Erin Austin01:05

Hello, everyone. Welcome to the hourly to exit podcast. I am so excited. I have a wonderful episode for you today with JoAnn Holmes and so welcome, JoAnn. Thank you so much for joining me.

JoAnn Holmes01:19

It is my pleasure. I have the greatest respect for your work, Erin. Thank you for having me.

Erin Austin01:23

Now, I'm gonna say this cuz during our pre-talk you described yourself as Jo. Do you like Jo or JoAnn?

JoAnn Holmes01:29

Jo sounds good to me..

Erin Austin01:31

Jo sounds good. Awesome. Thank you. So before we get into the episode, I'd love for you to introduce yourself.

JoAnn Holmes01:38

Thank you. So as Erin said, my name is JoAnn Holmes. I am an IPN digital asset attorney. I help clients in the Web3 space to monetize intellectual property and navigate the evolving Web3 legal landscape and negotiate successful deals. I manage intellectual property in about 140 countries. And over the course of my career, I have negotiated licensing agreements with companies like Disney, Microsoft, and the NFL.

And, uh, what is very exciting at this stage of my career is to think about ways that we can create more egalitarian, intellectual property based wealth through the tools that are being created in the Web3 digital asset space.

Erin Austin02:21

Oh, that is so fantastic. There's a million ways that our work intersects, but one way that it absolutely does not intersect is the web 3.0, which is why I'm so excited to have you here. I know nothing about it. And I first discovered Jo on the Biz Chicks Podcast where she was talking about web 3.0, and it blew my mind.

I had no idea that it was relevant to those of us in service-based business. And so, um, I immediately reached out to her and, and wanted to get to know her and have her come and talk to us about it. So, but first regarding the Biz Chicks Podcast. My audience knows that I'm a huge fan of Natalie and her podcast.

And so in shameless attempt to get her attention since she famously does not accept pitches for her podcast. Tell us how you got a coveted position on Biz Chicks.

JoAnn Holmes03:16

Well, let me tell you it was a huge honor for me as well. I've known Natalie for a number of years now. And I listen to podcasts. Uh, if I'm not working, there's a good chance I'm listening to podcasts and I'm always trying to learn because I am a business owner. I support business leaders. And so it is great for me to, as an attorney, have context for the way that

entrepreneurs and people who've grown and scaled businesses have thought about that. Many years ago I did a strategy session with Natalie and I am fairly tough to hold my attention unless I'm continuously learning, and I've just consistently found that I've learned from her over the course of years of listening to her podcast.

And so we have touched base and had experiences, we have daughters around the same age and have had some similar overlaps in family and parts of the country where we have lived. So it's just been a real , joy and blessing to be a friend with her over the years. And when I got the nod, I was like, absolutely tell me when and I am there.

Erin Austin04:21

Yes, that is absolutely a notch in the belt. So, and it was a fantastic episode, by the way, I will, uh, link to it in the show notes, cuz it was so informative and definitely changed the way I think about 3.0. That is why we're here today. I had been willfully ignorant.

Like, just absolutely like, no, no, no, no, no when it came to NFTs or cryptocurrency or blockchain, I'm like, no. And so now I'm like, okay, Joe's made it accessible to me. I think, I think I can learn this. So let's, let's dive in and talk about it. I mean, typically I have kind of know where I'm going with something, cuz I'm familiar with the topic.

I will say like everything I know about. I learned from you on this podcast. So I am going to, um, you know, kind of just ask some pretty broad questions and let you take us from there. So first, what the heck is web 3.0?

JoAnn Holmes05:20

Yeah, let's start at the beginning. And I'm going to borrow a little bit to set the table from Chris Dixon to talk about the transition, of web one out to web three, where we are. Are are rapidly approaching now. And I'd also like to share what I think of as the five tent poles of Web3. So if we think about web one, it was read web two was read, write and web three

it's spoken to be read, write, own. So if we go back to the early two thousands late nineties, we were probably all excited that we could read the newspaper online. And, that was literally just read the web was effectively a digital magazine. And then we had evolution that was very much catapulted by mobile phones and the ability to carry around an instrument that allowed us to communicate with the world at all times.

And so what that did is it moved us from just read to read, write. So I could make a Facebook post, I could share a photo on Instagram, I could offer or purchase something through the Amazon marketplace. And so, the result of that was that there were certain companies and their shareholders who gained most of the value from that phase of the internet.

So, those who were our centralized marketplace or our Google as a centralized data resource or Facebook as a central communication hub, um, those companies profited handsomely, but the people using those platforms did not so much, particularly if they weren't shareholders. So this next term of the internet is really focused on moving from what I just described to read, write own.

And that looks like creators starting to have more value in their participation. And so what does that mean? That means that you might form, for example, a Dow, which is a decentralized autonomous organization and the members of the Dow get to vote on the products and services that they're building. They get to, potentially own an NFT that has a value that could appreciate over time.

That NFT might be an authentication tool to have access to the Dow. Um, we are in the midst, here in the United States have a lot of regulatory review happening in this space, but once we have more clarity, it may be possible for you to buy tokens the way that you buy shares of a company and have that asset appreciate or depreciate like any asset can do.

So we're really moving into a space that is in many ways, akin to the early internet, where the technology and building blocks are being built out. There is admittedly volatility associated with that, but there's a lot of room for discovery and for people with talent to come into the space and think about how they would want to contribute.

