Dan Barry (00:03.842)
The star of this Trailblazers episode is Justin Hochberg, the founder and CEO of the Virtual Brand Group, an award-winning company that strategically accelerates consumer brands by innovatively leveraging metaverse Web3 technologies across gaming, marketing, advertising, communities, and fashion. Some of VBG’s success stories include, first, AI Fashion Line.

for Mattel, first brand to ever deploy AI on Roblox, the number one retailer by sales on Roblox, the first virtual product to become physical merchandise, the first celebrity IRL fashion duplicated virtually, first award winner best digital product by licensing international for Web3 activation, first Web3 project to ever win licensing Executive International’s most innovative deal.

And this is just a condensed list. Obviously, an extremely impressive resume. With all of this going on, I am honored you found the time to join us today, Justin.

Justin Hochberg (01:15.629)
Dan, thank you for being there. And I have to say, it’s kind of embarrassing listening to that list. So whoever gave that to you, I need to have a chat, because that is a little too much for even me to take. And that is saying a lot.

Dan Barry (01:24.769)
Ha ha!

Dan Barry (01:34.314)
And I had to condense it. It was like, it was like this. It was like, okay, I should at least get the highlights. Right. So, so anyway, um, I know you’re busy. So, so let’s dive right in. So, so obviously I, I gave a brief, you know, intro, uh, into a VBG, but from your words, what is VBG virtual brand group and what is it’s

Justin Hochberg (01:41.178)
Yes.

Justin Hochberg (01:46.626)
Peace.

Dan Barry (02:00.374)
positioning in the overall metaverse space.

Justin Hochberg (02:04.965)
That’s a great intro question, Dan. I think there’s two threads I’d like to weave together so that anybody, regardless of whether you’re an expert in the industry or you’re just curious, can take away. First of all, on a very practical basis,

Justin Hochberg (02:25.661)
Every time there’s a technology shift, brands tend to be somewhat slow to adopt to it for a variety of very simple reasons. A lot of it’s inertia, budget, complexity, unsure whether that the new thing is worth investing, valuable resources. Totally get that. We act as a bridge between brands of all sorts, consumer packaged goods, sports, entertainment, fashion, music, et cetera.

this new marketing, sales and consumer channel. You call it the metaverse, you can call it Web3, it’s irrelevant. There’s something new, there’s brands, this is really valuable for them. We’re experts over here, you’re experts over here, we wanna bring them together. Or as they used to say when I was a child on the ad for Reese’s Peanut Buttered Cup, there’s the chocolate, there’s the peanut butter, let’s get them together and make a Reese’s. That’s what we do.

Dan Barry (03:20.118)
Haha

Justin Hochberg (03:25.341)
Right? We are world-class experts at understanding the mechanisms, the distribution, the products, the platforms of Web3, Metaverse, games like Roblox, Fortnite, loyalty rewards, et cetera. And we advise and execute with brands. That’s the practical of what we do. The higher order thought here, or our thesis is…

If you think about any brand, the first rule, I think, is that you need to be wherever your consumer is. If you don’t, your competitor will be. That’s not specific to the metaverse. That’s specific to every single time that you want to interact with the consumer. There are many instances where brands didn’t do that. That’s why we have Netflix and Blockbuster is a faded member.

Right? So if you start with that premise as a CMO or CEO or any C-suite leader, you may or may not understand what the metaphors is, just like you may or may not have understood 10 years ago what social media is or 25 years ago what the internet is. But you do know that even if you don’t get it, there’s so many people now using this. I think we’re up to about 600 million people per month.

Dan Barry (04:24.591)
Yep, yep.

Justin Hochberg (04:51.897)
buying goods in the metaverse, that you don’t have to get it, you just have to know that your consumers get it. Okay, so that’s part one. The second part led us to the following thesis, which was for the last 15 years, a lot of people have talked about consumers being digital natives. People who are used to only swiping with their finger.

