Decentralization and the Challenge of a New Paradigm

September 23, 2016 View Comments

I know I'm on a Laura Shin/Forbes Unchained podcast kick, but what can I say?  There's a lot of value in there.

The most recent one that inspired this post (and a few more to come) is Blockchain 101 With Andreas Antonopoulos: How Bitcoin Makes Each Of Us As Powerful As A Bank.

Andreas is a well respected entrepreneur and bitcoin expert and in this interview he makes a key point that I think should be in everyone's frame of reference.

Roughly paraphrasing, he said "the big disruption isn't Bitcoin or even Blockchains, it's the move to de-centralization."

He's right and he foreshadows a key problem for the industry as it matures.

How to tell the story of a decentralized existence.

Think about it...for centuries, human societies have been organized in a hierarchical, centralized fashion. Tribal chieftains, nobility, kings.

Heck, "all roads led to Rome" for a reason...it's where power was concentrated.

In the past century, large organizations were built in a centralized "command and control" fashion.  

Satellite offices were like the distant provinces of the empire...irrelevant and basically ignored.

No longer.

Now, every satellite office or remote outpost plays a critical role in the infrastructure and integrity of the entire system.

It's not about the center. 

It's about the periphery...and everywhere in between. It's the nodes.

But getting people to think like that isn't going to be easy.

It's like someone walking into a car dealership and saying "I really need 4 wheel drive."

"No, you don't," says the salesperson. "Our cars hover."

"Right, but the winters here are tough. I've always needed 4 wheel drive."

"Yes, winters are rough here, for sure. But now that cars hover and don't touch the ground, you don't need wheels."

"Great. So how much are the best tires?"

The paradigm shift is tremendous. People like Laura and Andreas are paving the way to help others understand it.

Not going to be easy, but will be interesting.

 

Cryptocurrencies and Alt-Portfolios

September 22, 2016 View Comments

Learned a new phrase today.

“Alt-portfolio.”

I was chatting with Neeraj and Jerry of the Coin Center and they introduced me to the CoinCap app (also accessible on your desktop through CoinCap.io) which tracks all of the cryptocurrencies out there.

I made a remark that I have something like 10 different ones.

And they said, “ah, you have an ‘alt-portfolio’.”

The other day, I was listening to the Unchained podcast interview of ARK's Chris Burniske And Coinbase's Adam White and while I don’t remember the exact data they shared, they had some really interesting points to make about how Bitcoin as an investment could start making a lot of sense for many people.

They pointed to how it didn’t necessarily move with or against standard markets which gives it a special kind of appeal from a diversification perspective.

I know that many people still think of Bitcoin as a Darknet currency that is best used for buying drugs on Silk Road type markets, but I think we’re past those early days.

There are plenty of issues with Bitcoin (block size being one of them), but I think the eco-system is past the tipping point.

There are a lot of people who have a vested interest in the success of Bitcoin so, while it’s not guaranteed, I think it’s increasingly likely.

I will admit that I am long on Bitcoin, so I am one of those with a vested interest.

Necessary disclaimer: Do not construe this post as financial advice. 

Blockchains and the Packetification of Everything

September 21, 2016 View Comments

Was listening to a fascinating Unchained podcast from Forbes featuring Bill Tai, a longtime Silicon Valley insider.

Bill was describing Blockchains as the 6th big Wave of technological revolution. 

Whether it's the 1st, 10th, or 500th doesn't matter, but at one point, he made a killer comment.  

"TCP/IP is to Telcos as Blockchain is to banks."

He went on to talk about just how data, voice, images, etc. could be broken up into packets for delivery over the network and reassembled, that blockchains give us the power to attach the same properties/capabilities to physical items.

I heard him say this as I was stopped at a redlight.

Looking at the car in front of me, I started to imagine the various components of the car and how each one could be an IoT device, registered on the blockchain, and delivered/managed as a service.  

Let's explore the tires, for example.

A smart tire would have its own IP/blockchain address and be connected not to a car per se, but it would record how many miles it had driven, how many punctures (from nails, for example), it had and were subsequently repaired (or self-repaired).

The tire manufacture could send Over The Air (OTA) updates to the tire that maybe change the safe mileage limit (up or down) or inform the car owner that it needs to be changed.

Remember...tires can be bought and sold, so someone who has an old car that only does a small amount of driving each year is happy to have a good tire at a good price for its needs. The tire could sell itself on behalf of the car owner when it recognizes that the habits of the car to which it is attached have changed.

This protects the past and future owner of the tire. Right now, you have no way of knowing that a tire or a phone or a TV or a laptop is exactly what the seller says it is, but if your refurbished laptop could be verified that the parts are up to a certain standard because they are evident in the blockchain, that's pretty cool.

The car owner could be Uber or anyone, but that's a different topic.