Um, so that's a sense of how the internet has evolved in terms of the tent poles of web three, there are five. So the first is cryptocurrency. Um, there are over 10,000 cryptocurrencies, but ones that people might be most familiar with might be Bitcoin or Ethereum. And those are currencies of digital networks that, um, facilitate transactions through computers around the world.

The second is decentralized finance. And so just like we have resources in the traditional financial system for things like making payments or earning yields on cash through like a CD or a money market account or using collateral to get a loan. All of those things exist now in decentralized finance and web three.

So that's the second 10 pole. The third 10 pole we've mentioned, which are NFTs or non fungible tokens. And those are really, digital assets that are a deed of ownership, like the deed to your house or your car. And then, there's a thing that's associated with that deed. So you might have a physical piece of paper, that's the deed to your house, but the thing associated with it is your physical home, where you live. The same thing happens with NFTs or non fungible tokens.

You might have a token that relates to a digital piece of art or a piece of sports memorabilia or NFTs that are linked to physical real estate. So non fungible tokens are the third tent pole. Closely dovetailing into that,

we just mentioned Dows or decentralized autonomous organizations. So those are the new wave of corporations and LLCs where people come together from literally all over the world, uh, for a given purpose and with a common treasury or digital bank account. And so people might come together because they want to invest together.

They might come together because they wanna create a product or service. They might come together because they want to support a technology or because they want to support a charity and the members get to vote and participate in making decisions around how that organization is going to operate and how they're going to use the treasury funds.

So that's the fourth, 10 pole and the fifth and final is the metaverse, which is this broad virtual interaction that we are all having and will have all over the world. Um, in online spaces. So for those who have kids, maybe your kids play Roblox or Minecraft, and that is a web two version of, um, the metaverse where corporations own those games and all of the assets, the skins and swords and all of the things that are used to play or build in those spaces. In a web three version, instead of those skins, for example, or, clothing or shoes, or what have you, that people

might be using in Roblox and Minecraft. Instead, those are going to be NFTs and they're going to be assets that ideally would be interoperable. So you can take them out of one game setting and use them in another one and they will have value, just like other types of collectibles. For example, such that if other people want to own that skin, you've got the really cool,

I don't know, athletic gear or you've got the really fun sneakers, right. That NFT could continue to have appreciating value because it would be yours as opposed to a skin in Roblox, that you really would be most likely offending the terms of the game if you tried to take them out and use them as an asset to buy or sell elsewise.

So again, if we just do a quick recap and I know I shot a lot of information at everybody.

Erin Austin11:32

We might have to have a handout to go with this one.

JoAnn Holmes11:36

The tentpoles of Web3 are cryptocurrency, which is the monetary unit decentralized finance, which is the corollary to traditional finance, uh, NFTs, which are certificates of ownership. For all kinds of different assets Dows, which are the organizations of people all around the world who come together to work on a given purpose.

And finally, the metaverse, which is the virtual space that people do and will in the future come together in to collaborate and interact with one another.

Erin Austin12:07

All right. So one of the things that's always confused me about cryptocurrency, a lot of things confused me, but about cryptocurrency in particular. Where does the original value in the cryptocurrency come from? Like, is there something behind it how does the value get into cryptocurrency?

JoAnn Holmes12:24

Absolutely. So I know that you share this with your audience, but as a fellow attorney, let me just remind everyone that what I'm sharing here is not legal or financial advice and especially in a nascent and volatile space, like web three and cryptocurrencies, it's a great idea to speak to your financial advisor or

your legal counsel to get the kind of support that you need to make good decisions. There is, uh, a term in web free called do your own research. And so I'm a huge fan of people finding reputable resources and checking and double checking anything you hear from any one resource. As we're recording the podcast in the spring of 2022, there's a lot of volatility happening in financial markets, including the crypto markets.

And so Erin, to answer your question, um, where does the value come from? If we think back historically, humans have traded lots of things over the course of time, to express value and we as Americans now, Use a standard monetary unit called the dollar and it is backed by the full faith and credit of the United States.

But it's also backed by the fact that we believe that dollars have value. There are people all over the world whose nations have currency that is not as stable as we have been fortunate to enjoy here in the United States. So effectively any monetary unit is going to be the result of people believing that it has value.

As I mentioned before, there are over 10,000 different cryptocurrencies. And so it might be useful to break them down into two types. So one type of cryptocurrency like Bitcoin, E saw for Solana, all of these are going to be the coins of a blockchain. And what is a blockchain? It's open source software that serves as a digital ledger. And so,

if I wanted to pay you for, creating a piece of digital art, then you would set a price for that. And we would use our digital wallets to be able to transfer that. And one of the ways that we might transfer your digital art for my monetary compensation is through using east, which is the coin of the Ethereum network.

Ethereum blockchain is a network where people are able to conduct transactions, right? So it is, again, just a blockchain is just open source software. We all interact with open source software every day. And the currency of a blockchain is going to be its coin. The coin of Ethereum is E the coin of Bitcoin is a little confusing, cuz it's also called Bitcoin.

The coin of Solana is gonna be solve outside of that, there are thousands of cryptocurrencies that are not coins because they don't have their own underlying blockchain, right. So they might be built on Ethereum or they might be built on some other blockchain. And so when we're thinking about where does the value come from?

It comes from the core economics of any monetary unit and thinking about, is there scarcity or is there an infinite number of the cryptocurrency Bitcoin, for example, uh, is coded such that there will never be more than 21 million of them. So the value in a cryptocurrency is going to

depend on things like people's belief that it has value network effects of people coming into the space and being willing to pay for that coin or that larger cryptocurrency as it goes up or down, it's going to depend on the utility. So, the Ethereum blockchain network has a lot of traffic because lots of developers are building applications on that blockchain.

