#390: Ben Golub on Decentralized Computing & Storage

Ben Golub is a serial entrepreneur and CEO, who has played a key role in building six start-ups. Three of these were as CEO, including Docker, Gluster, and Plaxo. Today he serves as Executive Chairman and Interim CEO of Storj Labs. In this conversation, we discuss decentralized cloud storage, economic incentives, scaling software companies, acceleration of computing trends, and real world use cases. ============================== Crypto.com is the only all-in-one platform that allows you to BUY / SELL / STORE / EARN / LOAN / INVEST crypto all from one place. Join over 1 million users currently using the Crypto.com app. Download and earn $50 USD using my code ‘pomp2020’, or use the link https://platinum.crypto.com/r/pomp2020 when you sign up for one of their metal cards today. ============================== Coinbase Wallets are adding support for .crypto and .zil domains through their partnership with Unstoppable Domains. Unstoppable Domains provides an all-in-one solution for blockchain domains. You can send money using these new domains instead of long Bitcoin wallet addresses, while also storing your domain in Coinbase's collectibles section. Go to unstoppabledomains.com in the dapp browser to register and manage your domains. ============================== Pomp writes a daily letter to over 50,000 investors about business, technology, and finance. He breaks down complex topics into easy to understand language, while sharing opinions on various aspects of each industry. You can subscribe at https://www.pompletter.com

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast. Simply the best podcast out there. Let's kick this thing off. Ben Gollub is the serial entrepreneur and CEO who has played a key role in building six startups. Three of these were as CEO, including Docker, Gluster, and Plaxo. Today, he serves as Executive Chairman and interim CEO of Storage Labs. In this conversation, we discuss decentralized cloud storage, economic incentives, scaling software companies, acceleration of computing trends, and real-world use cases. I really enjoyed talking with Ben, and I hope you enjoy this one as well.

• 0:42Anthony Pompliano?

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• 1:27Anthony Pompliano?

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• 2:10Anthony Pompliano?

  Domains. It's just like any other URL. If you want to buy a normal domain on the internet, you go to GoDaddy and you go and you auction for them, or you bid on them, or you buy them. If somebody else buys it before you, then it's gone. You don't get it. That's it. There's only one. Same thing with unstoppable domains in the decentralized world. Once the domain is taken by somebody else, you can't get it. It's gone. No way. It's off the market. So head on over to unstoppabledomains.com today and go get the domain you want before it's gone. Unstoppabledomains.com. Lastly, don't forget that I write a daily letter to over 50,000 investors about business, technology, and finance. I break down complex topics into

• 2:53Anthony Pompliano?

  easy to understand language while sharing my personal opinion on various aspects of each industry. You can subscribe at pompletter.com. Again, pompletter.com. All right, let's get in this episode with Ben. I hope you guys enjoy this. Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only. All right, guys. Bang, bang. I've got a special treat for you today. Ben is here. Thank you so

• 3:38Anthony Pompliano?

  much for doing this, sir.

• 3:39Speaker 01

  Oh, my pleasure.

• 3:41Anthony Pompliano?

  Let's start with your background. You are probably one of the most educated people who have ever come on the podcast. Let's just talk through kind of where you grew up, the various schools you went to, and then we can get into kind of your entrepreneurial career.

• 3:55Speaker 01

  Sure, sure. So I grew up in Cupertino, California. So the story I like to tell is in third grade, we had a class visitor who wanted to tell us about this new thing he was working on, and it was Steve Jobs.

• 4:09Speaker 01

  So I got started early, but my first Silicon Valley job was cutting apricots. So it was like 12 and 13, making dried apricots. And then they paved over the orchard and they built up. So I've kind of been a big of it for a while. But yeah, most of my career has been sort of in startup land. I've done eight startups, four as a CEO.

• 4:38Speaker 01

  And you know, started out my career somewhat different. I was actually in demography really in my first time. I spent time in Africa, working on rural health and things like that. Then went to Uzbekistan to try and start a business school. Which had, as it's, you know, our business case for the business school is if we teach people how to read a balance sheet, then democracy and free markets will just happen. And that didn't quite work. We managed to teach a bunch of classes, but in every class, there was somebody sitting in the back, wearing a nail fitting suit, never talking, taking copious notes. And eventually, you know, we ended up getting shut down by government stuff, my first nail startup.

• 5:25Speaker 01

  But you know, since that time, I've been kind of fortunate. Was really in Web 1.0, working for VeriSign. Sort of with this crazy idea, you can do transactions on the internet and do so securely. So around the security payments, businesses for them. Then was CEO of Plaxo, early social networking company. Which eventually we sold to Comcast. Then CEO of Cluster, which open source storage company. Which sold to Red Hat. Then CEO of Docker, which sort of launched the container revolution. For those of you who, those of you who are listeners who are in the computing space.

• 6:09Speaker 01

  And then most recently, of course, I came on board as, as Executive Chair of Steward, which is the decentralized store.

• 6:18Anthony Pompliano?

  We got to talk about Africa is a continent where most people don't think to go and work. And then Uzbekistan is not the place that most people would think to go build a business. What was the?

• 6:33Speaker 01

  Yes.

• 6:34Anthony Pompliano?

  I said, what was the genesis for, for wanting to go to those two places?

• 6:38Speaker 01

  Uh, well, so, um, Africa, or you know, I was in, I was in Kenya. And at the time, uh, Kenya had a, had a fertility rate of eight, which means that the average woman living through her child bearing years would have eight kids. Uh, so it was, you know, for the fastest growing populations on the, on the planet. And there were 40 different ethnic groups, each which was growing at a slightly different rate and political power kind of depends on, at some level on populations. So, you know, for me, it was a really fascinating idea. Like, can you, can you somehow take math? And caring about people and combine them and find a way to intelligently help people. And, and actually, you know, Kenya has turned out to be one of the big success stories.

