PTW3 046: Mendoza Ventures: Investing in AI, Cybersecurity, and Fintech for Success with Adrian Mendoza and Donna Mitchell

Thanks for checking in the pivoting to web three podcast. Go to pivoting to web3 podcast.com to download and listen or web3 game plan to check out the videos. Thank you. Morning. Good afternoon, good evening. Welcome, welcome, welcome. Welcome to pivoting to Web three. And today we have Adrian Mendoza.

Donna Mitchell

00:00:17 - 00:00:45

And Adrian Mendoza is the general partner at Mendoza Ventures, which is both Latinx and women owned at the first Latinx founded venture capital fund on the east coast. And he's in Boston and 20 years experience. Now. I'm not going to go too far because he does too much on the fintech side. He's in AI. He knows about cyber security. He knows about bootstrapping. He knows about capital, capital ventures.

Donna Mitchell

00:00:45 - 00:01:16

He knows so much and he's been around so long. I'm just excited to have someone that is esteemed as Mendoza at Mendoza Ventures. So I'm going to turn it over to you, and you can give us some insight on how you ended up in Boston, Boston, Massachusetts, and being so successful, because you are a star. And I just want to let everybody know about you and glad that you had time to be on my podcast. So, Mendoza, say hello to your audience and ours.

Adrian Mendoza

00:01:17 - 00:01:50

Hey, everybody. Donna, thank you so much. I'm so glad that we matched up in terms of being a guesthouse. I love what you're doing in your podcast. I love you sort of doing the education about what's going on in sort of the web three world. And I'll kind of start a little bit about my background is before I was in venture capital, before I was an investor, I was a founder. And I started our first company in 2010. Really, really early on, right after the great financial crisis, and we ended up raising venture capital money.

Adrian Mendoza

00:01:50 - 00:02:49

We were focused on testing mobile websites, and we had customers. It became an AV tech, but in the middle of it, like every founder, we had to find a way of paying the bills. And so this is what you'll hear of the word called Bootstrap. It's finding ways while we're building the company and the product. And one of the first projects I did for this company is we built the first mobile app that was approved by the regulators. And it was for a really well known insurance company. And it was a really cool idea where I, there was an insurance company that was selling retirement plans and said, hey, we'd love to find a way of interacting with the real world. So what we ended up doing is designing a mobile app where you would walk around and it was saying, hey, why don't I give you a price scanner, and you walk around stores and scan every product you want, and we'll tell you where the best cost savings are.

Adrian Mendoza

00:02:49 - 00:03:37

And by the way, if you do find some cost savings, you know, you were going to pay $500 for that tv. What if I find it to you for 450? Why don't you take that $50 and put it into your retirement account? And it was really an amazing, because it was kind of very much that first inkling of what web three can do is this interaction between technology and everyday individuals. And we really thought hard about how would we interact with the basic consumer to be able to do more education. Roll the clock. Mid 2015, the company became an ad tech. So we were now targeting ads towards people with iPhones and Android users. And in 2016, my wife and I started Mendoza Ventures. We had raised VC money.

Adrian Mendoza

00:03:37 - 00:04:02

We were founders. We knew all the service providers, we knew all the investors. And we said, let's take a crack at actually investing in companies. And the first fund was just us. And we invested in three companies, one. And we were like, literally said, hey, what are the best spaces that we know? Well, we built AI. We've built cybersecurity. We were building these financial technologies for the banks.

Adrian Mendoza

00:04:02 - 00:04:18

Let's do one of each. So the first investment was an AI company. The second one was a cybersecurity company, and the third one was a fintech. Lo and behold, the first cyber security, the cybersecurity company. We sold it in five months and returned ten x back to us.

Donna Mitchell

00:04:18 - 00:04:18

Wow.

Adrian Mendoza

00:04:18 - 00:04:43

And we were like, wow, there's something incredible here. And it was two latino founders out of Boston. They started, they came out of South Texas. They sold their company. We actually ran off with their mascot, which is this little plush dog that's here. He now worked for us. And the first AI company just sold earlier this year. And so weve got one fintech left, and it happens to be a blockchain company.