And so anytime there's popularity in an asset, then there's going to be a potentially price appreciation, right? So there's no one simple answer around where the value comes from. And for a lot of reasons, including regulatory uncertainty, there are people who are going to feel most comfortable staying out of the space.

But if you are willing to do your research in any given cryptocurrency, and one is not the same as the next. It is worthwhile to do your research, understand why any given cryptocurrency has the value that it does look at how it has trended over time. Look at what macroeconomic factors impact its value and maybe

start, if you're going to get into the space, with no more than you are willing to experiment with, to learn and understand whether it's a good space for you to participate in terms of an investment asset.

Erin Austin16:56

Wow. Okay. Got it. Why, why so many? Is it. Were there specific to different types of industries or locations or, or all of the above?

JoAnn Holmes17:04

It's because anyone can spin up a cryptocurrency at any time. You and I could do it right now. They don't have to be backed by anything. And so, because we're talking about over 10,000 different assets, it's like saying, why does this stock have value? Right? Like there are so many stocks that are traded on different markets across the world that have different value in a market.

And that value is going to. Up or down over the course of time. And so it's really necessary to, again, do your own research and understand what are you investing in? What are the reasons why it has the value that it does? What are the reasons why that value might fluctuate? Stablecoin, for example, are

one of the fundamental currencies of the web three space, because they're supposed to be pegged to the us dollar or the Euro or the yen. But even stable currencies can have differences in the reasons why they maintain their value or they don't. And so there's not one way to explain, um, cryptocurrency at large.

There absolutely are scams and bad actors. And so I always encourage people to spend some time and learn the space. Don't succumb to FOMO. Don't jump in because someone told you to, understand that with any nascent technology, and we are still very much in the early stages, there's going to be a lot of volatility and even people with good intentions are going to sometimes make bad decisions.

And so. I think where our money is, we tend to have attention. Understanding your risk tolerance, maybe not gambling, anything you can't afford to lose, but just understanding the space. And if you feel more comfortable, for example, amongst the listeners to saying, I don't really know that I want to own a cryptocurrency, but I think there's promise in this technology, then maybe you invest in traditional stocks that offer products or services to the web three space.

So there are many different ways that you can have exposure in this space. It all depends on what you want to achieve and what your confidence level is in keeping abreast of how the space evolves.

Erin Austin19:11

Now I know you're not gonna make a prediction, but do you think that generally that as this area matures, that automatically lots of these are gonna just fall away in that one or two or a dozen or whatever it will be, will kind of rise to the top and be the standards. And everyone else will just be kind of go to the way of the beta max.

JoAnn Holmes19:30

Yeah. I mean, I think you make a great, analogy there, Erin in. We don't know which technologies are going to prevail. I mean, I've earned my living for over 20 years as an IP and technology attorney. And so this is something that I'm just fascinated by personally. And, and it is, it's something that I am so interested in that I've pivoted my career to focus in this space, but that having been said, I don't know that anyone can say with

absolute confidence that we know which technologies are going to win in the earliest stages of, of my starting to use the internet consistently in the late 90s and early 2000s I couldn't have imagined how integrated the internet would become into our lives. And in effectively every facet of my day from waking up to going to sleep, there's something I'm doing

that's an engagement with the internet. I couldn't have imagined Airbnb and we'd go live in strangers homes on vacation Or that we would get in the car with strangers using Lyft or Uber. And so I think, um, the volatility and the unknowns are to be expected. And it's a question of what is your comfort level with the unknown and how much

risk is anyone given person willing to take? I think there are absolutely many cryptocurrencies and many technologies, frankly, that are going to fall off over the course of time. Some things might be ahead of their time. And so I think that it is just an issue of. Again, some people want set it and forget it.

They wanna buy the S and P 500 and they want that to be the end of their investment participation. And others want to be at the avant guard of technology. And so it's really a question around where is your risk tolerance? Where are you interested? Where is your natural curiosity? Are you someone who wants to go down the rabbit holes and learn those five different tent poles?

Some people, you know, don't have an interest in investing in certain aspects of web three, but do others, some people will work for a DAO for example, but they don't buy or sell NFTs. I own, as I think you now exactly one NFT and I bought it, not as an investment, I bought it because it was another black woman whose focus is to bring more women of color into the web three space.

And I just wanted to support her because I believed in what she did. I wasn't expecting I would be able to retire off the asset. I was just trying to show my support. There are people who work, as I said in DAOs because they want to be able to create something that they don't have a way to be able to participate in creating in our traditional business ecosystems.

There are people who are in DAOs because during the pandemic. Certain doctors were able to support patients through using maybe Oculus or metas, uh, virtual reality glasses, or, you know, there are so many ways that are promising and fruitful and I think will be beneficial to society. There are others who I think do not have good intentions and are taking advantage of

the fact that we're in the early stages of this, but I think based on having listened to your podcast, that your audience is a pretty savvy group. And so finding good resources, I'll give you one, for example, I I'm a visual learner. I really like to go on YouTube and watch whiteboard crypto, um, because they draw out concepts and then I can understand.

Oh, okay. That makes sense to me. Or there's a new idea that I got just introduced to let me go read or listen to a podcast or. Watch something on YouTube or talk to people in my peer group. And try to explore that more. I've I've dedicated a lot of time in the space and it's still always a learning process.