• 7:22Speaker 01

  Over the past, um, you know, past 30 years or so in terms of development, including, by the way, that they, they figured out, this great sort of decentralized way of doing finance using, uh, using, uh, using text messaging. So, you know, a ton of banking and lending and sending money from the city back home all happens via text message. So it's really exciting, exciting place.

• 7:48Anthony Pompliano?

  Absolutely. And so when you finally came back to Silicon Valley, started working at the technology companies, just growing up there, I'm assuming that you, uh, one, wanted to work at kind of these technology companies, but two, you had aspirations to one day have your own as well? Or was that kind of a?

• 8:02Speaker 01

  Yeah.

• 8:03Anthony Pompliano?

  And so let's talk maybe about Docker, which is kind of the, the last one that you did, before moving into kind of the crypto decentralized, uh, storage world. Just tell us the story of Docker and kind of how you guys built that company.

• 8:17Speaker 01

  Sure, sure. I mean, so Docker is a, was a company that actually started like as something else. It was a platform as a service company. And used some underlying technology to do that, that was a radically different approach towards how do you encapsulate workloads, if you will. And Docker was a, you had this idea that said, hey, you know, the the way that people build, ship and run code is, it was almost like it was sort of in the pre-industrial age, if you will, right? Because code was a long time to write, a long time to update, it was done by large groups of people.

• 9:00Speaker 01

  Code was tightly tied to the servers that it ran on. And Docker had this idea of, if you will, kind of creating the shipping container equivalent for code, right? So that you could take any piece of code, put it in the equivalent of a digital shipping container. And of course, the nice thing about shipping containers in the physical world is that, you know, it doesn't matter what's on the inside, the outside is always the same, right? Always the same dimension, books are all in the same places. So in the physical world, you want to ship goods from point A to point B, you put them in a shipping container and it goes from a ship to a train to a truck to a crane without ever having to be opened. And it can, you know, it's revolutionary, shipping container revolutionized physical transport. And Docker really revolutionized the way that, that code is written and shipped.

• 9:44Speaker 01

  So everything you read now about cloud-based computing and, you know, computing in a massive scale where workloads get split up into lots of pieces and run all over the place, that was, that was Docker. And we, you know, get it kind of in good decentralized fashion, if you will, by building a massive community and being completely open source and, you know, letting a thousand different approaches blossom and see which ones work. And so it was a, it was an amazing ride. And, you know, something like, I think the estimates are like 70% of all the new code that's written is written using the sort of Docker Kubernetes pattern.

• 10:25Anthony Pompliano?

  What's interesting to me is when people think of Docker, I don't think they think of decentralization and kind of they don't necessarily see huge comparison to that and what you're doing with storage, but there actually was a lot of the same ethos, right? There's open source, there's decentralization, it's very community-driven type thing. Maybe talk a little bit about, you know, how intentional was that versus kind of you got pulled in that direction while building Docker because that's just where you guys saw traction?

• 10:53Speaker 01

  Yeah, no, no, actually it was really quite intentional. I mean, you know, I think, you know, we were, if you will, sort of going up against a bunch of really, really large incumbents. Sort of the big winners and the large cloud providers were all doing things based off of virtual machines and a particular way of doing things. And, you know, we knew that, you know, a 14-person company is not going to change that, right? But a massive community can. And so we were really very intentional in saying, hey, let's, let's build a big community. Let's, let's make the code open. Let's take a really decentralized approach. And we didn't use those terms correctly. You know, like a really, you know, distributed decentralized approach was how we build, build

• 11:37Speaker 01

  the code, how it gets adopted. We built lots of really open interfaces. Anybody could take the code, modify it, use it in ways that they saw fit. And that enabled us to have a massive community, sort of spring up overnight. I mean, it was one of the largest projects, I don't know, in the space of, you know, six months, if you will, right? And we got to the point where billions of downloads a day were happening of code that was sort of encapsulated in, in Docker. And, and that is really very similar to the open, to the decentralized ethos, right? I mean, that you give up control, that you, you know, you do everything in the open, you make interfaces clean, you sort of do sort of individual empowerment, right?

• 12:21Speaker 01

  You empower individuals to do what they want to do. You set incentive, right? And then suddenly magic happens.

• 12:28Speaker 01

  And that's something we have to do if you're a challenger.

• 12:31Anthony Pompliano?

  Absolutely. And talk maybe a little bit about storage. So, you know, what you did at Docker was very, very disruptive. I think that there's been a lot of people who have said, oh, all these centralized storage and centralized computing companies are the incumbents. Maybe one way to disrupt them is through this decentralized approach. Just why go and kind of help storage and kind of what's the model and how does it work?

• 12:55Speaker 01

  Yeah, yeah. Well, I mean, I, um, I mean, you know, the, you know, so I'm starting from the first right, I mean, you know, death, taxes and data are kind of like, you know, the givens in this world and this past world, the world, this past year, the world created enough data to fill a stack of CD-ROMs that would stretch to the orbit of Mars and back.

• 13:16Speaker 01

  And it's going to grow like 40% next year, right? So it's crazy how much data is created. And yeah, some of that, a lot of that's cat videos, but you know, some of that is really critical information like that, you know, the cure for for COVID or, or, you know, new forms of clean energy and things like that, right? And, you know, for most of computing history, data was stored locally. So we push stuff to a hard drive. And then we had the cloud computing companies starting, the, the Amazon AWSs and, uh, you know, Microsoft shares and Google GCP. And they actually started out in storage, right? So they started their, their first service all of them offered was store your data. You push your data up to there and store it.

