Getting Creative at Scale
Expanding the Utility of NFTs for Media
The brief period of extreme hype over NFTs mostly centered around static, collectible JPEGs, but there are actually far more use cases that can unlock dynamic functionality and provide long-term value.
The unique, programmable assets serve as carriers of original media, providing a home and distribution channel for content across the blockchain. This is possible thanks to the work of companies like Pinata, which has developed the infrastructure to support a wide range of NFT projects.
The Omaha-based startup, which was formed in 2018 and has been partnered with Greylock since 2021, began with the goal to provide a decentralized storage solution to make IPFS stable and reliable enough to store off-chain data at scale. Rather than thinking of NFTs as a permanent, collectible asset, Pinata co-founders Kyle Tut and Matt Ober believed their true functionality was as tools to store and exchange data that could be consumed. At the time, the company’s perspective on the utility of NFTs wasn’t common, and amid the crypto winter, initial traction was slow.
But seeing the potential for NFTs to serve as vehicles for creators to manage, share, and monetize dynamic content, Pinata persisted. Today, the company works with tens of thousands of users as well as leading marketplaces and platforms like OpenSea.
Tut joined me on Greymatter to discuss the company’s journey, how it works with customers today, and their vision for how NFTs can unlock a world of opportunities for creators across music, gaming, videos, and even websites. You can listen to the conversation at the link below or wherever you get your podcasts.
EPISODE TRANSCRIPT
Mike Duboe:
Hi, everyone. Today we are joined by Kyle Tut, CEO of Pinata, which is the home for NFT media. I’ll let Kyle explain what that is in the conversation.
We have been working with Pinata since the Seed and then the Series A. We’ve absolutely loved working with this team and are excited to get into some of the background of Pinata, broader thoughts around the NFT market and decentralized storage in general.
So Kyle, thanks for joining.
Kyle Tut:
Yeah, absolutely. Happy to be here.
MD:
Yeah. So a good place to start, Kyle, would be giving folks an overview of your background and what initially led you down the NFT rabbit hole.
KT:
Yeah, absolutely. So like many in the crypto space, I got into this because I had bought some Bitcoin back in the day and then ultimately ended up getting interested in Ethereum.
So in 2015, I bought Bitcoin, but I’m not really like a crypto finance trader guy. I’ve always wanted to build my own company. And so I was playing around with it, but I was really just in it to kind of figure out what the technology is. And so, Ethereum was really, really interesting to me with smart contracts in 2016. At the time, I was working at my first job out of college, which was at a motorsports startup where we were working with professional race teams around audio communications. So completely outside the realm of blockchain and crypto, but I was spending my nights and weekends learning about crypto and what it could do. And that led me to gaining enough confidence in April of 2017 to quit my job and jump into blockchain and crypto full-time.
At the time, I didn’t have a specific place I was going. I just knew I wanted to eventually build a company using this technology, and I was just going to go on a journey and figure out what that was going to be. And eventually, that ended up being Pinata.
MD:
Awesome. All right. So let’s get into Pinata. It started at ETHBerlin Hackathon. Tell us the backstory there and kind of what was the spark that actually led you down this path with Pinata.
KT:
Yeah, absolutely.
So as mentioned, I quit my job, and I’m actually based out of Omaha, Nebraska. And so, as you can imagine, there’s not a bunch of resources here for me to learn blockchain and crypto. So the first thing I ended up doing was jumping on a plane and flying to New York to compete at the Consensus Hackathon in 2017. And the reason I did that is I knew, as a non-technical founder, I needed to understand the technology at a much deeper level and have a really strong foundation with the technology. So I went to this hackathon, started meeting blockchain engineers, and obviously was sitting in rooms with them building. And I kept doing that all summer, just flying to different blockchain hackathons and kind of building out a network.
But I was still living in Omaha, so I wanted to find friends that I could hang out with here, so I ended up starting the blockchain meetup group in town that actually grew to like 500 people. The first person to reach out to me was actually my co-founder and CTO, Matt. He was a software engineer at a consulting company. And I was like, “Hey, you should come with me to these hackathons. This crypto thing is real. There’s a lot of excitement around it.” And the first hackathon we went to together was actually ETHWaterloo. And ETHWaterloo is where the CryptoKitties NFT application ended up launching.
So Matt and I have always had NFTs kind of in our story, and they’ve always been a big part of our journey. But up to that point, we were just going to hackathons. And we had started a consulting company where we’re building blockchain applications for various people, but hadn’t started Pinata yet.
But through that experience is how we were figuring out that storing data on-chain was exponentially expensive. So I think at the time in 2018, to store one gigabyte of data on Ethereum, it costs something like four and a half million dollars. And so what everybody was doing was using a protocol called IPFS (or the InterPlanetary File System) to actually store and manage their data off-chain. The problem back then was it wasn’t very fast, and it wasn’t very stable. And so Matt and I had the simple idea of let’s just make IPFS as fast and stable as possible.
And so we came up with that idea, ended up launching the idea and Pinata ultimately at the ETHBerlin Hackathon in the fall of 2018. We ended up winning that hackathon, and then we thought we were going to take over the world, raise a bunch of money, and everybody was going to use us.
Unfortunately, there were two factors going on where that wasn’t true. And we really ended up struggling for close to two years, because, number one, NFTs weren’t a big thing yet. The NFT community back in 2018 was all of six people at the time. And the other thing was it was a crypto winter, so we were struggling with people moving out of the space. There wasn’t a lot of hype and so we just weren’t able to get a bunch of users. And we effectively had to just keep going, keep calling people, keep trying to find use cases for us until, in 2020, we started to see the NFT market start to take off, and then our success followed.
MD:
Yeah. I think when we and Nate and Offline Ventures found you, it was March of 2021, when some of these NFT projects were happening.
KT:
February 28th. I remember.
MD:
Credit to Nate on that one. But we were starting to see these NFT projects and marketplaces start to pop, and so we scoured through docs to look at what infrastructure was being used, and Pinata kept coming up. It felt like there was almost some ubiquity on NFT projects at the time [specifically] of Pinata within NFT projects at the time.
But as you mentioned, you had braved through basically a few years of there being really not a whole lot of usage. I’m curious in your mind and in the broader team, what gave you that conviction over that time? Because it feels like a pretty challenging space to keep building within, with adoption so limited.
KT:
Yeah. So our conviction was around the idea that we knew storing data on-chain at scale was just never going to be something that was going to work. Blockchains are not good at storing data at scale. And so, we just really needed some use-case in the blockchain space to happen where they needed to store more data off-chain, and that obviously ended up being NFTs. But 2018, 2019, it was mostly DeFi applications, ERC20 tokens that aren’t storing a bunch of data off-chain. And so we really just needed the market to come to us.
I always talk about it as if we were right. But when you’re right, and you’re early, it’s the same thing as being wrong. And we were wrong for close to two years. But if we weren’t there early, if we weren’t going to those hackathons…So 2018, 2019, 2020, we kept going to hackathons. We kept building our brand in the dev community by going to those hackathons. And then I spent every day just calling as many projects as I possibly could, talking to them about why would they use Pinata. Why would they use IPFS or not, and what projects were they working on? And then, ultimately, through all of that, we were also blogging, and our technical blog was teaching people how to build in this space, how to build NFTs. And that’s ultimately where we started to see traction.
So we were very committed to IPFS. I think a lot of people questioned that back then, but it turned out well for us. And it was kind of in the early days, we would see one person using us every day, and then a week later, it would turn into two and then four, and it would go on from there. And that kept us active and kept chasing what we were going after.