Erin Austin23:11

Wow. Okay. So you have mentioned DAOs a few times, and that was one of the things that really kind of struck me when I first heard about you. And so let's double back on what that is. And so you made the analogy to, you know, LLCs and corporations. Are they legal entities?

JoAnn Holmes23:33

It depends. So, you know, Erin, you and I, um, I imagine that we are not dissimilar in that one. Our first duty as counsel, as attorneys is to, think about putting our client's best interest first. And so that is called our fiduciary duty. And so when I am speaking to my clients, my very first intention is to protect them and their personal assets and their families.

the reality is when people come together for a common purpose with a bank account, which is the way that DAOs are sometimes simplified. In the absence of having some kind of company rapper like an LLC or a corporation, the default is going to be to a general partnership under the laws of the United States, which means there's joint and several liability.

You have liability for what the other members are doing, and you don't have control. Over what the other members are doing. And the reality in the us is that we are a very litigious society. And effectively anybody can Sue anybody for anything. It doesn't even have to be a, a just claim. It can be a claim that then a court has to decide whether it should move forward.

And I'm very fortunate that in my work, I am speaking to people who have good intentions in this space. One of my first thoughts, if they're talking about a DAO, is that risk exposure of a general partnership. There is an ethos in the web's. Three space that is very much grounded in community.

And so there is a balancing act between respecting the ethos of the space and the reality that law still applies. Uh, and so, you know, one of the things that might happen is. And we're still very early. The Biden administration issued an executive order for regulatory bodies across the federal government here in the United States to take a look at digital assets and think about how we can have effective and useful regulation of this space.

For the protection of all kinds of people who are coming in and participating in web three. So from the perspective of thinking about the laws that apply and what DAO members want to be mindful of, there's two things. There's a regulatory or statutory side. You've got agencies like the securities in exchange commission.

Um, the CFT, the, consumer financial protection.

Erin Austin26:00

Okay.

JoAnn Holmes26:00

Bureau, that's it. But there are a number of, uh, us federal regulatory agencies who are looking at this space. Then you have a thing called the plaintiffs bar and for the audience, what that is, are attorneys who are plaintiffs, who file lawsuits,

and really look at that gray area in the law and how people are acting and will use our legal system to argue through whether someone has behaved in a way that's in compliance with the law or not. So what that means is we've got the regulatory side of things and the litigation side of things that both in real time are impacting

the evolving legal landscape in web three. So going back to thinking through DAOs, when I'm speaking to people who are interested in Dows, my first principle is protect yourself, protect your members, which is a good reason to set up an LLC or a corporation, depending on what the objectives are. There is in the state of Wyoming, a concept of a Wyoming DAO LLC,

and that is a version one. The legislation that set that up is, a reflection of the fact that in the United States, our, our given states serve as incubators to try new theories and see how they work. And so, um, it's not something that I think is without its flaws, but if we fall back to what we're accustomed to in terms of LLCs and corporations, as long as someone is doing the things that need to be done to maintain the protections of those kinds of organizations, that is something to think about.

So what does that look like? A group of people come together and say, we want to create a product or service and offer it to a marketplace, okay. Well then it's a good idea to have a conversation with an attorney about setting up an LLC or a corporation so that you were doing business through the protection of that entity rather than

exposing yourself as general partners. I've mentioned a few times that DAOs are a group of people with a common cause and a bank account. That bank account is referred to as a treasury. And most often it is a digital wallet on a blockchain, right? And there's cryptocurrency as the assets in that treasury.

Well, some people have authority to move money in and out of that treasury. If you are someone who is a leader in the DAO, particularly if you are someone who has authority to move funds in and out of that treasury, you have a higher target, um, in terms of your risk profile, if you're acting outside of the protections of an LLC or a corporation as a DAO member.

So that's all the more reason you wanna think about protecting yourself, but there are some new innovative things that. I cannot speak to the audience and say are without risk, but are closer to the safe side of regulation. And so one good example that I like to use is Beyonce because I like Beyonce. So there are several different Beyonce fan clubs, and let's say, Beyonce said, I'm going to create her fans are called the beehive.

So if Beyonce said I'm going to create a beehive DAO, and I'm going to take 5% of my ticket sales from a concert, and I'm gonna put that money in the treasury of the beehive Dow. Now she might say, I want my fans to participate in raising funds for the treasury as well. And so, um, if you would like to buy an NFT of me from my concert, right.

And an NFT is a nonedible token, it's a deed of ownership linked to some kind of asset. So the asset might be a photograph of Beyonce on stage, or even a video of Beyonce on stage that, um, you can only buy, if you know this, you buy this and it is your authentication tool into the beehive DAO, right. And the funds that you paid to get that

digital piece of art of Beyonce, all those funds are also going to go into the treasury. So let's say theoretically, she's given 5% of her ticket sales to the beehive DAO and people have bought NFTs to remember their experience at her concert that they wanna keep in their digital wallet and maybe show at their house.

It's a flex with their friends that I was at the best Beyonce concert ever, right. So let's say 10 million have been raised for the beehive DAO. Now, if you own that NFT, then you are a member of the beehive DAO and you might get to do things like vote on what charities the beehive DAO should support. Um, Beyonce has supported other up and coming artists, right?

So maybe some portion of the treasury, the membership will vote and say, we wanna support this artist. And we're going to give some component of the funds to, to, to launch this artist's career who we all believe in. It might be, we know that Beyonce has a partnership with Adida. For her Ivy park athletic line, it might be that there's one piece in that line

you can only buy if you are a member of the beehive, right? So that's a product service link. It might be that when she's on tour, there is a closed audience of 20 people who get to meet with her before or after the concert. But the only way that you can get access to that, you know, 20 group of 20 people who can see her is if you're a member of the beha Dow.