• 13:59Speaker 01

  And, um, you know, I think they're, they've done a great job, but there are a bunch of problems. First of all, cloud computing, centralized cloud computing is by far the incumbent. And, uh, you know, something like 90% of the market is among those three players. They also happen to be three of the five largest companies by market cap. And there's no, there's almost nobody has managed to try and beat them at their game, such a capital intensive game, right? So we're sort of in this situation where globally, more and more data is being created, more and more data is being stored with three largest players. We've sort of created three Rockefellers, if you will, of data is the new oil. Meanwhile, um, prices, unsurprisingly, have not come down.

• 14:45Speaker 01

  Right? In, in five years, basically the price of, uh, you know, storing a gig of data has only gone down by about 10%. The public cloud. Meanwhile.

• 14:54Anthony Pompliano?

  Well, why is that?

• 14:57Speaker 01

  I think it's all about play, right? You got you got three big players. They have no incentive to lower prices because as soon as one of them lowers, when Google entered the market, prices went down. And then they stopped, right? Because I think any one of them lowers prices of the others who met.

• 15:11Anthony Pompliano?

  So basically, but by avoiding lowering the price, you avoid the race to zero.

• 15:17Speaker 01

  Exactly, right. So they're they're avoiding the race to zero. And and, you know, to be fair, there are, you know, cloud storage. Costs a lot of money delivered because you have to build big data centers and you have to power them and provide. You know, higher suppression, all these other sorts of things. But meanwhile, you know, as big as cloud storage is.

• 15:38Speaker 01

  You know, it's dwarfed by the amount of storage that's in disks all over the planet. You know, something again, like eighty percent of them are are less than twenty five percent full. And it takes no more power or people or energy or capital to take all those drives that are out there and, you know, start using the unused seventy five percent capacity they have. So that's a business idea, right? And and, you know, at some level, we're basically like a massive Airbnb for disk drives, only instead of having people. You know, rent out spare rooms in their houses, they've they've run out of spare space on their on their disk drives.

• 16:15Anthony Pompliano?

  So what I want to do real quick is help people understand conceptually how a decentralized storage network works. And in order to do that. Maybe we can take two seconds and just describe a data center. And so for those that don't know, there are massive computing facilities all over the world. These facilities basically build, you know, the physical structure, they put computers, they put storage hardware in those facilities, and then they have sales forces that try to go out and get customers. And so that model is can be very profitable if done well. But just like any business, when you go to the convenience store.

• 16:54Anthony Pompliano?

  You don't have everyone buying all of the products in the convenience store at all times. So there's things that are sitting idle, or in this world, it is computing power or storage that is unused. And so this idea of a decentralized. centralized storage network is basically Ben, the team at Storage, has come up with an incentive mechanism to get the unused storage to come up for availability through a digital means and then people who need storage can go in and basically purchase some of the unused storage. At a high level, accurate and you're the expert here, but is that direction?

• 17:27Speaker 01

  No, no, no, you're really accurate. You know, the only thing I think I would sort of clarify is that the drives that we're using aren't necessarily in the data center. So we've got, we've got some people who have, you know, we've got companies who have data centers, we've got universities have data centers. You've also got lots of individuals who are running computers in their basements.

• 17:50Speaker 01

  And all of those, you know, people in rural parts of the world that have, you know, have a, have a disk drive, right? All of those can be part of our storage network and they all are. And so we've got something like 10,000 drives all around the world, or 10,000 people on the world operating drives in like 85 countries.

• 18:08Speaker 01

  And, you know, collectively, they've created a pretty massive storage network. And if you are storing in data with us, instead of us storing it on, you know, one drive that we control, we sort of split it up into pieces and we run it across large, we drive from by lots of different people all over the world. That not only good economically, it also turns out to be really good for privacy, for cost, for performance.

• 18:32Anthony Pompliano?

  And so the customer experience, from what I understand, is almost identical to what you would do with a centralized service, right? You go to a website, you say, hey, I need to spin up some storage. You basically purchased that and what happens from that point through a centralized and a decentralized service is different, but for the customer, it's pretty much exactly the same.

• 18:51Speaker 01

  Yeah, I mean, that was our intent. Our intent was to say that for our customers concerned, we suggest be a really fast, really secure, really cheap,

• 19:01Speaker 01

  really useful way of doing storage that doesn't require them to change the way that they operate. So we've got, you know, we've got lots of people doing cool decentralized apps on us. We also have, you know, massive numbers of people who are doing traditional apps on us that just happen to be doing it now that decentralized.

• 19:16Anthony Pompliano?

  Got it. And so then what is the economic benefit? Because that's ultimately the people who have this unused storage and they're kind of offering it up. I love the example of Airbnb. These are the people who have a home and they want somebody to come stay in it, right? Talk about kind of the economic difference. Obviously, you're competing with zero, right? So they get nothing for their unused stuff without you.

• 19:35Speaker 01

  Right.

• 19:36Anthony Pompliano?

  How much can they make? Or how does that work from, uh, from, um, you actually send them somebody to, uh, to use as a customer?