And when they go to a, say a museum and see a screen and it doesn’t do that, they come back and say, why is it broken? Right? They’re used to purchasing more on Amazon than they are on walking into a store, right? These are digital natives, many books have been written about. We see right now a transition from digital natives who are used to legacy social media platforms, Facebook, Snapchat.

Dan Barry (05:26.158)
Exactly.

Justin Hochberg (05:46.869)
Instagram, TikTok to what we call at the virtual brand group, spatial natives. These are people growing up in the world of Roblox, Fortnite, user generated content that you can customize, buy, trade and sell and live in a three dimensional world where you don’t play games, but you socialize, you make friends, you create a community. And that is the world that now exists.

which has massive behavioral implications for how you market and create products. And so that’s the thesis we put in front of all of our partners is there’s a new behavior pattern, it’s three dimensional and you need to adapt.

Dan Barry (06:32.042)
No, very, very well put. And I love your Netflix blockbuster example. I use that all the time. It’s like one company got it and the other one just didn’t, right? So with, and I had made a pretty big list before we started our interview. So with the many activations that you and Virtual Brand Group have already been involved in, is there a specific campaign

that has had, let’s say, a larger than life impact and why.

Justin Hochberg (07:08.449)
Yeah, that’s a great question because I think what tends to be with any new technology is it’s unclear besides wanting to do it, what it gets you. What is the ROI? And I think now more than ever, we’re not in the most robust of times. Everybody wants to stretch dollars further. So let me give you two specific examples that have had oversized impact on a brand in an

incredibly short period of time. Is that okay? Okay.

Dan Barry (07:41.458)
Oh yeah, give it to me. I’m all ears.

Justin Hochberg (07:44.645)
Okay, so one of the areas that we specialize in are things that drive pop culture. And pop culture has traditionally been driven by entertainment and fashion. And entertainment could include film, TV, music, gaming, et cetera, and then fashion is fashion, right? Those are sort of what is at the tip of that spear. So the first one I wanna talk about is fashion and retail.

Forever 21 has been a partner for us. In fact, it was our first ever partner and we’re coming up on two years working together, which has been miraculous. So here’s the case study that I think speaks volumes to what you can achieve at a super high ROI. When we first engaged with Forever 21, it had no virtual presence and no virtual strategy. We became the exclusive purveyor of that strategy and go-to market execution.

We developed a roadmap and over that course of time, we started relatively simply. It seems obvious now, but we were the third brand ever to be on Roblox. Now today there’s 250 brands on Roblox and it seems like it’s becoming more and more mainstream. At the time, two and a half years ago, people were like, I don’t get it. I don’t know why I would do it. So like everything, it seems obvious in retrospect.

Dan Barry (08:56.343)
Wow.

Dan Barry (09:07.532)
Mm.

Right, right.

Justin Hochberg (09:10.945)
We launched on Roblox, we built a virtual fashion collection, we launched a game, we launched a variety of different marketing executions like integrating Roblox merchandise with their e-commerce site so that you could buy both items simultaneously. And the list goes on and on. At the end of 12 months, i.e. last December, this is the result of all of that hard work by Roblox and their CMO, Jacob Hawkins, who is amazing.

and the team Winnie Park, who’s the CEO.

Justin Hochberg (09:45.741)
A list came out ranking the top metaverse brands for the following year. On it were, not surprisingly, Balenciaga, Prada, Gucci, Polo, also brands like Nike and Adidas who have leaned heavily into this space. The other one was Forever 21.

Now, I pause here for a second. Everybody likes to be on a list, but as they say, it’s the company you keep.

I would venture to say that no matter how much money you and I had, it would be very challenging to position Forever 21 in the physical retail world, either as a ultra luxury brand like Prada, Gucci, Balenciaga, or on the mass marketing high performance end like Nike and Adidas in the physical world. Yet, in a brand new market…

Dan Barry (10:42.986)
Right.

