital.

We had to prove to the IP owners that there is a market for it and how the asset and the product will be compelling enough for them to give us the rights to do it. That was a challenge of design, and then of the technology, the security and the legal all behind it

One of the key reasons why we became successful and we had a compelling product is because they understood, ‘okay, if people want to buy an image digitally or even in 3D, how would you make it limited enough?’ That was by using the underpinning blockchain technology in a way that authenticates that digital content. It almost allows the digital content to have a provenance, so when I buy, sell, swap or trade it has a track history.

That was very compelling for them to go, ‘okay, so we don't really think there's going to be a market for digital, but if you can somehow make that digital product have an authenticity behind it and then it links to, for example ‘this is an official Universal digital collectible release’, that will be compelling enough, and we could try it’.

Importantly, you have to remember just Disney alone has a century’s worth of assets of work combined. So the narrative around how it should be delivered was very important because you have to keep in mind these digital collectibles are making history. They are being minted onto a blockchain as the first appearance of some of these most amazing characters in storytelling.

Also, what would that look like and how can users interact and play around with it? In Web3 we use the term ‘utility value’: what value do we get out of it? The NFT business that we are in, it's the digital collectibles side but it’s just really what we call a byproduct or something that could be possibly bigger – the word that’s been thrown around in the last couple of years is the metaverse. Soon you will be able to put on your glasses, and be surrounded by the things and the characters that you love. That's where we're moving.

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To what extent were you able to leverage your background in collectibles to build VeVe?

I started in the gaming space in 1997; I brought in Pokémon cards to New Zealand, I brought in Warhammer, Dungeons & Dragons. So I had an understanding of how to create community around a product. That helped me to leverage connections and what I’ve learned; I’ve built friendships and trust throughout those years and obviously I leveraged those to open the doors. That's number one.

Number two, it was very, very, very, very difficult to get meetings with these corporations. We actually had no chance from the get-go. We were underfunded, over-dreaming.

It was only through convincing them from my experience building games, bringing in character sets unknown to the world and how I market them, to let me have a chance to do this. I remember many times going from one meeting to another, we would be in the Uber changing the slides on the PowerPoint saying ‘I don't think that guy liked that character; he liked this one and maybe at the next meeting we should bring that out as a major focus point’.

It was about being relentless – not leaving New York or Los Angeles without getting meetings. Then after meetings, we’d constantly come back to them in an almost embarrassing way, like almost harassing them with ‘we’ve got something new to show you’. And that's how we broke through. We would go from one junior executive, slowly rise to the vice-president or the president in the meetings. We hustled.

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What’s next in terms of brands or IP that you are targeting?

We continue to be developing new vertical products to align with what we're doing and again, they’re all IP related. We're moving into the category of music, and the category of gaming.

I think there's going to be a new category coming out for people collecting music they love, but it will be through a digital collectible way. For example, when I was in uni my dream was to own a jukebox. So you can imagine as a collector, we're going to be releasing a beautiful jukebox and then you can start buying digital records. It's going to be vinyl records, but digital vinyl records, so you can start listening to the music and you’ll own one of those rare records with the album cover. It has your serial numbers on it, it has the year it was minted as a digital collectible and you can play it, so you have utility value.

Furthermore, Veve has a range of vehicles – we released the Lamborghini Murcielago over the weekend – so you could buy music, put it in the car and it will play as you control the car. So there are all these new verticals that people will go into.

That's how people in the digital world flex. People buy Rolex watches in real life because they wear them to go out and show ‘I got a Rolex’; people who live in the digital world, they go, ‘Well, I own this digital Lamborghini’. And more and more people are doing that.

‍As told to Caitlin Sykes