• 19:43Speaker 01

  Sure, sure. So basically, uh, what, uh, if you're a storage node operator, or we call them snows, you basically, you know, download some code onto your, onto your drive, if you will. And for the most part, stuff happens in the back of you, you don't even have to pay attention, right? Um, uh, and again, you're not spending additional money on power or equipment or people to do this. Um, what we do as our economic model is we quote prices to our customers. And, um, in essence, about 60% of what we make from our customers goes back to the network. And so as a storage node operator, we quote you a price based off of how much data you're storing

• 20:24Speaker 01

  and how much data you're serving up. Um, and you're depending on the size of your, excuse me, size of your drive and how much you're storing. Um, you know, you can make $5, $10 a month for drives, right? Um, so it's not, you know, it's not a standalone business like being a miner. But for many people, it's a great way of monetizing the revenue basket. Um, and unlike being a miner, it doesn't take a lot of power. It doesn't take a lot of effort. It doesn't, you know, we, we designed this so that it's, it doesn't take specialized equipment to do. Um, this is an incentive model for, excuse me, for the, for the rest of us, right? Um, and so as a result, we, we've got a really

• 21:08Speaker 01

  broad group of, of storage node operators who are happily being part of this. And of course, we, we compensate them in our token, which is STRJ.

• 21:17Anthony Pompliano?

  And so this is something that can be spun up pretty quickly, right? If I have unused storage and I can actually spin it down as well. Let's say if I need the storage or something like that also. It's pretty responsive.

• 21:27Speaker 01

  That's right. Yeah. So, so, um, you know, now, now you're, you're sort of a reputation, if you will, is based off of, uh, things like uptime, um, and, uh, how long you store. But if you are, say, a data center that has equipment that sits idle for most of the year, but you need to reclaim it, uh, you know, around the holiday shopping season or something like that, that's fine. We have, we have ways for you to sort of tell us, hey, I need to reclaim my space and push the data to us and push it to other people.

• 21:58Anthony Pompliano?

  Got it. And so the part of this conversation I'm really, really interested in is, uh, I'm going to, uh, say, hey, Ben and the rest of the team, uh, they know what they're doing. They're gonna execute perfectly, uh, and they're gonna end up being, you know, really, really successful beyond their wildest dreams. What does this do to the, uh, the centralized players and how does the market, you know, forces change and kind of the competitive landscape, uh, if that occurs?

• 22:23Speaker 01

  Sure. Sure. Well, I mean, but, you know, we are able to price profitably to ourselves, right? It's something like a third of what the, um, cloud providers do today, right? And as, as, and, and I think as important as the fact that we can, we can price that way, over time, economics should help us bring prices down, right? There's more and more data, more and more drives get shipped all the time and all the things that we care about, right? Our economics, our performance, our security, uh, they all get better and better and larger and larger our network gets. Um, so what we think, or we certainly hope this does, it actually does disrupt the market and will probably be ignored for some period of time, right?

• 23:03Speaker 01

  But, um, uh, eventually I think there needs to be a, a challenge to the large players. And unlike

• 23:11Speaker 01

  You know, unlike the other people who try to go into centralized computing, right? I mean, you know, big players like Oracle and IBM and others have tried to enter the cloud computing space. And even they don't have the massive amounts of capital and data centers to compete against the Amazons, right? I mean, you know, the, the closest competitor that the big three have is Alibaba, who's, you know, whatever, number six in terms of market cap, right? So, uh, I think the only way that you can compete against large folks and disrupt them is through decentralization. And that's true for us in storage, but also, you know, on the compute side as well, there are lots of really interesting decentralized companies and decentralized network companies.

• 23:49Anthony Pompliano?

  Yeah. And really, the advantage you have is you can have a price that is, you know, 66% lower, you know, give or take, because you don't have all of the infrastructure costs and all the expenses that take to build out the storage, right? You're basically just tapping into unused storage that other people have, uh, and it costs you nothing, um, to actually tap into it.

• 24:09Speaker 01

  That, absolutely right. Um, I mean, and, and also we, we've managed to, you know, not only build the equivalent of some really large data centers, but do it all around the world, right? So that we now have the ability to offer cloud storage to people in Kenya, right? Only if you're getting, uh, if you're going to be getting movies served from us, they're going to be coming from Nairobi, not from Nebraska, right? So it's also faster.

• 24:31Anthony Pompliano?

  Absolutely. And then talk a little bit about, um, as you're doing this, what stops them from going into and trying to do a decentralized option, right? Can the Amazons, uh, the Googles, like, is that the, the kind of natural step for them to try to compete as they, uh, start to feel threatened by you?

• 24:50Speaker 01

  Uh, well, I mean, I think it's like most disruptive technologies or incumbents don't, don't tend to, tend to do it because they've, they've got something that works really, really well, right? Um, and then they, they have all of their advantages, you know, their data centers and, you know, their, uh, you know, their ability to operate on razor thin margins, uh, on equipment and their power suppression and their power supplies and their power supply. Awesome. That doesn't help them in competing with us. Right, and so eventually, maybe they will.

• 25:23Speaker 01

  But I think at that point, we will have achieved our end. We will have a great business. You'll have gotten some incumbency advantages as well. Doing what we do has really powerful economics, but there's also, as you can imagine, different challenges. How do you keep it coordinated? How do you make sure the files don't get lost? How do you make sure that you keep the incentive structure, right? How do you make sure there's the right balance between people who want to provide storage and people who want to consume?

• 25:47Anthony Pompliano?

  Absolutely. And then talk a little bit about, obviously, as you're doing this decentralized network, people have to get paid, right? And so there's this storage token, right? S T O R J, I think is what it is. And there, you know, these tokens have become controversial in the crypto industry. The Bitcoin community thinks, you know, why not use Bitcoin? Everybody else thinks, why not use X Y Z token? Like, just talk a little bit about the use of this payment via a digital token or digital currency, and then kind of why create your own versus use one that already existed?