Justin Hochberg (10:48.225)
we were able to use its challenger brand status, be very clever with our marketing, our earned media, our activations, and put them in that same conversation. So if you’re looking at a brand story, you’re talking about a massive impact on that brand, both on a B2B and B2C perception. So that’s case study number one that I think speaks to what the potential is and the speed to impact.

we can have partnering with a brand.

Dan Barry (11:21.922)
That’s incredible. That’s incredible. Did you say you had two or? But that’s okay. But that’s, but, but that’s

Justin Hochberg (11:25.893)
I did. But I wanna create the space in case you have any questions on that so that you can jump in and offer your insights.

Dan Barry (11:34.742)
No, no, no. I guess my thinking is I’d love to get the case study on this and just dive in. So I think after the conversation, I may chat with you about it. But it’s awesome in terms of like, you know, so many brands, I think they get into these and they don’t think they can get an ROI positive campaign. So the fact that you were able to achieve that, incredible. Kudos to you for that.

Justin Hochberg (12:04.037)
Thank you. So the other one is really exciting as well. So obviously one of the biggest pop culture moments of 2023 was Barbie. And Barbie was multifaceted, whether it was beyond the movie, right? There was music, there was the movie, there was retail, there was games, et cetera.

Dan Barry (12:15.863)
Hmm.

Justin Hochberg (12:32.509)
a line of virtual merchandise for Barbie that we exclusively launched on Roblox. This program was very effective because of the following. First of all,

Dan Barry (12:41.13)
Mm.

Justin Hochberg (12:50.141)
We created the first ever Barbie AI designed line, physical or virtual, using AI. Cut down, I’ll go for what we did and then I’ll give you the results. Second, we created, that ended up being the first ever AI designed collection ever offered on Roblox. Third, the key to marketing and distribution is

as wide as possible. The world is a very crowded place, whether it’s many stores in a mall or many games in Roblox. Knowing that, we developed a retail distribution network of a pop-up store that is this beautiful Barbie multi-dimensional store where you could enter, try on clothing, interact, et cetera. That was like a mini game. We distributed that across the entire Roblox ecosystem.

to hundreds and hundreds of games. And that had not been done before in that way.

Dan Barry (13:55.382)
That’s really cool. I love that.

Justin Hochberg (13:57.589)
Now, what did that yield? Three really key things. First of all, fashion has a very challenging past about how sustainable it is. It’s not exactly the most sustainable. So we were able to create a virtual line of clothing that was 99% more sustainable than a physical line of clothing, right? We were able to use AI to reduce the…

production and creation of the fashion line by 94% and the cost by 98%. Okay? Next, we were able to distribute this line of clothing as both a sales opportunity and a marketing opportunities throughout the network. And the result was we engaged over 315 million people in eight weeks. Now,

Dan Barry (14:31.168)
Oh.

Dan Barry (14:34.638)
I’m gonna go check.

Justin Hochberg (14:55.833)
Just so you think I’m not fudging the numbers here, when I say engage, I don’t mean some vague, like they kind of looked at it. I mean, people came up to this experience, which we can show a picture of in your article. They went there, we tracked it with data that I have proprietary, they engaged with the product, they tried it on, they walked around with it, and they spent on average over four minutes

up to 17 minutes per engagement. Okay? For context, the average TikTok video is viewed for less than three seconds. The average click-through rate on Facebook is less than 1%. The net result is, one, we saved a lot of money and time, two, we positioned a retail story to an innovation story, and

Dan Barry (15:29.432)
Wow.

Justin Hochberg (15:52.361)
we appeared in press that was beyond just entertainment weekly and fashion things. But Forbes wrote about us in a business story. They talked about Charlie Fink, who’s a leading thinker there, wrote about the week in innovation. So we moved this to an innovation story as well as a fashion story. And last but not least, and this is the million dollar question is, where’s the money?

This program was three times more effective than your average TikTok campaign, a three X return on ROI.

Dan Barry (16:33.266)
Wow, wow, that’s huge. And TikTok is offering some of the best ROIs versus like any other platforms right now. That’s huge. Do you do you

Justin Hochberg (16:41.421)
Yes. And I just want to say that although I talked about it being Barbie, it’s not because this was Barbie, it’s because we pulled the right levers.