Adrian Mendoza

00:04:44 - 00:05:51

And so we are early investors in blockchain. This is circa 2017, 2018, and were now finally getting to the point where were going to see revenue come through it. But we really saw that investing was, there was some short term benefits, but there was also in these spaces, this really, really long term, like, outlook on life, but it also in that web three space. I mean, web three wasn't really a term until like the last three to four years when we were trying to figure out, how do you take all these different pieces and put them under a bigger umbrella? And it happens to be now sort of, you know, AI is into it, and e commerce is into it, and, you know, blockchain is into it, fintech is into it. And it's been really kind of an interesting ride to see all of this develop in the last eight years. So we, Mendoza Ventures has been around for eight years. We're on our third fund now, and we literally allow individuals to invest as well as we have. We're anchored by bank of America, truest, and Grasshopper bank.

Adrian Mendoza

00:05:51 - 00:05:54

Some of the largest banks in the country are investors with us.

Donna Mitchell

00:05:54 - 00:06:38

Well, that's exciting. And you've had a very exciting journey in the fintech and just making money space, entrepreneurial space. The capital ventures, you just. You and your wife have done really, really well. So, with that said, you're now in the space of fintech. You've got these great banks. But there seems to be a lot of confusion with consumers or the public and early adoption on exactly what are some of the benefits that changes or impact society that we really should be aware of. Instead of being fearful and confused, can you help us understand some of the benefits and why it's taking off and why it was so successful?

Adrian Mendoza

00:06:38 - 00:07:34

Yeah, I mean, I'll use a good term like the blockchain. The issue there is, when it first came out, everybody was talking about it, but no one really understood that it was really infrastructure. It was like talking about a road. You're like, man, how that road paving is fantastic. That's really what it is. It's infrastructure. And I remember early on, like, people had always asked me, like, hey, did you ever buy any cryptocurrencies? Did you ever buy any blockchain or ethereum? And I remember having early conversations, like, you know, when we. I was a founder pre 2015, before everybody knew about it, and someone would come up to me and were like, hey, man, you want to buy some bitcoin? And I would be like, what, are we buying drugs here or what? He goes, yeah, there's a guy in a van who, if you give him $1,000, he'll give you bitcoin on this little card.

Adrian Mendoza

00:07:34 - 00:08:29

And I was like, yeah, this sounds really sketchy. And then sort of in mid 2016, this is a good Boston one, there ended up becoming, like, bitcoin atm machines. Like, there was one in south station, in the big train station in Boston. But it was like, people were just, like, averse to it, even to the point that I was on a panel, and someone was like, oh, I just bought some blockchain. And I was like, I think you mean bitcoin. And so there was always this confusion. And this actually happens a lot in the admin of new technologies, where people are so excited about a technology that it all of a sudden comes up into the lexicon of what everybody's talking about, but they don't know what to do with it. And so early on, like, 2015, 2016, there was kind of this boom and bust cycle of everybody was talking about it.

Adrian Mendoza

00:08:29 - 00:09:38

Next thing you know, I'm being approached by, like, the country of Jamaica, who's going to do a blockchain network? And I was like, wait, what other countries? And rights management for images and music, and nothing ever really stuck. And it's hard because when you're offering new technology, like, let's say, like a database, like no one's going to buy something because of the database you use. It's just the road you drive on. It's the technology, the underpinnings on it. And there was so much value there. I always described blockchain is, imagine if I gave you a dollar and you knew exactly where the dollar went and where you gave that dollar to and what it was used to buy, down to the point of where it was destroyed, to the point of when it was printed, and you had this ledger of everything. And so for the last, really, five or six years, we've been really looking for these beautiful use cases. I remember in between starting my company, starting Mendoza Ventures, and finishing my company, I was the entrepreneur residence at John Hancock's innovation lab, and we built an early prototype of blockchain.