• 26:25Speaker 01

  Sure, sure. So we, you know, and as I said, sort of clarify, at least the way our economic model works, right now, we quote prices in dollars, both for customers and for the snows, for the suppliers. And then customers can either pay us in Viat or in our token. And our suppliers get paid in token, and we do a sort of spot conversion based off of existing contracts. But there are a lot of reasons why it's great for us. First of all, again, we're now paying thousands of people in 85-plus countries, right? Sometimes small amounts, sometimes large amounts, being able to do it with using our token, being able to use things like smart contracts, really, really critical.

• 27:08Speaker 01

  We've also programmatically built in, not only on the supply side, but on the demand side. So we've built a program, we call it the Open Source Partner Program, that also kind of turns things on the head and into the demand side, rather than hiring lots of salespeople, as you talked about the centralized people doing. And then, you know, essentially, what the cloud buyers tend to do with the open source community is take great open source code, give it away for free. You know, as a loss leader to drive more compute and storage and networking, we actually compensate the open source companies. So if they send users and data our way, we send money back to them and we do it programmatically.

• 27:46Speaker 01

  So for us, it makes the system work much faster, much more reliably. Of course, we funded our initial efforts to a large extent based off of having a successful token sale back in May of 2017. And for us, it's the right way to do things. It also gives us an opportunity to further differentiate ourselves. We're trying to be not only sort of enterprise grade in terms of our storage, but also enterprise grade in terms of the governance and management.

• 28:21Anthony Pompliano?

  Got it. And so do you feel like eventually this is going to force kind of digital currencies, regardless of which one it ends up being, into kind of this entire cloud and storage world, where whether you are a decentralized or centralized platform, like they've got to support it? Or do you feel like you've got kind of an advantage and kind of a wedge into a market where that's not going to happen for a long time? And you guys will kind of enjoy the first mover advantage there?

• 28:47Speaker 01

  Yes, it's a good question. I mean, we, you know, I don't know whether the crypto aspect of what we do ends up being a guarantee of entry or not. I suspect that if it does, it's less important than the decentralized aspect of what we do. But I, you mean, we sort of internally say, you know,

• 29:10Speaker 01

  you know, blockchain is much bigger than cryptocurrency. Decentralization is much bigger than blockchain. And we think it's like decentralized infrastructure in general is much bigger than any of them. That's really the powerful thing is that you give tools that push things to the edge, if you will, and push infrastructure into the hands of, you know, thousands, hopefully millions of people, you know, around the planet. And that that's really the big disruption. And cryptocurrency and blockchain, these are all sort of primitives that enable that, but they're not the main story.

• 29:44Anthony Pompliano?

  Yeah, and one of the things that's really interesting, just in computing in general to me is the centralized players have been trying to build kind of pseudo decentralized networks that they control, right? What I mean by that is all of these POPs and kind of localized data centers and a kind of infrastructure that, for those that are unfamiliar with the space, they basically are just pushing infrastructure from rather than having one data center in the US or in one area, how do we kind of break it up and put it closer to the user, but they still control it? It feels like it's already moving in the direction of decentralization from an infrastructure standpoint, just the ownership has stayed centralized. You guys really are saying, hey, we have decentralized ownership of the network and we have decentralized

• 30:28Anthony Pompliano?

  infrastructure and therefore that's the advantage, right?

• 30:31Speaker 01

  Right, right. And also we've designed things so that, you know, we're not a central point of failure, right? So for example, like if you're storing data with us, we don't have any of the keys. We have no way of knowing what's being stored, no way of mining it, no way of compromising it. And the same thing too for the storage node operators. So, you know, one sort of clarification about how things work with us. If you upload a file to us to store it with us, it gets encrypted, so scrambled up with keys that only you have. It then gets split up into lots of pieces, nearly about 80 pieces, of which any 30 can be used for the back end. And each of those 80 pieces goes to a different drive, run by a different person on a different power supply, at a different geographical location.

• 31:12Speaker 01

  And that level of decentralization does magic, security magic in terms of performance, magic in terms of economics as well, right? And that's really the key, right? It's not that we have created a network where we push stuff out to the edge. We've enabled the network that's at the edge.

• 31:34Anthony Pompliano?

  That's awesome. And to be like, you know, I'm biased because I kind of understood this more and more and more. But it just feels like naturally this is where the world has to head, right? Like you guys are just ahead of the curve.

• 31:48Speaker 01

  Yeah, yeah, no, I think I think it has to, and I think this decentralized approach is really the only way to create a viable alternative to the centralized providers. And as good a job they do, and by the way, they offer great services, right? But, um, you know, again, if data is the new oil, we don't, we don't want, we don't want another Rockefeller. And it's just a bad thing if, if cloud computing, which is the most important computing trend,

• 32:15Speaker 01

  is dominated by, you know, three of the five largest companies by market cap. That's and nobody else can get in that. That's a bad, bad situation.

• 32:24Anthony Pompliano?

  Where do you go from here in terms of, you have to have the storage network? Do you eventually go and compete on other aspects of computing using the same model?

• 32:33Speaker 01

  Absolutely, absolutely. So, I mean, right now, you know, we think that there are so many other, there are lots of great companies that are trying to solve the decentralized problem. And so, you know, right now, we're sort of in partnership mode. And maybe continuing partnership mode, maybe we can introduce it at some point. There's a, there's a long road that we need, that a long road map in front of us in terms of taking the storage that we have right now, which is primarily used for sort of like fast backup and things like that, and extending it to content delivery and to compliance story and all these sorts of things. Absolutely, you know, compute, networking, storage are basically the three things that are, you know, cloud computing. And if you can provide those primitives well in a decentralized way, that, that,

• 33:18Speaker 01

  that disrupts the market. And, you know, we've already found a great way of getting compatibility through providing an incentive structure for open source in the same way that, you know, we provide incentive structure for storage and operators.