Dan Barry (16:53.994)
Makes sense. Do you do you have some actual video footage of the experience that you were just talking about? Yeah.

Justin Hochberg (17:01.145)
Absolutely happy to put that in your article and post that wherever you’d like. It’s it’s super exciting now

Dan Barry (17:06.616)
No, no, it’s like, I, because I think the visual is what people would love to actually see on that. So very cool.

Justin Hochberg (17:11.993)
For sure, for sure.

Dan Barry (17:15.302)
Okay. So as much, you know, I, some of this stuff I know, some of this stuff I don’t know, I try to keep up as much as I can with everything you’re doing, but I think it would be a full-time job to be honest with you, but so are there any initiatives your company is working on right now that you think that you feel could be a game changer within the space?

Justin Hochberg (17:45.733)
That’s a great idea and I’d be silly not to say absolutely and let me tell you about it, right Daniel?

Dan Barry (17:52.978)
All right, this is what I’m hoping. Give us the alpha.

Justin Hochberg (17:57.305)
Right. So look, one of the things that we believe in is that like with the Forever 21 example where we sort of took a physical brand and made it virtual, we also believe that there’s an opportunity to take a brand that’s known for X and reposition it to be known for A, B, and C. So one of the things that we do is work with the voice TV show, which most people know from its success.

over the last 15 years on NBC with rock stars like Gwen Stefani or John Legend or Blake Shelton or Kelly Clarkson or Niall Horan who’s on this season’s. And so we have created a strategic roadmap where we are doing three things with the voice. One is we are taking the voice, which is typically done country by country. There’s a US voice, there’s a French voice, there’s a German voice, but never do they communicate. The fans on each one are completely different.

So we have been building out over the last year, multiple virtual games and worlds where fans can aggregate across borders and without language barriers. And we have this year in one year built across three different platforms with a fourth about to come online. And by the time this airs, we will have launched on Roblox for the first time.

Dan Barry (18:55.65)
Yeah.

Justin Hochberg (19:26.193)
the first reality TV show ever to be on Roblox with a unique virtual fashion collection themed to the rock stars that are the coaches on the show. So Gwen Stefani, Blake, I’m sorry, not Blake, Gwen Stefani, Nile Horan, John Legend and Kelly Clarkson will each have their own virtual fashion line there on the platform as well as other really cool unexpected

virtual lines. And so we’re moving them into multiple platforms and we are repositioning them as a virtual fashion brand. So I know that you think the voice is music, but if you think about it, music and fashion have always gone hand in hand. The Grammys are coming up not long after this podcast is going to air. And if you look at what people are wearing to the Grammys,

Or if you look at who goes to the Met Gala, all the musicians, music and fashion are intertwined. And so for us, when we looked at the brand of The Voice, we thought, well, why isn’t The Voice a fashion line? And our fashion line that we’ve put out in the market is both a couture fashion line that you might wear the Grammys, but it’s also street wear and accessories so that it’s a fully robust line. And we are not looking at this as a promotional vehicle.

We believe that this will be a multimillion dollar brand as its own business. So that’s super exciting.

Dan Barry (21:03.23)
Wow. That’s turning the tables upside down, isn’t it? I think maybe Blank Shelton will want to come back to be part of this. But no, that’s awesome. Looking forward to hearing more and more about that. I have to, I cannot ever do any of these interviews without asking a question about AI. I’ve been in the AI space for a while, so.

really keen and you’ve already mentioned it for, I think you had indicated that you were the first one to actually on Roblox do an activation with AI. But how do you feel it playing out in 2024?

Justin Hochberg (21:51.621)
It’s a great question. Do you, how do you want me to take that? Are we talking about Roblox? Are we talking about virtual worlds? Do you, what lane do you want to be in?

Dan Barry (22:01.232)
I think just generally virtual worlds, kind of like the space itself and how you feel. I mean, obviously, Roblox is part of it, but more higher level.