Adrian Mendoza

00:09:38 - 00:10:50

And everyone would look at us and say, well, why aren't you just using a database? And I was like, no, that's not the point. Like, you don't have to use paper anymore. Like, I can track when a customer signed in until when we gave them a product and how much money has been transacted. And so we're really to the point where cryptocurrency has really gotten that in front of people. But I think we're going to see, and this is really the power of what web three, one of the components that we are massive believers in Web three is what's called Defi, decentralized finance. So one of the, you know, a couple of years ago, I was quoted as saying that the power of web three and decentralized finance is that traditional players, the Mastercards, the visas, the card players, would get disrupted, because you now have the ability to move money around from one place with the other without having to deal with FX rates, the cost of international capital. And so you saw early on, people like JP Morgan built their own coin, the JPM coin, to move money from one office to the other, to not have to pay international fees. So you have this fantastic use case that's out there.

Adrian Mendoza

00:10:50 - 00:11:42

And in that quote, funny enough, one of the traditional players, which is a company called Synapse, actually ended up taking my quote and using it in their marketing. And I was like, hey, man, I didn't allow you to have it. That's, you're the point, you're the traditional player. And what they were doing is they were building a general ledger that allowed fintechs and companies to move money around. Well, it just so happened a couple months ago, they went out of business. And so there is this massive opportunity for startups and founders to start looking at how do they buy into that, using some of these web three technologies, decentralized finance, AI, to help move money around for me. I remember I was telling this story just yesterday. I was telling someone about 2000.

Adrian Mendoza

00:11:43 - 00:12:21

In 2000 I was at IBM's innovation lab, and they were working on a project for the state. And it was about something ridiculous. It was like 200 pages. They were all hard coded, there was no database, there was one engineer, and then someone was like, oh, you forgot ten things. And he goes, oh, there he goes back. He has to change all 200 pages. So when you get these advent of these technologies that are the underpinnings, they make things easier. And so I think what's going to happen as we go more and more farther out into sort of these old technologies are being disrupted.

Adrian Mendoza

00:12:21 - 00:13:28

The ability to create ideas and companies with the building blocks, these building blocks of life, of building companies are going to be out there already. So, which is what I love is because you have the ability with Defi to move money, move currencies. Now we've seen remittances happening between us and Mexico. Now we see, you know, I remember us having a conversation six years ago of how would I become a bank? Well, I need a banking license. And then after lunch we were like, well, what if we had puppy coin and puppy coin, I exchanged it money for puppycoin, and now I could lend puppy coin and someone could sell it on the other side. Could I inherently be a bank that is decentralized finance at its finest? And so what I love is that it's not just about these cool technologies. The power of what web three is happening is how do I use them to build websites? We're at the infancy of like, what, 1998 was 19, you know, 2000, where we're starting to be able to now build our own websites. We're starting to now create our own stores.

Adrian Mendoza

00:13:28 - 00:13:35

And, you know, in the next one to two years, we should be able to build our own fintechs by using these web three technologies.

Donna Mitchell

00:13:35 - 00:14:18

Wow, that is exciting. So let me ask you this. On that same plane, there are underprivileged populations and locations and places and spaces where this could really be a benefit in the ecosystem. And then they could start a bank and they can really, how would that impact something on a smaller scale? That question has come up. So that can paint a picture beyond the big guy that is centralized now, getting uncentralized, how does it impact a smaller player in society or those that are under privileged?

Adrian Mendoza

00:14:18 - 00:15:28

Well, the great thing is, the reason I know this, really, I'll get to the answer is we invest a lot in fintech that focuses on underrepresented communities. How do we leverage some of these web3 technologies to help communities that are underbanked that are also because we're, you know, for most of us on this call, we're the overbanked. Every day, we go to the mailbox, and there's three ads from three banks, and we go to our email, and there's Chase and Bank of America, and everyone's trying to win our bank accounts, but you get a portion of the community. I'll use African American and Latino immigrants who are not being touched because they don't have a credit rating. They're credit invisible. And we're investors in a company called Listo, that's a marketplace to offer them lending insurance products. We're now talking to a few other individuals and new companies that are starting to use decentralized finance across remittances. How do I send money from us to Mexico? But if you think about it right now, what happens? You have payday loans, you have all of these loan providers, remittances, that are using.