So effectively, what we've done is not looked to create a security, not something that's akin to a share in a corporation, but something that gives members a component of governance around how that treasury runs, a piece of, um, access to the celebrity, because it'd be super cool to get to see Beyonce before, after a concert and an opportunity to buy a product or service associated with her that only members get access to.

So in some ways it's a more modern form of a fan club. And over the course of time, once we have more regulatory clarity, you know, there might be tokens associated with being in the Beyonce fan club and maybe those tokens trade on a marketplace with value that appreciates or depre. There's a lot, going back to the Airbnb and Lyft examples of the early stages of the internet.

There's a lot we don't know right now, but the example that I was making around the ethos of web three, being community value within the regulatory guidance that we net have now, as we're speaking today in the spring of 2022, that example of Beyonce, um, being who she is with her corporation, that I'm sure is very well organized and having an arm that is a DAO that gives her truest fans an opportunity to feel like they have a more meaningful way to connect with her,

that is one of the current creative ways that DAOs can be used.

Erin Austin32:33

That is awesome. So you covered a lot of territory there and, but one of the things I wanna, um, follow up on is how we're going to protect members of DAOs. And I'm thinking of, you know, the state by state protections that are coming online for data protections. And so I'm hoping very much that behind the administration or the federal government will get ahead of this to make sure that we don't have the problems that we're having on other forms of protections, like data protections, even, you know, franchises lately have been coming up a lot and that are all state by state.

So. Is the federal government ready to kind of get ahead of, or well, behind I'm clearly behind, like where are they in that kind of understanding web 3.0 and making sure there's some protections around it?

JoAnn Holmes33:25

To my understanding, uh, right now, different regulatory agencies have some disagreements in place, the commodities regulatory agency is disagreeing with securities and exchange commission around which of them should have jurisdiction over which digital assets.

Uh, so I think that there is a lot of uncertainty and we have to be mindful as you started to allude to Erin, we don't only have federal regulation. We also. State level regulation. And so, depending on, let's say for example, what a cryptocurrency exchange is doing, they might be deemed as money service providers or money transmitters.

And in some cases, every one of the 50 states has their own applicable laws. And so there's a real maze of regulation that needs to be managed, not to mention the fact that web three is global. And so, even if we comply with the various states and federal law at the us level, if you have customers outside of the states, which most cryptocurrency exchanges for example are going to have, then you've got laws of potentially every country in the world that you've got to think about.

And so I. There is no one single answer. I can tell you that some cryptocurrency exchanges for example, will try to gate off. Um, let's say for example, us citizens to try to be outside the guise of us laws. We know, particularly when we're talking about privacy law. the GDPR, which is the, the, you know, now famous European privacy legislation has a long arm reach with the intention of protecting European citizens, no matter where they are in the world.

And then when you have different countries who have different laws

for their citizens, no matter where they are in the world, I will say it's not boring. if we add to that, uh, then we also realize that there are ways that you can have digital wallets that are not going to be transparent as to who owns them.

So let's say that you are on an exchange like Coinbase, for example, they are going to be know. And anti money laundering standards and compliance that a, an established cryptocurrency exchange like Coinbase is going to be very careful to comply with. So that means when you're setting up an account, you're going to need to submit your driver's license or passport so that they can verify.

That you are, who you say you are. So that frankly there can be enforcement against those who are bad actors. But the reality of the blockchain space is that it is in many ways created to circumvent middle actors like financial institutions it's in many ways created to be peer to peer. And, and one of the things to think about is we are often looking at this from the perspective of Americans, right?

And so we have access to banks, to credit unions, to credit cards, to newer digital FinTech resources, where we really don't have to worry about the ability to move money. whereas much of the world does not have access to the traditional financial institutions, or if you're someone who works in the developed world, but you're sending remittances back home to your family in a part of the world that doesn't have the financial blessings that we have

for example, in the United States, you might be paying a, a middle institution like a Western union, a substantial fee. You might try to send a wire and for reasons outside of your control, the bank decides they're not going to send that wire through. You don't have to be a bad actor to not have been well served by our current financial systems.

And so when we're talking about regulation, we are still in an early stage, but at the same time, we're talking about this on a global basis with people who are approaching it from very different financial circumstances.

Erin Austin37:23

Gotcha. So this is, I mean, far reaching conversation, but I'm gonna drag us back. To our audience, which is the service based expertise based business. And so, uh, a lot of us are creating online communities and we're looking at, in particular, how do we build assets on our business? You know, our hourly to exit podcast is about building a business that has exclusivity in it.

We are owning assets, we're building a business that would have value to a potential purchaser. So. Where in the web 3.0, do we fall?

JoAnn Holmes38:01

I love this question, Erin. I mean, I'm like you a long time intellectual property licensing attorney, and I love. Helping my client understand how to monetize their IP assets. Sometimes that comes in the form of expertise. And so if the audience is listening and you have a background in finance, you are a CPA, you are a financial advisor,

you perhaps help to manage the treasury within a corporate entity, you are immediately going to have value in this space because so many corporations and so many retail investors and, and so many people just trying to, frankly, do their taxes are really in need of quality resources to help them understand what they should be doing.