Justin Hochberg (22:13.805)
Well, look, I’ve always said that I at this stage of AI’s development, and I think this stage will be different when we speak next year because you’re one of my favorite podcasters and I want to make sure that we speak often. This year, the way I and my team perceive AI is much, it’s a tool. Much like we all use Photoshop or something like that, or programming language like…

Dan Barry (22:27.394)
Yeah.

Justin Hochberg (22:42.585)
Python or Blender or whatever you tend to use. It is something that is a tool that humans use. And so the most powerful use of AI right now is driven by H.I. Human intelligence, right? AI on its own is not useful. It requires prompts, it requires refinement, it requires expertise to know the nuances of it. And so…

I think what you’ll start, so that’s something that we’re already seeing, and I think that’ll continue for some time until it makes that next logical leap when it gets to a large language model that might be GPT-5 or more. I don’t know where that’s going to be, but I think that’s where we’re going. I also think, practically speaking, having spoken to the leadership at Roblox and Fortnite and various other platforms, their goal, and I applaud them for this.

is to enable as many people to use the platform with the lowest barrier as possible. So if you think about YouTube or Facebook, part of their brilliance is that all you need is a phone and upload it to YouTube and you’re in business. Now that could be me and that could be Mr. Beast, but we’re both doing it with almost no barriers to entry.

If you think about Facebook, you just open an account and you start posting stuff. Now those are relatively simple transactions. When you start thinking about virtual worlds and all that stuff, you’re talking three dimension, you’re talking code. So what’s going to happen and is already happening is that Roblox is rolling out text to code development. So you can just speak or write, build me a castle with a flaming flag and it will appear. So,

Dan Barry (24:09.623)
Yep.

Dan Barry (24:38.241)
Yep, yep.

Justin Hochberg (24:39.477)
that reduces the barrier so that everybody can participate in the community. So you’ll see a lot of that happening amongst many other things. I mean, the data analytics and the marketing and all that stuff, but from a platform consumer’s perspective, I think you’re going to start even seeing it easier and easier for people to engage in more and more complex ways of building and making things.

Dan Barry (25:04.922)
Yeah, yeah, I totally agree. Basically AI just makes the whole process much easier for everybody. So okay.

Justin Hochberg (25:11.841)
Yeah. Now, can I ask, can I share one more thing?

Dan Barry (25:16.386)
Sure, sure, go ahead.

Justin Hochberg (25:18.225)
One of the things that we strongly believe in is that the world of three dimensional spatial natives and virtual experiences and the web three and the metaverse, we do it a disservice if we only talk about it as a silo of activity. When the internet was invented, it was this thing over there. Today, it’s baked into all of everything we do. This,

Zoom or podcast is a perfect example. Not once have we ever mentioned that we’re using the internet. Yet it is the backbone and technology that fuels this entire experience that you and I are enjoying right now. So as technology matures, it becomes ubiquitously weaved throughout an organization’s activities. To that extent, what you will see next year that we did already,

Dan Barry (25:55.81)
All right.

Justin Hochberg (26:17.117)
is the merging of the virtual and physical businesses so that if you’re in Roblox, you can purchase an item that exists in the real world or vice versa, that these two worlds are going to merge. Now, I know that already exists because at Roblox’s investor day, Christina Wooten, the head of global partnerships, stood up and talked about how they were going to empower that capability. And…

Dan Barry (26:30.254)
All right.

Justin Hochberg (26:47.149)
You know what they talked about as the first ever example of that?

Dan Barry (26:52.694)
I don’t know, virtual. I’m guessing it’s one of your projects.

Justin Hochberg (26:57.641)
It’s even on the list that you read out so generously at the beginning of this show. So we created an item in Roblox, a black beanie that said forever. We then monitored it, tweaked it, and then built it and sold it as a real item that was sold nationally in stores. It is the only example that has ever existed so far.

Dan Barry (27:10.338)
Forever 21, okay?