• 33:32Anthony Pompliano?

  And so when you built the kind of decentralized storage network, you obviously have to go find these people. You have to explain it to them. You've got to get them on boarded, kind of all that stuff. Would it be fair to say that those same people who are providing storage today could be the starting point of the network for computing or networking and these other services? And therefore, it's almost like, yeah, by building the first network, then the second, third, fourth and fifth get easier and easier over time?

• 34:00Speaker 01

  Yeah, absolutely. Right? I mean, so if you're, if you're running a drive,

• 34:07Speaker 01

  you, that drive already has some compute power in it and it's got some connectivity. So it's already kind of got like networking and computing in it. Now, there's, there's different technical challenges to do compute securely and to do networking the right way. But yeah, absolutely, absolutely.

• 34:24Speaker 01

  And, you know, the other sort of, there's also a whole bunch of other learnings that you just have to get around. How do you run it this way? How do you keep, how do you keep supply and demand in, in, in check? I mean, that, that's one of the, I think the biggest challenges that, you know, doing what we do has with it in the same way, like, you know, if you're Uber or Lyft, you know, you want to have enough cars on the road so that anybody can always get a ride, but you don't want so many cars on the road that nobody gets a pair.

• 34:54Speaker 01

  So we're the same thing. There's enough capacity out there so that anybody wants to store it, but then, you know, people aren't sitting, sitting idle.

• 35:01Anthony Pompliano?

  And is it also true on the customer side? So if I'm a customer of your decentralized storage, then I probably also the most likely to convert on decentralized computing and other services as well. So it kind of becomes lower cost of acquisition?

• 35:16Speaker 01

  I think so. I think so.

• 35:20Speaker 01

  You know, what, what is, what is true though right now is that we have a lot of people who are doing really cool decentralized apps on us. And we can talk about that a bit, but still the bulk of our customers are people who are running more traditional apps. They just want a better alternative than storing the data at the cloud providers.

• 35:42Speaker 01

  But, you know, I think what you tend to see in technology in general, right, is that, you know, even the early adopters start with. You know, low, um, low risk workloads. And when you do a good job with them, then they start going, going upstream. And that's, that's kind of the classic, you know, disruptive approach. You offer something that's radically better for a small number of use cases that the big folks don't care about. And once, when people get used to that, then suddenly you get more and more use cases and higher and higher use cases. And before you know it, you know, people who are ignoring you are chasing after you.

• 36:19Anthony Pompliano?

  I was walking you into explaining that you're essentially putting the big guys in the innovator's dilemma, right? Which is

• 36:25Speaker 01

  Absolutely, yeah.

• 36:28Anthony Pompliano?

  They, they can't, uh, they can't come do what you're doing because it would be a distraction. It doesn't look interesting, you know, whatever. But you get to, uh, continue to kind of eat the stack of, uh, infrastructure, right? So on that kind of supply side. And then as you start to source demand, you essentially just eat more and more of their computing needs. Uh, and next thing you know, you back into the centralized players not being in a very good position.

• 36:52Speaker 01

  That's, that's right. And, and, you know, honestly, they, you know, they, they follow the innovator's dilemma too, right? I mean, you know, you know, 12 years ago, people say, why store data in a data center by somebody else? That's crazy, crazy talk. Uh, you know, low end use cases and we're doing the same thing. And, you know, if you read innovator's dilemma, you know, that the, the, the case study that, that Clayton Christensen did was on storage. Because the storage industry is just, it's, it's, it's this, this history of, of innovator's dilemma all the time.

• 37:26Anthony Pompliano?

  Well, we, uh, I'm cheering for you. I hope that that is what, uh, where the world is going.

• 37:30Speaker 01

  I, I do too, but, uh, you know, it's a, it's a exciting time. I think, uh, if you're going to go into, into startups and again, this is my eighth startup. But you, you've got to do something that you think is going to be fun and meaningful, even if it isn't.

• 37:44Anthony Pompliano?

  Absolutely. Before we get into the rapid fire to wind this down, I want to talk about real-world use cases. And obviously, you have so many customers kind of on each side of the marketplace. Maybe talk through, you know, one or two examples of the types of infrastructure providers and the types of companies that are actually using this.

• 38:02Speaker 01

  Sure, sure, sure. So I'll talk about customers, people who are actually storing data with us, right? And it's a pretty broad group of people. We've got, you know, we've got people who are storing video and photos and things like that. And we give them a fast, easy way to share data. We're seeing a lot of usage among academic data sets right now, right? Where you've got a massive data set of, let's say, climate data or energy data, you know, or health data, and you want to be able to share that securely with large numbers of people, make it really fast to get it out there. We're just an excellent solution for doing that because it's very secure, very durable, and yet the data can

• 38:47Speaker 01

  get extremely fast if everybody wants to use it. We're also seeing some more, you know, more relevant to probably the area that you spent time in. We've got a few people who are actually using us as a way to get blockchain data distributed. So blockchains themselves are pretty massive, right? And in an ideal world, it's really easy for anybody who's running a node to be able to get the entire blockchain, get it quickly. Darian Classic wrote about how they're using us, but lots of others were using us as well to get data out there and get it distributed quickly and securely. Interestingly, part of what you get when you decentralize storage, you get this massive improvement in privacy