The point of this thought exercise is merely that if you can assign a virtual address to a physical thing (a tire, a soccer ball, a laptop), you open up an entirely new range of business opportunities.

Every physical item can be broken down to its smallest level, get "packetized" and have its value optimized.

That's pretty revolutionary.

(Follow Bill on Twitter...he's apparently a big kiteboarder as well and does events where people network while kiteboarding. Mine kind of event)

Fish and Wine on the Blockchain Menu

September 20, 2016 View Comments

Back when I started thinking about the potential disruptive force of blockchains, one of the use cases that jumped into my head was supply chain provenance.

In other words...how do we actually know that the things we are buying are actually what we THINK we are buying.

If brands are about a promise to deliver a specific story, then the authenticity of that story is critical to increasing the brand value.

The other day, I was on the train back from New York and sat next to an elegantly dressed woman in her 80s. Refined and thoughtful, she had lived in Milan, Brussels, and New York, and now lives in Delaware.

As is my way, we started a conversation and it turns out her family is in the wine business.

After I helped her customize the notifications on her iPhone, we started talking about how the world had changed in her lifetime and how it might change in the future.

Naturally, I shared that I was interested in this new technology called "blockchains."

I began to explore how they might impact her business.

She was skeptical. Which was fine.

Eventually, I said..."well, I bet if we google it, we'll find something."

And we did.

She was surprised.

"Forward it to me," she asked. "I want my son [who runs the business] to see this."

Good for her.

While the provenance of a bottle of a wine secured by a blockchain may not be a differentiator right now, it's not difficult to imagine that it will be one day in the near future.

Soon thereafter, I saw another article..about blockchains and fish.

Apparently, there's a huge racket going on already in terms of fish substitution (you buy Grouper, but you get something else).

That, and illegal fishing/overfishing issues.

Bottom line: the blockchain revolution is about to hit the shores of a lot of industries where transparency hasn't always been at the forefront.

Should be interesting to watch that.

Avoid the Mistakes of the Past for Marketing Success

September 19, 2016 View Comments

I was a history major in college.

People often ask me how a history major got into marketing.

I tell them that it’s really the same discipline.

You collect a bunch of facts, weave together a coherent thesis about how those facts interrelate, and then you try to “sell” the idea.

That’s marketing in a nutshell.

Recently, however, I realized that there’s another advantage to being a historian/marketer.

As George Santayana said, “those who cannot remember the past are condemned to repeat it.”

When you go to market with your innovative (hopefully) product or service, you must assess the competitive landscape within the mind of your potential customer. (For a great book on this, see the classic Positioning.)

However, you must also try to figure out where your innovation sits within the arc of the larger macro environment.

That’s where Carlota Perez’s magnum opus, Technological Revolutions and Financial Capital, can help.

She describes how every major technology revolution:

  1. The industrial revolution
  2. Age of steam and railways
  3. Age of steel, electricity, and heavy engineering
  4. Age of oil, automobile, and mass productions
  5. Age of information and telecommunications

All go through the same 4 stages

  1. Eruption
  2. Frenzy
  3. Synergy
  4. Maturity

 

Why is that important?

It’s important because as you read the book, you’ll start to see where you fit and where we are.  You’ll be able to read the signs and be less subjected to the forces beyond your control.

Blockchain technology for example is in the eruption phase.

I would argue that autonomous vehicles are as well, though you can see the early signs of frenzy down the road.

Placing things in their historical context and looking at it today increases your chances of survival down the road.

Decentralized Marketing Orgs For a Decentralized World

September 14, 2016 View Comments

The march of technology is headed away from centralization to decentralization.  That's one of the the revolutions behind blockchain technology and things like IPFS.

Taking a step back to look at the larger world and the changes we have seen (particularly with the specter of September 11 still on us), we have clearly moved to a more networked and decentralized world overall. 

As Peter Hinssen might say, the Network Always Wins.

So, that got me to thinking about the structure of organizations and marketing teams, in particular.

Marketing is the function that is (supposedly) the function that is most closely engaged with the realities of the market.

Yet, to this day, we still have hierarchical organizations that are command and control, for the most part. Analogous to the way the US military is structured.

The military was on my mind as I read General Stanley McChrystal’s book, Team of Teams, where he talks about the rude awakening that was the US Army’s encounter with Al-Qaeda in Iraq and Afghanistan. How his units were centralized and his enemies were decentralized.

McChrystal quickly recognized how he needed to reimagine how the teams were built and empowered.

Quoting from the Kindle excerpt (attribution below):

 “He made sure the features commonly present within a small team such as shared awareness, trust, decentralized authority, and team-wide purpose are also defining characteristics of the umbrella team.”

The innovation, insights, and awareness happen at the edge of the networks, not in the center.  It’s critically important to empower the edges of those networks with information, resources, and feedback loops.