Adrian Mendoza

00:15:28 - 00:17:05

The cost of capital is really expensive, so we're charging them 24, 30% to send money back home. The money that goes back home goes to pay bills, it goes to pay medical bills, it goes to pay rent in their home country. And what if you remove that cost of capital to the point that it's zero? If JP Morgan can do it, why not be able to use small startups to lend money from one place to the other, not just remittances? But what if you're able to lend dollars between one person and the other, using decentralized finance, using blockchain, using tokenization of not really using cryptocurrencies, but like puppy coin. That allows me to lend without the massive amounts of fees, which are predatory right now. And so I think we're just starting to open that Pandora's box of right now, the big guys are using it, but we're starting to see sort of in the middle, and it's going to start trickling down to a founder can start a company and say, hey, how do I let undocumented workers send money home? Undocumented workers lend to a friend without so much of the cost of capital. That's really a big issue right now. As interest rates go up higher, the cost of lending money gets more and more expensive. And funny enough, the cost of lending a lot of money, 200, 300 million, is less than the cost of lending ten, 2100, $200, which is, you think it would be the inverse, but it's bigger in volume.

Donna Mitchell

00:17:06 - 00:17:10

Wow, that's really interesting. But I'm going to go down this lane just a little bit further.

Adrian Mendoza

00:17:10 - 00:17:12

So, no, let's do it.

Donna Mitchell

00:17:12 - 00:17:41

In those populations and a lot of areas of the world, they don't have identity, or they may be even in the western hemisphere without identity. So how does the banking. There's fintech overseas and probably here as well. But how does fintech help those that don't have identity as well? I've had some questions come through regarding that. Could you explain that to us, too? That's all in that same space with Fintech and DeFi and everything?

Adrian Mendoza

00:17:42 - 00:18:32

Yeah, this is where the AI component comes in. We're an investor in a company that does this just exact same thing, because one of the things they realized was that identity is such an ethereal term. Now, usually in traditional financial institutions, identity matter, FICO score, an equifax score. Well, what ends up happening is people have now been committing fraud. And using your name, my Social Security number, my other address, it passes through all the fact checks, which called KYC, know your customer. And then it's being used to launder money, it's being used to fund, you know, the war in Ukraine. It's being used to do all the bad things. Well, we've got to really rethink what is identity.

Adrian Mendoza

00:18:32 - 00:19:14

And because, you know, we all think my identity is the FICO score. It's not. It's who I am, my behaviors, my name, my Social Security number. Do I have a plush dog or not? And so you have to start framing, like, using AI algorithms to, you know, to be ahead of the guys that are committing fraud. I remember talking to another investor who just scared the pants out of me. Like, this was like, eight years ago. And he said, hey, we were the victims of wire transfer fraud. And I was like, how did it happen? Like, how do you send the money to the wrong person? And he was like, let me tell you the ways.

Adrian Mendoza

00:19:14 - 00:20:05

By the time I was done, I was just freaked out. And he was telling me these stories of, oh, yeah, people are mining your email. People are seeing when the CEO is on a plane realizing he doesn't have email, so they'll build social engineering to go back and say, hey, I need $5 million to be sent here before I land. And the CFO is like, oh, okay, great, let me send it. And then the guy sends in and goes, hey, why'd you send $5 million? And there's this whole, like, fake email things that are done. And so this had happened to this investor, and so they started going back and tracing the money, and they were in mainland China. And he was like, I'm seeing the factories where there's people just, like, laundering money and doing all of this stuff. He's like, it didn't become real until I saw it.