And so. If, uh, if you do a Google search for CPA and crypto, or for corporate treasury and crypto, uh, or for financial advisor and crypto, or you do those same searches, not on Google, but in LinkedIn look and see what's being written. What podcasts are out there, what YouTube videos are out there. Look at what people in your industry are doing in the space to give you clues around what might be interesting for you and what kind of value. So if we continue with the example of a financial planner and you have clients coming to you saying, I want

exposure to this space. Maybe you develop a proprietary system to help a client understand for your risk tolerance. This is a reasonable percentage of your portfolio to invest in crypto assets. Maybe you do some research and look back at legacy and see, well in a prosperous crypto portfolio, what component of that is, um, and going back to some of the terms we used before, bitcoin Ethereum or Solana, which are sometimes called layer one coins or the currency of a blockchain. What component of a successful portfolio includes those types of coins versus NFTs? Um, does it make sense? Maybe you're thinking, wow, there's a concept that I'd really love to pursue. I have a friend overseas, should we come together and form a DAO around this?

Right. And so, um, that DAO again is going to have a treasury. It's going to have some component of funds that need to be managed. Do you want to build some intellectual property around best practices for DAO treasury management? Whatever your skillset is, be it finance, marketing, legal, medicine for that matter if you have a professional expertise,

there is likely to be a space for you where you can build proprietary assets in the web three space. Because if we step back to the late nineties and early two thousands, as we've spoken about a few times, um, during our conversation today, Could I have imagined, I mean, I, I made a bet in 1999 when I graduated from law school, that intellectual property was going to continue to be in demand.

But could I have imagined that all of web three would be intellectual property?

No, I wouldn't have even known what web three was. So if, if you have an interest in this space, what I love particularly for traditionally marginalized communities is you have. One of the very rare instances where everybody's on equal footing, we're all so early.

We're all being humbled by how much we don't know. And so if you get in the space and take an in a genuine interest, uh, really take the time to get knowledgeable and educate yourself, I'm pretty sure ideation will start to happen around unmet needs in the space where you can provide value and types of intellectual property that you can build up to support your community and offer as a product or service.

Erin Austin41:43

That is great. We do talk a lot about niches and about specialization here and how important that is. Service providers, especially if we're small, um, having that, like having that unique market position is hugely important to rise above the noise and, uh, to be known as that go-to person, in your space.

And so, yeah, that is a great idea to if this is of interest to you, to add this as a vertical for, for your business and, um, And that there would be a lot of opportunities there. So you also mentioned, uh, you know, one of the things you started with actually is working with, disadvantaged communities and a way to help those who have, um, less access to certain services.

So tell me, like, how are you, working in that space and using your knowledge in this area?

JoAnn Holmes42:35

So, uh, just to give a little bit of context again, I started practicing an intellectual property in 1999. I'm also a single mom and I've been, been a single mom my entire career. So when I was a baby lawyer, I was also a new mom. And literally just trying to keep all of these things, moving forward, not harm my child and not harm my clients as I was learning how to manage both at the same time.

And so I was learning, uh, a lot, but I really didn't have a macroeconomic sense of the shift that was happening as the internet came online on a global basis. And now looking back 20 plus years into my career as an IP attorney, it's really apparent to me what's happening, um, with this shift to web three. And so what happened with web two is the enormity of value and wealth went to a very select few people. As a black woman,

I would really love for communities of color and for women and for people in the developing world to have opportunities to gain more wealth from their contributions. And so what that looks like for me is, if someone is a talented artist and has access to the internet in the developing world, then they can go on a marketplace.

They don't need to have access to Christy's or Soha be to be able to put their work online, open a digital wallet and be paid by those who value their work. Uh, I think that again, it's hard to imagine all of the possibilities, but frankly, one of the reasons I'm in this space is because I want people to see and hear someone who looks like me and like you and think, well, wow.

If Joe is in this space, then maybe I have something to contribute too. I learned what I know and what we've spoken about today, certainly with the benefit of it all being intellectual property and me having been an IP attorney for a couple decades, but really I used free resources. I used YouTube, I used podcasts.

I've used internet research. I used discord groups and Twitter and LinkedIn to learn from peer groups to check and double check the information I was getting. And that is not to say that there aren't risks associated with making any judgment calls. But I think that oftentimes, um, communities of color, marginalized communities have been left out of the wealth vehicles here in the United States and elsewhere in the world.

And I think that representation matters. And so, knowing that there is a lot of fear, uncertainty and doubt, uh, it's referred to as FUD in the web three space, knowing that that exists, knowing that bad actors exist, having had heartbreaking conversations with people who have lost substantial amounts of money due to bad actors or good actors who made bad decisions.

I'm really committed to sharing quality information so that people have a starting point and they can make informed decisions. People can walk away from this conversation and say, that's not for me. Thanks very much, Joe. I don't wanna participate. But I hope that what it will at least do is spark an interest so that people can be curious and think about where are the opportunities for me to participate and gain value

from that participation? And it really, in so many ways, Erin just comes down to when I was a little girl, there were no lawyers in my family. I didn't know any lawyers, but I saw Claire Huxtable on TV. And I thought, well, at least that's an image that I could kind of try to grow up and be a lawyer like her.

So I don't, I don't want to, uh, be Pollyannish, but I do want people to know that there are extraordinary opportunities in this space, no matter what you look like, no matter what background you come from. Um, and I'm really excited about the promise of breaking down some of the historical barriers for people to participate in gaining value.

Erin Austin46:29

Yeah. Yeah. I like, that's why I was so excited about having you on the show because too many service, providers, aren't thinking. Building assets. They aren't thinking about ownership. Like they know they own their expertise and yes, they get a good income from it, but what are they building? What are they owning?