Justin Hochberg (27:26.329)
but it demonstrates how to do very sophisticated, cost-effective, sustainable R&D for products that then can become real-world things. That is a major trend that you will start to see next year that we’re already working on five or six projects related to it. And I’m very excited about it.

Dan Barry (27:49.386)
No, that’s very cool. That’s very cool. And brands, I think more and more brands need to be jumping on this bandwagon. And this then leads to my next and final question out of the five. So I’m a firm believer and I can tell just by how you’re answering that as well, that the sooner that brands begin their metaverse journey, again, metaverse however you want to, you know, title it or whatever.

the sooner they can get an edge on their competitors who may be slower to adapt. And that’s always been the case. So what is your perspective? How can brands best like start to use these new platform technologies now?

Justin Hochberg (28:36.485)
Well, I think for me, I’ve been in various different industries often early on, whether it’s been my time at Microsoft or even back in the day in Eastern Europe when the wall came down. What I always say to teams that I work with and build is the key is to find the easiest first yes.

Dan Barry (28:50.329)
Mm.

Justin Hochberg (29:05.337)
they’re already operating, as opposed to something they’re not. So here’s a pitch that I would offer any brand to think about. Close your eyes, Daniel, I want you to play along. Close your eyes and listen to the following information. And then I’m gonna ask you a question, a simple question. If I told you there was a marketing and sales channel which

has 600 million consumers that are your core demo, heavily indexed to a very elusive youth demo, would that be a market you’d wanna go after? Yes or no?

Dan Barry (29:52.883)
Hell yes!

Justin Hochberg (29:53.997)
Okay, now close your eyes again.

Given how competitive the landscape is, regardless of the product, I think there’s only one metric that matters. It’s not money, it’s not average revenue per user. It’s only one thing because it’s the one common denominator and that’s time. We all have just 24 hours. So we’re all as brands competing for time.

If I told you I know a place where people spend more time than TikTok, Facebook, and Instagram combined on average per month, would that be a market you want to be in? Yes or no.

Dan Barry (30:39.062)
Same answer, hell yes.

Justin Hochberg (30:40.697)
Hell yeah. And if I told you, you could get there using a portion of your current legacy social media, Snapchat, Facebook, just a portion that would deliver three times the ROI, would you be willing to try a program?

Dan Barry (30:59.68)
I’d be an idiot not to, right?

Justin Hochberg (31:02.677)
Okay, now that’s the pitch. What am I talking about? I’m talking about marketing, what we did for Barbie, what we did for Forever 21, what we’re doing for The Voice, that just happens to be in the metaverse. Whether it’s in the metaverse or not isn’t important. For you as a brand marketer, stewarding brands and dollars, those things are probably the most important thing to know.

Dan Barry (31:28.482)
No, very, very well put, very well put. I try to do that myself often. So I like the way that you just handled that. So Justin, thank you so much for sharing your insight. This has been incredible. I could, to be honest with you, I could go on for hours. You’re just like so full of like exciting information. So again, we’ll definitely be doing this again, 100%. So.

If a brand is listening in and they close their eyes and they responded, you know, affirmatively, as I did, how can they contact you or VBG, uh, to discuss possible collaboration?

Justin Hochberg (32:11.289)
That’s a fantastic question and thank you for that. There’s three easy ways. The first one is just hit me on LinkedIn, Justin Hochberg. Happy to respond there. The second is virtualbrandgroup.com. That’s our website. And third, because I know you have a super high quality of people who listen to this, I will give out my personal office email, which is justinatvirtualbrandgroup.com.

Dan Barry (32:37.45)
All right, cool, cool. So again, thank you so much, Justin.

Justin Hochberg (32:42.009)
Dan, it’s an absolute pleasure. This has been great. Thank you for showcasing the work that our partners are doing. We feel like they all deserve most of the credit and we’re just happy to be along to support them.

Dan Barry (32:54.378)
All right, we’ll be talking again soon. Take care.

Justin Hochberg (32:56.953)
Take care, Dan.