• 39:30Speaker 01

  and security. As I mentioned, every file that gets uploaded to us gets encrypted before it gets uploaded, then it gets split up into 80 pieces, each of which goes to a different drive on the network. It only knows that they have a piece. And so if a hacker wanted to get at that file, they'd have to find 80 drives out of, you know, thousands or hundreds of thousands, compromise each one. All they would get would be an encrypted file, and even if they managed to somehow decrypt that, the next file they go after is going to be different. So if you're storing like, you know, really sensitive personal data, we're a great solution. You remember a few years ago, Equifax got breached, you know, so millions of people's personal data got

• 40:11Speaker 01

  compromised because one incompetent administrator at Equifax configured a print server incorrectly. With us, that just can't happen, right? Not only can we screw up, but you can't screw up as an end user, right? So that's, those are the kinds of use cases that we're seeing is highly secure, highly fast, highly private data that needs to get stored and distributed locally is our solution.

• 40:37Anthony Pompliano?

  And are there situations where companies are choosing kind of centralized and decentralized solutions side by side? So I may be a company, I've got some storage, you know, needs, and I may actually split this between both centralized and decentralized. Maybe talk a little bit about that?

• 40:54Speaker 01

  Yeah, yeah. I mean, so, so, you know, most of our, our customers, you know, right now have some data that they're storing locally in their own data center, and then some data that they're storing, let's say, in Amazon or Google or, you know, or, or Microsoft. And generally speaking, what they will do with us is they'll say, okay, I'm going to give you 10% of my data, and I'm going to try you out. And so, you know, every day as I'm running jobs and creating data, I'm going to push my, my backups to you or my snapshots to you and see how you do. And then over time, what they're, what they're seeing is, God, this is great. Rather give you 10% of the new data I create, let me give you 50, 70% of the data that I create. And then at some point, they may take the data that

• 41:38Speaker 01

  they're currently storing in Amazon and move it to us, and that's, that'll be great. But, you know, what I think is, as sort of an important truism is that if you're going to be doing something disruptive, it can be disruptive, but you don't want to be, you don't want your customers to experience it in a revolutionary way. You want to give them the offshoot experience in an evolutionary way.

• 42:00Anthony Pompliano?

  Explain, explain that. That is very, very good advice, but explain that.

• 42:07Speaker 01

  Sure. I mean, we, as a brand new company, can take on lots and lots of risks, right? We're, if, if our, but our customers, you know, most customers don't want to have to change what they're doing in order to get advantage, right? I mean, to ask a customer to completely change everything that they do, how they write their code, how they, how they store it, what their risk profile is, is asking a lot, right? And so what we like to do is be able to give people, you know, the ability to say, hey, I'm going to change three lines of code. Suddenly I'm, I'm using storage and it's cheaper, faster, better, more secure. I love it. And I'm going to evolve to do more and more over time with, with us. And you know, more they do with us, the more

• 42:50Speaker 01

  benefit they can get. But asking them to change their world for us is, is a nonstarter.

• 42:56Anthony Pompliano?

  That, that makes sense. What's the biggest challenges as you guys kind of move forward? What, what do you spend your time thinking the most about that you guys need to either solve for or kind of come up with solutions?

• 43:08Speaker 01

  Sure. I mean, we, you know, we spent a ton of time making sure that we offered a centralized storage solution that was, you know, high availability, high performance, had a large enough number of nodes, ran really well. We actually had a year-long beta process.

• 43:25Speaker 01

  You know, we didn't use a single file, which was important to you first, but you're making sure that what we were offering was rock solid. The last thing we wanted to do was be the first to market with a decentralized storage system, have people get excited about it. And then, and then fail. Cause we wouldn't just be failing for ourselves, we'd be failing for the whole industry.

• 43:46Speaker 01

  So we spend a lot of time doing that. We spend a lot of time on incentives.

• 43:50Speaker 01

  We want to make it really, you have the right incentives in place for people who are running the nodes, that they're profitable and easy and they're not, and they're not sponsored by what they have. And then also that we don't set the wrong incentives, right? We don't want to incent bad behavior.

• 44:06Speaker 01

  And then a lot of it is, you know, the normal, blocking the channel, building a great company, building a great culture, building a great community. And, you know, that's, that's a challenge. It's also really fun. Ultimately, the community is so much larger than the company and the company is so much larger than the community. That's, that's how you gotta think about things.

• 44:26Anthony Pompliano?

  That's a great way to look at it. I asked the same two questions to everybody and then you'll get to ask me one to to finish up. The first one is, what is the most important book that you've ever read?

• 44:36Speaker 01

  We talked about one of them already, which was the universe 11. That's great. And lately, I I've been rereading Man's Search for Meaning.

• 44:49Anthony Pompliano?

  Why do you like that one so much?

• 44:52Speaker 01

  I think we're living in like an unusually difficult times. And, and I, and I think, A, you know, having the perspective of people who are facing challenges that to sort of swamp anything we're dealing with. Yeah, it's annoying to have to sit on your butt and watch Tiger King, but that's not the biggest sacrifice that people will make. But, you know, to understand how to sort of accept the situation you're in and yet still have hope. And I think is really, really important. And, and so, you know, I think in times like this, I find that it's very helpful. And also, understand the importance of being kind to each other and having broader, broader meaning in your life. I think part of how you get through

• 45:37Speaker 01

  difficult times like we're going through is to, you know, work on something that's learning to resolve.

• 45:45Anthony Pompliano?

