Collector’s Holmberg is Refreshing a Stifled $400B Market in Physical Collectibles
I had the pleasure of interviewing Tuomas “Tuom” Holmberg, a serial high-tech and biotech entrepreneur who is spearheading a new blockchain startup called Collector. Tuom earned his MBA from the University of Southern California after battling through Caltech’s fierce physics program. While founding and raising over $100M in funding for early-stage companies, Tuom’s favorite hobbies have had him keeping a close eye on collectibles markets and cryptocurrency for far longer than most. He began investing and tinkering with Bitcoin in 2013, and his trading card collection dates back to 1993 when he first became involved in competitive Magic: The Gathering. In those days, you couldn’t use protective card sleeves in tournaments, so he was riffle-shuffling his Beta Black Lotus many times per game (a card now worth over $200,000). Since then, blockchain and collectible trading cards have grown into global behemoths. Tuom is developing a bold vision to bring these passions together.
Thank you so much for joining us!
Thank you. It’s a pleasure to be here.
What motivated you to launch your startup?
From rare rookie cards to vintage wines, the value of our precious collections is undeniable. 2020 saw over $400 billion in collectibles sales despite an immense amount of marketplace friction. You see, most collectible sales occur on the biggest e-commerce sites, where the process takes weeks, fees can be over 10% per sale, and fraud protection is severely limited for both the buyers and the sellers. Meanwhile, NFTs and blockchain are transforming the paradigm for ownership and trust. An NFT can be sold or traded almost instantly to anyone in the world, regardless of fiat currency or national border. The blockchain offers unprecedented access, transparency, and security, and at the intersection of these worlds I saw an opportunity.
On the surface, Collector is an e-commerce platform for graded collectibles of all kinds, but instead of making users pour time and money into photographing, posting, shipping, and insuring every sale, these burdens are either eliminated or handled by smart contracts, simplifying the work needed by both buyers and sellers to close a trade. The unique NFT associated with each physical collectible — what we’ve dubbed a “pNFT” — functions as the record of ownership for the item, allowing instant and secure transactability on the blockchain.
As NFTs, they also open a world of native blockchain functionality, from collateralized lending to interest- bearing DeFi [“decentralized finance”] protocols, all using smart contracts that protect the integrity of investments. That’s all about blockchain in general though. Our real innovations are in standardizing nuanced NFT legal contracts and building a unique user experience tailored for the collectibles community to adopt and trust this process. We are collectors ourselves, and with ninety years of combined collectible trading cards experience we are building this to solve real problems. We remember the bright-eyed, bushy-tailed teenagers we were when starting out in this hobby. It was great. What wasn’t great was the first time we got ripped off — everyone has their story.
What are some of the ways people get ripped off?
The fundamentals of collectibles fraud haven’t changed much over the years: mislead people about the provenance and value of an item, usually by simply counterfeiting it, and pass it off as the real deal. In the age of e-commerce this got worse, since buyers don’t see the product until a week or two after paying to ship it. Online marketplaces have tried to reduce risk with seller ratings and purchase protection, but it’s not enough. For one thing, they don’t see the goods, and nobody wants an e-commerce site to handle their valuable collectibles unless they’re experts. This opens up new avenues for the same old tricks. For example, a bad-faith buyer can flip the classic counterfeit fraud on its head: they receive an authentic, valuable collectible from a trusted seller and submit a grievance to the host platform saying that they received a fake. Then they return their own counterfeit, leaving the seller with no way to prove it wasn’t theirs to begin with.
Even the e-commerce platforms themselves are culpable of ripping off their customers, especially when it comes to transaction fees. The usual 10–15% off-the-top cuts too far into potential profits for collectors and is simply too much overhead for the casual hobbyists to even participate. The joy of trading and collecting is hampered if you’re always fighting tooth and nail in the margins.