Adrian Mendoza

00:20:05 - 00:21:12

He's like, we were able to recover three quarters of the dollars, but a quarter was already spread out into the ether. And so that really got us looking into, like, okay, you know, and this was kind of that seed was, how does cybersecurity play into the movement of money? Because as soon as you start moving money easily between tokens, there's an opportunity of people using it to launder money. There's people using it to, like, create fraud. And so what's different than any time below, anytime that's ever happened, is all of these technologies have to be integrated. If you don't have cybersecurity, you're going to end up having fraud and identity. If you don't have AI algorithms that are checking your cybersecurity. Like, it's a all this trifecta and checks and balances that has to been, that is actually continuously changing because there's always somebody that is trying to create fraud using our identity. And for the longest time, I've been talking to startups and they've been like, hey, one day we're gonna have a global identity.

Adrian Mendoza

00:21:12 - 00:22:25

And I'm like, man, I could barely go to the DMV right now and get, like, a new, like, though I agree with it, it's not going to happen anytime soon because there's still a lot of people that don't have a driver's license that are in this country and barely have an id so how do we start creating things, especially for individuals that are under bank and, you know, like a score on using alternative data sets, not just like, are you paying rent? Are you like, how much do you get paid a month? And beginning to look very differently because in the traditional world of credit scores, all we're seeing is like, you know, your Social Security number, and then when you go to apply for a loan, all we're looking at is debt to income ratio. How much do you owe? How much money do you make? And not really, like, how much are you making? Like, have you been good at paying off loans? And that's where I think we're starting to see this emergence in this web three wave of just combining all of these disparate things, these things that have been little pieces of the puzzle to make this big, cohesive puzzle that's going to help everybody.

Donna Mitchell

00:22:26 - 00:23:02

Wow, that was a lot. So you have your entrepreneurs, your brands, consultants, solopreneurs. What do you recommend? What are the top three or five recommendations for someone going forward in today's new world? Especially if they got to look at AI, cybersecurity, web three, decentralization. You've seen it from both sides, from the bootstrapping to the venture capitalists. How do you recommend those that are listening? What do they do? How do they get started? How do they assess their needs? What do you suggest?

Adrian Mendoza

00:23:03 - 00:23:45

Yeah, I think it's more than any time before, it's about education. It's about listening to incredible podcasts like this, talking, you know, hearing these goals, you know, the guests that you have just been like more than any, any time before. It's. The education aspect is so much easier than when I was a founder, you know, when I was a founder, you know. Yes, the Internet was around already, but there wasn't this much dissemination of content. There wasn't like, man, I want to learn about Defry from Donna. Let me just listen to her next ten episodes. You had to do events, you had to go out and meet people, you had to go and talk to other individuals.

Adrian Mendoza

00:23:45 - 00:24:51

It was really, there was definitely a lot more of a harder hill to get over. Nowadays, it's interesting because when I've had these conversations with people on the northeast about a lot of our events have disappeared and they become virtual, they become other ways of getting podcasts. The events will come back. But I like what's happened post Covid, is that there's this next generation of founders and investors and people like yourself that are out educating and telling stories to just be able to, because right now, you can go into anything on Google and search for a term and just go down the rabbit hole. And it's funny because one of the things I always encourage to our team, to not just our founders, but our investment team, is what one of my investors, Adam, calls going into this world. And he says, hey, every day I go into this world, I just get in there. I just, I'm reading, I'm on LinkedIn. Kinney's just all about, like, just learning and making connections.

Adrian Mendoza

00:24:51 - 00:25:28

Like, every morning I'm reading two or three newsletters. I'm just, I do the same thing. I go in this world. I give myself the time to just follow down a path and say, hey, today I'm going to learn about this. I mean, I'll tell you, a couple of years ago, there was a founder who was like, hey, I want to. I think there's an opportunity on using a different type of PC chip for mining crypto. And I went down the rabbit hole to the point that, like, three months later, I was talking to the guys who were designing chips at intel, and they were like, hey, they were like, oh, you want to talk about it? Let's geek out. And it just allowed me to just go down the rabbit hole.