  So you'll love the second question. It's a little bit more fun, but Man's Search for Meaning has a connection here, which is aliens. Believer or non-believer?

• 45:56Speaker 01

  I absolutely believe that there's life teeming the universe and that there's lots of intelligent life. I'm not convinced that they've come to visit Earth. And certainly, 2020, I'm sure there's, if they are out there, they're staying far, far away.

• 46:11Anthony Pompliano?

  I've always thought about like, do we want to find them? Or do we want them to find us? Right? Usually, at least in human history, like the conqueror has prevailed. But I don't know, in 2020, like, this is probably not the planet you want to just jet on over to if if you had a choice.

• 46:28Speaker 01

  Yeah, I guess so. Yeah, the, the alien Cortez equipment was looking at us and saying, I don't, I don't think so.

• 46:35Anthony Pompliano?

  We'll wait till 2021 to go visit them.

• 46:36Speaker 01

  Wait till 2021, yeah.

• 46:38Anthony Pompliano?

  You could ask me one question to finish up. What, what one question do you have for me?

• 46:44Speaker 01

  So what's next after DeFi? What are you most excited about?

• 46:49Anthony Pompliano?

  Look, I think I'm very convinced that centralization has now become a business risk, obviously. And so whether that is centralization of your infrastructure, like what you guys are going after, centralization of kind of financial services. So everything from Bitcoin on down to some of the more nuanced DeFi stuff is kind of the where the world is headed. One of the things that is really, really interesting to me as a concept is this idea that we have entire frameworks, currencies, rules, et cetera, for every economy and every kind of business, you know, market, but they're all tied to, you know, essentially imaginary lines on a map,

• 47:32Anthony Pompliano?

  right? So they're all fit like physical location based type world. And in some weird, potentially wrong, but but still kind of exciting world, I kind of think of it as like you and I both left our geographic locations today and we met in the internet, you know, economy, right? And so we're doing this virtually. And so it's kind of like Ready Player One style, you know, like, like you're going into this like internet economy or this internet world. And so when you think of it that way, and you kind of take, you know, pre-COVID, all the things you would do, right? So everything from you might go to a happy hour with your colleagues, you had to go to work, you know, you'd go to your kid's ballgame, like, like

• 48:16Anthony Pompliano?

  you kind of just walk through every single, you know, daily activities. What percent and which ones are going to end up in this like internet world? So you're obviously not going to be able to virtually attend your kid's virtual baseball game. Like, that might be a little weird, right? At least in the short term. And so like, some of it is not going to kind of, you know, be brought into this. But when you start to bring some of this in, so meetings is the easy example for everybody. There's entirely new businesses. There's all kinds of decentralization, you know, benefits, like, there's just a lot that would change. And I think that for you and I, who, you know, generally are technology minded, have kind of been paying attention to a lot of these trends. If anything, it just accelerated

• 49:01Anthony Pompliano?

  things we kind of already knew were underway. But I think a lot about like, you know, restaurants, like all of a sudden, a lot of restaurants were like, oh, this digital thing's gonna happen, you know, five or 10 years from now. And like, we just got a website, right? Like no, now, now it's here.

• 49:16Speaker 01

  Oh, now it's here, like overnight. He's accelerated everything.

• 49:19Anthony Pompliano?

  And, and so, you know, th- those are like digital examples. I also think that you start to break down this idea of like, if companies start to pursue more resilience,

• 49:31Anthony Pompliano?

  and not just efficiency, they're gonna onshore a lot of things, right? So you're gonna see all kind of manufacturing, supply chains, like all that stuff. And so in that trend, American labor is actually pretty expensive compared to where they've been able to outsource it. And so the unit economics get thrown off. And so I think like there'll be this resurgence of, I don't like 3D manufacturing and automation and kind of all these things that allow technology to, to kind of bring the cost of that stuff back down, but based here in, in North America. And so when you think of that, like, we, do we have enough people to do that? Like, that are skilled? I, I don't know, right?

• 50:12Anthony Pompliano?

  And so I don't know, it's just things like that I spend time thinking about and it's probably intellectually stimulating for me because there's not a right answer, right? So like you can't be wrong. So I don't know, but for you guys, right? It's like a perfect, you know, tailwind, right? Because basically everyone's gonna need storage, everyone's gonna need computing power and kind of you'll benefit from this digitization of everything, really.

• 50:34Speaker 01

  Absolutely, yeah. I, you know, I, I think, you know, I guess other, other things, if you're gonna go into a startup, you should, you should be, have the waves moving in your direction right now. I'm not, not going against them, right? I was gonna say, gee, you have death, taxes and data and the cloud all sort of pretty clear.

• 50:52Anthony Pompliano?

  I, I forget who says it, but somebody's like, you know, good team, bad market, market wins. Okay, team, good market, market wins, right? And so it's kind of like, you know, just make sure you're rolling in the direction of, of where the waves are going, you'll be all right.

• 51:07Speaker 01

  Absolutely, absolutely.

• 51:09Anthony Pompliano?

  Awesome, Ben. Listen, thank you so much for taking the time to do this. Where can people find you on the internet or find out more about storage if they want to go check it out?

• 51:15Speaker 01

  Yes, we're, we're storage, S T R J dot I O. And you'll go there if you want to become a storage operator, if you want to become a customer, both. Great place to go. And I'm at Golub B on Twitter, if you want to follow me. And we've got great blogs and things like that on the storage end as well.

• 51:38Anthony Pompliano?

  Awesome, man. Listen, thank you so much for doing this and we'll have to do it again in the future.

• 51:41Speaker 01

  Okay, hey, thanks, man.