By securely vaulting graded collectibles and leveraging the natural liquidity of NFTs, we’re addressing all these problems. Combined with DeFi investment opportunities that unlock collectibles’ intrinsic value and a $COLL rewards program that can reduce transaction fees to below 2%, this isn’t just the platform collectors want; it truly is the platform they need.
What is it that excites you about what you’re building?
We have a personal stake in modernizing these markets, not only as founders but as collectors. Collections are all about passion — our passion — and we want to capture that personal element every step of the way. For the first time in my career, I’m working on something that unites my favorite hobby with an exciting business opportunity. I didn’t realize how powerful that was until I left my previous job and started building Collector at 42 years old. I wish I had learned this earlier.
What has been your biggest challenge when growing your startup?
Crypto and Web3 are severely misunderstood, even by “experts.” Philo Farnsworth once famously said, referring to TV, “There’s nothing on it worthwhile,” and Clifford Stoll of Newsweek in 1995, “The truth is no online database will replace your daily newspaper.” It wouldn’t be hard to fill a book with all of the fantastically wrong predictions about blockchain, and we’ve barely opened the cover of a thousand-page book on how Web3 is going to change the world; we’re not even past the table of contents.
People are very skittish about what they don’t understand. Brilliant developers I’ve known for twenty years have thrown blockchain out of the window because (1) they initially thought it was only for laundering money and buying illicit goods and (2) they had the opportunity to buy bitcoin for less than $500 and missed it. The only way they can live with themselves now is to be convinced that this is all going to zero. Well, it’s not.
Launching a blockchain company like this in the United States is simply hard work. First, I’m way over 25 years old and have a family. Second, raising capital is challenging when you don’t fit the bill. I’ve had VCs tell me they invest in blockchain, but only in digital-only NFT projects, and not in any tokenization of physical assets. Yes, some NFT projects have done phenomenally well, but if you’re looking for a new NFT company that you think will be the next Yuga Labs you need to immediately get out of the business. The ones that will be the most successful will be those who can imagine a future ten years from now where blockchain is mundane and is integrated seamlessly into our daily lives, solving real-world challenges.
In simple terms, what we’re doing at Collector is not only hard because it’s on the blockchain. It’s hard because it’s at the bleeding edge of the blockchain. That’s why we’re working with the types of people, partners, and investors who had the foresight to invest in crypto back in 2014 and [Crypto]Punks in 2017.
What are your plans for your startup?
While we’re preparing to launch with trading cards this year, our roadmap is also set to include comics, coins, stamps, and wine within the next 2 years. That’s not even close to an exhaustive list though, and many more features and asset classes await!
The Collector platform will also launch with its own coin, $COLL, which will offer users a unique way to deal with transaction fees, especially for higher valued items, as well as influence over governance of Collector’s pNFT protocol. We believe that decentralized governance is a powerful tool for ensuring Collector is the platform people want. We’re building towards a day when the Collector pNFT protocol can operate by itself as a completely independent DAO [“Decentralized Autonomous Organization”].
Beyond that, we’ve got much more in store for the crypto and collector enthusiasts, but we’ve got to keep some surprises. And for those that don’t care about crypto, we plan to provide a seamless experience for them too. Just don’t be the last horse on the highway with electric cars flying past you!
If you had to share, “words of wisdom,” with a Founder who’s about to start their own startup, what would they be?
If you’ve mostly worked at traditional office jobs or even at growing startups, don’t expect your entrepreneurial journey to be remotely familiar. You’re going to have way more on your plate than time permits, and you’ll need to keep your priorities aligned with establishing your MVP and supplying working capital for your company. The same principle applies to the rest of your founding and early team members, so be prepared to put effort into steering the ship for those with more traditional backgrounds. Even while you stay open to strategic pivots, you’ll need to keep your team laser-focused on those two objectives.
How can our readers follow you on social media?
Catch our latest announcements on Twitter or Telegram. You can also always find our latest links on the Collector homepage: https://collectorcrypt.com/.
This was very insightful. Thank you so much for joining us!
Thanks, Jason. It’s been an absolute pleasure!