Adrian Mendoza

00:25:29 - 00:26:26

We never did anything with it because then crypto crashed. But it was a great exercise of just being in this world and just learning. And this is the best part about being a founder, is everybody knows your struggles. Everybody knows that you're building something and get a community and resources around you to just go down the rabbit hole. Give yourself the time to be able to just learn and just be able to immerse yourself in a topic. Because even the thing with what's different with Fintech and Aihdenhe, especially more on, like, the financial technology side, you're dealing with things that are, like, really down the rabbit hole. Like, the reason that we started investing in that space was we had, you know, gone through technology, through regulators before we'd gone through legal. I had helped banks like Tia build some of their mobile apps.

Adrian Mendoza

00:26:26 - 00:27:13

And I was the one talking to the lawyers. I was the one, they were like, no, you can't do this. And I'm like, hey, what if we tried it this other way? And they're like, yeah, you're kind of right. Yeah, that works. And so, but that was that experience of, in a world that you look in, you see these blockers, and we were like, hey, let's find a way around. But we have to know enough to be dangerous, but we also have to know, what is their pain points? And that's really the great thing that I think that's where there's a massive opportunity in these spaces to find pain points that you know of. I always encourage founders that if they're like, hey, I want to disrupt this part of banking. I'm like, spend one or two years in that space.

Adrian Mendoza

00:27:13 - 00:27:56

Immerse yourself. Go work for a company that does this. See it from the inside. And then once you know from the inside and you know what the problems are and you know who to talk to and you know, who's the guys that are making the decision, then step back and create your idea. Because this morning I was on a call with our blockchain company, and they were actually working for a large bank. I met them in 2018, and they came up with this idea, and the bank was like, yeah, we're never going to do that. And it was really about creating a marketplace to sell certain securities between the US and the UK. And it was funny because it took them to one get out of the safety net.

Adrian Mendoza

00:27:56 - 00:28:30

But it was a long journey. But now we're getting to the conclusion where we will have one of the first regulated networks from the SEC to be able to sell these and trade these securities. But it really took them for them to be in the inside, find that problem, and then be like, I think there's something here. I mean, and that's the portion of any founder that find the solution, find the problem, but focus on the problem and make sure that your solution actually fixes that problem. And it sounds so basic, but it's the plight of the founder.

Donna Mitchell

00:28:31 - 00:29:28

Sorry, but I didn't mean to interrupt right there, but you really walked right into my next question, right into it. There's all this confusion with the governance, and, you know, Europe is ahead of the United States. United States is taking too long and not doing anything. They're seeing things as securities. Can you kind of clean that up for us just a little bit on the governance issues, especially here in the United States, in comparison to the other countries, countries being a little bit more forward thinking with the securities and the compliance and the SEC and Coinbase and just all of that banking stuff, is that something do you mind giving insight on? There's some clarity, because people don't know what to do. They're like, well, I got some crypto in Coinbase. I kept it there, but I don't know if they're going to turn this into this, so maybe I need to go to a hard wallet and. But no, I didn't do that yet, so let me just chance it.

Donna Mitchell

00:29:28 - 00:29:43

But then some people are rolling everything out, and those that are starting businesses and founders, they starting off overseas, they want they not even going to continue to stay doing business in the United States. We're losing a lot of founders, I hear. Can you clear that up? You mind?

Adrian Mendoza

00:29:43 - 00:30:23

Yeah, I mean, it's interesting because you look at what's happening in Europe. Europe has had governance on identity for the last three, four years, you know, the whole GDPR thing. And in that case, you know, the issue there is like, all right, I. An identity is a customer. An identity is an employee. So that employee customer inherently owns their data. So when they leave, you have to remove them entirely. Well, it's kind of interesting because if you think about blockchain, the whole point of blockchain is that it's a connection, an immutable ledger of every transaction that happens.