And only way to build wealth is through ownership, whether it's physical or digital asset. And so that is, yeah, we're both thinking that same drum. And I do think that, um, this has been tremendously helpful. So. What, where should someone start? I mean, you mentioned some resources online. If someone wanted to, um, say like, is this something that I may be able to incorporate into my business?

Like, where should they start?

JoAnn Holmes47:17

I think a lot. Depends on what stage of business you are in what your goals are. Um, you know, we have seen over the past year to 18 months that companies like Tesla and MicroStrategy have started to put Bitcoin on their corporate treasuries. we have seen that Jamie diamond has spoken very poorly of the web three space historically, but now JP Morgan has a presence in the meta.

So, uh, I think it's important to think about what your business objectives objectives are. Again, we have five different tent poles under the guise of web three. So for some business owners, they might say, I am willing to take 2% of my reserves in my business and buy some cryptocurrency and, you know, let it sit there for some time and see if it appreciates as I might instead buy a stock or buy, a piece of real estate or what have you.

So for those who want to have a cryptocurrency in the space, your business might choose to take a component of your treasury and invest that way. For those who, for example, say, you know what? I'm a celebrity, I'm an influencer. I am someone who has already built an extraordinary community. Um, that believe in me, believe in what I'm building.

Maybe you're an ESG focus. Organization, maybe you issue an NFT and maybe that's a way to get your community even more involved and you take the funds that are raised from that NFT. And then you allow the, uh, buyers of that NFT who maybe are members of your DAO to plant trees. In a local community, maybe an urban or underserved community.

Maybe you go out and, you know, pay school, lunch fees at a school of kids in an underserved community. Um, a lot depends on what your business objectives are, what stage you are in business. What makes sense for the audience you're trying to communicate with? I think there are no magic bullets. And so, because certain projects, let's say for example, the board yacht club, um, it's been said over recent times that if you bought a board eight for two or $300 around April, may of 2021, with all of the different derivative works

that have come out of that. You're now up over 400% percent, I think it is in, in your investment in that digital asset. But then there are NFT projects that come online all the time that have no community and that are not going to be purchased. And I think. There can be euphoria.

And in the midst of euphoria, people can have some unrealistic expectations. When I work with my clients, one of the things that I do is help them roadmap and white paper, uh, their plan for their project. And we have very honest conversations so I can understand what their objectives are and I can give them visibility to the legal issues that impact what they're trying to build. I think it is no different than traditional business in the sense that you need to understand how you're providing value. Why are people going to invest in what you're offering in a web three space? And, you know, things change. You will need to pivot.

We are again very early and there will be iterations of any offering of a product or service in this space, but starting from an understanding of. What resources do you have? Do I have community, do I have excess funds that I'm willing to, you know, tolerate some volatility through to see if it's an appreciating asset?

Do I have the ability to do data analytics to understand which metaverse worlds are going to have cadence with which audiences? There are so many different ways that you can participate in this space, depending on what your time, your talents and your offerings are. So there's no one size fits all. I would encourage people again to either do your own research, or if you think you have something valuable to offer in the space, build community.

Jump into a discord room. Um, get on Twitter, get on LinkedIn. There are very inviting communities where you can have conversations, and if you do need help around the legal issues, I would encourage you to speak to an attorney who spends their time, day in and day out in the web free space. Even with my long background in intellectual property, web three is different.

It is constantly evolving. And if you want someone who can give you good guidance around the realities of this space at any given moment in time, it's one of those areas, not unlike IP, where I would never encourage speaking to an attorney who dabbles in

this

Erin Austin52:04

I love that word dabbles always. She's like don't, you know like I don't dabble. Don't do someone who dabbles it is. It is danger. Danger. Yes. Dabbling is danger. Yes, absolutely. So. this podcast is actually fairly meta. You know, it is about helping female founders of expertise-based businesses grow a business that they can hopefully sell someday.

And that is part of my mission with my business as well. And so I like to ask my guest, do you have a plan to grow your business, to sell it?

JoAnn Holmes52:38

You know, I have been in business for myself for approaching six years now, six or seven years, I haven't done the math lately. And before that I had the good fortune of serving on management teams of international companies. Um, very different skill sets, being a so entrepreneur versus being, um, in the leadership of a global company.

And. I have tried different things. You know, I think that your listeners will not be surprised that entrepreneurship is experimentation. It is trying different things. Seeing does this feel right? Does this feel like a good fit? Is this the highest and best use of my time and talents? I'm a person of faith, Erin.

And so I pray my way through everything and figuring out, you know, is this what I should be doing in this space right now? And it's also very helpful on tough days where things aren't going the way I want them to go. But I say all of that to. it may be something that I do in the future, you know, for, uh, going back to Natalie Al, she always says it's hard to use your superpower on yourself.

Um, I'm very grateful that people have been kind in their feedback for my knowledge in the web-free space, but I honestly am. Still early enough that I don't really know what I should be offering in terms of an annuity, a residual product, , that would do what the, the businesses that are saleable would offer.

And so I'm giving myself some space and grace to really listen to the community, listen to the projects that ask for my time and my feedback on what they're building. I will tell you that my consistent prayer is that my time and talents are used for the glory of God. And when I am talking to projects and thinking about how I can be helpful for them, I'm really trying to understand, am I the right person to serve them?

Do I have the skillset, or can I grow into the skillset? That would be best to serve them. So still being only six months into offering web three legal services, which I have to remind myself sometimes I'm like, Okay. This whole industry is early, so it's okay that I'm still relatively early in it. But I'm not clear yet about the product market fit.

And I had committed to myself that I would allow myself a little bit more than six months

to figure out what that product market fit would be. But I have to tell you on a personal note, I am so very grateful to be at a stage in my career as an attorney where I'm just lit up, with excitement about how this space is moving and evolving and the opportunities that are arising from it.

It's not again, I don't wanna be Pollyannish. It's not like I don't have, , you know, my questions about the space, like anyone else would, but I really see extraordinary opportunities. And so I think in due course, I'll have a better answer, but I'm, I'm too new with this career transition to really be able to answer you confidently.

I hope that's okay.

Erin Austin55:38

is a great answer. No, absolutely. And you know, again, another intersection between what you and I do is using our expertise, like not just to serve nonprofits, but you know, any business can be mission-driven. If we are using a. Our expertise to help build an economy that works for more of us. And so that is part of the mission here, you know, specifically with respect to female founders who, you know, I believe that wealth in the hands of women can change the world.

Um, but also, um, other communities and, uh, and so that we can feel it. Actually helped free me as I was making a transition from more traditional legal practice to one that was more focused on who I worked with, trying to figure out like, how do I use my big company experience? And, uh, and when I realized, well, you know, if I am, you know, helping people magnify their impact, Then that magnifies my impact.

Right. And it doesn't have to just be, you know, with nonprofits, like people think you don't, it's not just the Patagonia of the world or the nonprofits of the world, but we're all have the ability to do great things with our wealth. So I love that. We, we, we definitely are our in alignment on that.

So I know what I wanted to say as you were talking, which is, I have been thinking about adding transcripts to website pages for my podcast and I haven't done it yet. And this episode has accelerated my decision to absolutely do this. There's been so much fantastic information in this. I absolutely want people to listen to you because you you're enthusiasm and love for this topic is so clear as you've been speaking, but then they're gonna need to get the transcript and study it

because there's so much goodness in here. Speaking of, you know, creating a society that is more equitable, we love to let people give a shout out to organizations or people that they know and love that are working to create a more equitable society. Is there someone you'd like to share with us?

JoAnn Holmes57:46

There's an organization that I feel is so worthy of being identified and supported. I've mentioned in our conversation that I'm a mom. Um, probably more than a decade ago, I learned that girls particularly in the developing world are sold into sex trafficking and, or are married off to men much much their senior.

And oftentimes this has happened because there's not a financial resource in the family to support all of the children, and girls' education is not prioritized relative to boys in much of the developing world. And so, uh, because I'm a lawyer. My immediate thought was, well, I need to participate in a solution to this.

I can't unknow this information, especially as the mom of a girl. And especially as someone who was blessed to have parents and an extended family that always supported me academically and believed in my capability. And that carries me to this day. So here, based in Atlanta, where I am. Is an organization called care.

People might have heard of care packages from decades ago, but for quite some time now care's focus has been on three tent poles for women and girls in the developing world, education, healthcare and financial resources. And so what we know from the research is that when a girl is educated, she is less likely to be sold into sex trafficking or forced into marriage.

We know that when a woman has financial resources of her own and can contribute to her household. She is less likely to be beaten or treated poorly by her spouse or her extended family. And we know that, uh, there are very serious risks to maternal health and mortality, uh, for women who don't have access to the resources we have in the developed world.

So. When a girl is educated, she grows up to become an educated mom. She is more likely to put a premium on education to her children that has ripple effects in her village, in her community and her city and her nation and our world.

So the reason why I support care financially, uh, and I've actually been to Congress a couple of times to also support legislation that care has worked around is because

I am a lawyer. I believe in results. I look at facts. I look at problems and I think about solutions. And care has been in all the places that many of us learn about when a crisis hits, but they've been there on a sustainable basis, focusing around education, healthcare, and financial resources for women and girls.

Erin Austin01:00:31

That is fantastic. Thank you for sharing that. And we will have that in the show notes as well. We're gonna have like the ethics show notes at the end of this one. And so finally, where can people find you?

JoAnn Holmes01:00:43

Thank you. It's just been so fun talking to you. Thank you for having me, Erin. I'm excited for your audience to hear this. I'm very active on LinkedIn. Uh, my name is Joanne Holmes, J O a N N H O L M E S. My website isHolmes@law.com. I am on Twitter, also with the handle homes at law, but I am again, most active on LinkedIn.

And so. I would encourage people to reach out to me. Um, there, uh, I'd love to follow the projects and things that folks are interested in. And that tends to be the place where I let folks know what I'm doing or what I'm teaching, what I'm sharing, what I have to offer, with the web three community.

And in terms of clients who I work with, they tend to be professionals who are establishing organizations moving out of web two into web three. So sometimes that's investors. Sometimes that's consultants who are helping bridge the gap between physical and digital assets or, people with computer or data analytics, backgrounds, innovators who are creating new opportunities in the web three space.

Um, and who have had most likely success in their professional life, in the web two space and seeing where the opportunities are. So again, I love seeing new projects. Give me some grace. If I don't get back to immediately, my calendar is a little crazy,

Erin Austin01:01:59

I bet

JoAnn Holmes01:02:00

but it's really fun to connect.

Erin Austin01:02:04

That is wonderful. Thank you so much, Jo, for being so generous with your time and your wisdom. This has been an amazing conversation, and I imagine you will receive a number of questions and follow-ups. So I look forward to the next time. Thank you again.

JoAnn Holmes01:02:20

Thank you, Errin.