Adrian Mendoza

00:30:23 - 00:31:29

So how do I just chop it off to say, oh, this person's gone. Let's remove that ledger entirely? That's where sort of the hard part is. But at the same time, what's happening in the UK, what's happening in Australia, what's happening in Europe, there's been this bigger push on regulating cryptocurrencies, regulating defi technologies, because if you look at what's been happening in the US ten to 15 years ago, gains and losses for cryptocurrencies were not reported as taxes. They were people that made millions, that never paid taxes on them selling bitcoin, because it didn't exist. It was really, until recently, I would say about five, six years ago, the SEC created a sandbox for individuals to ask questions, because prior to that, they were just suing everybody. Hey, I started a crypto exchange, oh, we're going to sue you. And they're like, why? I have no idea, but we don't know what you're doing. And we're really fearful of what's happening.

Adrian Mendoza

00:31:29 - 00:32:42

And it was funny because I was, a couple of months ago, I was watching a show on Netflix about a canadian exchange that dissipated. And we were just talking about everything that happened with some of the exchanges that happened here, the inxs of the world and all that. And I was like, you know, that story of that exchange is exactly what happened with that other exchange here in the US. But just nobody learned about it because there was no regulations around it. Finally, now you're starting to see the regulators wake up because so many people lost so much money in the last couple of years. There had been such a boom in crypto a couple of years ago, where everybody was buying crypto, including the mailman. The mailman was telling me, hey, which currency should I buy? And I'm like, hey, man, that's your decision. It's been interesting because I think it's much needed here in the US, I think, where we have always been much more laggers in, like, you know, in what's happening on that front, because I think there's been, you know, just politically charged whether or not you're, you know, you bring in regulation, whether or not you're charging, you know, for transaction.

Adrian Mendoza

00:32:43 - 00:33:51

And I think we're just at the infancies in the US. The hard part is, you know, when the hammer comes down, it'll come down all at once. But I think in between then, I think there is this big gray area to build companies and build technologies and also build things that are standards that don't exist, versus in Europe and Australia and other parts of the country, you're much more forward in regulations. You're just much more forward in the use of technologies. And it's hard to wiggle around and create a standard because there's so much like blockers and gates, which is, again, a good thing. But I think the better thing is the fact that we have that flexibility. But we always have to be mindful of when regulations will come down. It's why things like the cannabis industry has always sort of been in this gray zone, because none of the financial institutions wanted to take their capital, because they didn't know at any moment in time regulations would come down to make it illegal, and the bank would be sitting on capital that was illegal.

Adrian Mendoza

00:33:51 - 00:34:40

And so it's been really an interesting five to ten years of watching this sort of boom and bust cycle. I think we're kind of in on the next boom cycle with some of this technology. But there'll always be a correction when you bring in, because if you think about it, the giving of advice in the United States is regulating. You can't go to a robo advisor to tell you what you're going to make. That's all regulated by advisors. That's why we have certified financial planners and registered investment advisors. That's why there's a checks and balances when you buy a mutual fund or an ETF, or when you trade on the open securities. It's interesting because we have things that are fully regulated, and we have things that are completely still not regulated at all.

Donna Mitchell

00:34:42 - 00:35:06

Well, that helps clear a few things up. So what is your. Before we close with everything that you have learned, I usually like to know, and the audience likes to know, what do you think we need to keep our eyes on? Or our eyebrows raised at, or what are you a little bit suspect to, or have some concerns about? Or maybe a fear about happening? And then what are the bright spots? What's on your wish list?

Adrian Mendoza

00:35:07 - 00:35:51

Yeah, it's interesting because when you have been in tech long enough, you see these boom and bust cycles. So I was on CNBC a couple of months ago, and they were asking me about AI, and I was like, I was at the first hype cycle. I was the AI of everything. We're on a second hype cycle. And yes, once the hype goes down, then we're going to see the advent of interesting technologies. I always joke about the one pitch deck I saw last year, which was like AI for putting pizzas. And I was like, literally it was a deck of pizzas and pepperonis. And, oh, we're using computer vision and AI on cameras to see whether or not there's enough pepperonis on this pizza.

Adrian Mendoza

00:35:51 - 00:37:14

And I'm like, it's a 15 cent pepperoni. Who cares? And so that's where things get caught up in the hype cycle. The, hey, if I put in AI, it'll, you know, I may be able to raise more money. I think we're starting to sort of be mid hype cycle, but we're also starting to see a lot more things where financial institutions, banks, credit unions, small minority depository accounts, you know, you know, minority owned banks, which are the NDIS, them starting to come to individuals like ourselves, having these conversations about how do I use this technology, how do I use AI, how do I use cybersecurity? What fintech should I be doing on? That's what I love, because that's where all of a sudden you have this next local bank. This is about thinking globally, but acting locally. You have these local institutions that are starting to going to use AI, they're starting to use fintech, that are starting to use. If you think about like something we take for granted now, like mobile check capture, that didn't roll out to bank of America or chase first. That went to small local community banks first, and then they tried it, and then that was successful, and then the big guys ended up using it next.

Adrian Mendoza

00:37:14 - 00:38:16

And so I think we're kind of just starting to be there where you're seeing these opportunities of using some of these financial institutions, using web three technologies and defi technologies and AI and blockchain. Then I think we'll start creating standards. And I think we always look at other parts of the country, whether it be Africa or LATAM. But I think what's harder there is because there are no regulations, so it becomes a wild, wild west. But when you sort of find a way of weaving them into very regulated environments, whether it be technology or services or ideas, that's when they have a sticking point. That's when they're sticky. When you can see these long term people that five years of war would not be talking about AI are now like, we should be talking about this. We should be using this to help our customers underwrite for the next loan, help underrepresented customers, offer them health insurance.

Adrian Mendoza

00:38:16 - 00:38:25

How do we use a non FICO score? All of that, I think, is going to be sort of our fintech for good. And that's what excites me about the next three to five years.

Donna Mitchell

00:38:26 - 00:38:38

It excites me just to have this conversation. I'm going to have to have you back because we've learned a lot in this little bit of time. So are there any projects or opportunities that you're now looking at that you want to share with the audience?

Adrian Mendoza

00:38:39 - 00:39:19

Yeah, I'm working right now on how do we find a way of getting smaller banks, especially minority owned banks, to start learning about more products and more services. One of the things I also do is trying to get our founders. We invest in about 90% diverse and female led founders, and I love to find stages for them to be able to tell their stories because I think even my story is a non traditional story. I'm from Southern California. I'm parents of mexican immigrants. My dad was a carpenter cabinet maker. My mom was a bookkeeper. The most complex financial product that we had was a CD.

Adrian Mendoza

00:39:19 - 00:40:01

And I always love to tell people, if I can do this, anyone can do this. And just takes being, you know, going, getting yourself out there, telling your story. The power of just telling your story is just really to get more of us out there to say, hey, if he could do that and Donna can do that, I could do a podcast, I can go build a fintech, I can start investing. And that's really for me. Like, what gets me out of bed is let's get the stories out there so that others who are in the swirl can find podcasts like this, can find the Adrian Mendoza, can find Adona, can find all these incredible founders and say, hey, I can do that too.

Donna Mitchell

00:40:02 - 00:40:13

That is exciting shaping tomorrow together. So thank you so much. How can we reach you? How can the audience reach out and touch you do you prefer LinkedIn or anything specific?

Adrian Mendoza

00:40:14 - 00:40:29

I'm a big LinkedIn fan. I'm always posting there. So feel free to find me on Ader Mendoza on LinkedIn. I'll be the one at Mendoza Ventures, even though there's a lot of Adrian Mendoza's out there. Or just reach out to us on our website at Mendoza dash Ventures.com.

Donna Mitchell

00:40:30 - 00:40:54

Well, I'd like to thank you for being on pivoting to web three podcast. And to everyone else, good morning, good afternoon, good evening. Thank you for letting us share. Thank you for letting us serve you. And we're shaping tomorrow together. Until next time, be safe. Thanks for checking in the pivoting to web three podcast. Go to pivoting to web3 podcast.com to download and listen, or web3 game plan to check out the videos.

Donna Mitchell

00:40:54 - 00:40:56

Thank you. We're shaping tomorrow together.