As the infrastructure and systems that support the world’s largest enterprises move away from away centralized control (much to the annoyance of CIOs, I would imagine), it is only a matter of time before the organizations that rely upon those systems get more and more decentralized as well.

 

 

 

 

--Instanalysis (2015-08-28). Team of Teams: by General Stanley McChrystal | Key Summary Breakdown & Analysis : New Rules of Engagement for a Complex World (Kindle Locations 96-99). Unlimited Press Works. Kindle Edition.

 

 

Disrupting Healthcare Trust Providers

September 13, 2016 View Comments

Apparently, there's a huge industry comprised of companies that sit between healthcare professionals (nurses, technicicans) and providers that certifies that the individuals have received the certifications they are claiming.

Things like training on devices or continuing education.

It makes sense.

We all know cases where people have lied about their resume or their credentials. Obviously, the stakes in healthcare ("I know how to work this machine") are much higher than many other places.

It's a $16 billion per year industry according to Cyrus Maaghul

And it could (and probably should) all be wiped away.

In his brilliant post, Cyrus outlines how blockchains could replace all of these companies to prove without a doubt that a given individual has the training or certifications s/he claims and that the employer requires.

And all of that money?

Well, with never-ending cost increases in providing care to growing, aging, and longer-living populations, those savings can be distributed anywhere else...to providers to re-invest, to consumers/governments/insurers in the form of savings, or to individuals in the form of higher wages.

I know I've been on the HR blockchain kick for a while, so this post fits in line with that, but Cyrus' example is just ridiculously concrete.

More evidence that this massive wave of disruption is coming in hard and fast.

Blockchain HR to Improve Hiring

September 12, 2016 View Comments

Every time a new employee joins a company, the announcement email says, "s/he is going to be a star!"

Of course, most of the time, that's not the case.

So what goes wrong?

One of my all-time favorite marketers is Will Knight.  He's a former Circle of Excellence Award winner at Microsoft (I can't even begin to explain how prestigious that is) and, for some reason, an avid reader of this blog.

After reading the post last week about Blockchain based HR systems, he wrote me a note:

A potential disruption idea for you to think about - job references.  

I provided a couple of references 2 weeks ago.  For the level of seniority they were hiring (VP and SVP), they were really light.  One was email only from the CEO, the other from a scripted HR phone interview.  Scary that people are adding folks with such minimal level of evaluation (other than 45 minute interviews).  I'm wondering if there is a technology solution?  

What if you took the person's references they provided and then evaluated their social and professional network and identified the 'true' references that could provide the most insight in the areas you wanted to explore?  Instead of having the candidate select them (quite risky and very biased), you utilize the power of the network/connections to identify the best references.  I'm in the middle of The Seventh Sense about networks so this is on my mind.  Blockchains too.

...Microsoft added 'peer evaluations' to the review system the last few years but the # of recommendations you could provide was unlimited.  Therefore, I could embark on an endless 'quid pro quo' with my colleagues to 'game' the system.  I like your approach of a finite set of tokens that could be distributed evenly or concentrated to the key players.  My #1 request to Outlook was the limitations of the usage of '!' in emails.  Imagine if you start out the year with only 12 '!' you could utilize.  People would be much more judicious and accurate in their evaluation.

 

I think he's on to something here.
 
The idea of having peer-reviewed individuals where you can have a higher degree of trust in the candidate's "measured value" because (unlike exclamation points in Outlook, they are finite!!!) :-)
 
So, the crypto-token tracking of the candidates is now not only INTERNAL to a company but EXTERNAL as well.
 
It's something you could, theoretically, put on your LinkedIn profile.  Certainly a higher value than number of endorsements or recommendations (though those are nice).
 
And the relative value of a HR cryptotoken (needs a sexier name) from a highly respected company (say Nike) would be more than one from a less respected company (say, well someone else).
 
Just like a dollar is worth more than an Ecuadoran Peso.
 
The market for the crypto-tokens in HR might also reflect the relative percentage of the total available. So, with 75,000 employees at Microsoft who each have 20 tokens per month or per year or whatever (as we want to avoid end of year recency bias issues)...if you have received 100 tokens, you have 1/1500 of the total.
 
Whereas, if you have a smaller company with only 50 people and you received 100 tokerns, you'd have 10% of the total HR tokens available that year. That's pretty big.
 
So, while Will could "game the system" with one friend, in this model, he can't do it with more than one. So it doesn't work.
 
In either event, a dashboard of some sort could provide the hiring manager or HR person at a future company with a much better assessment of a person's relative value in their past jobs than a resume with broad claims.
 
Botton line: Will's experience as a reference highlights a key issue with hiring. Making mistakes is expensive. And we all do it.
 
 

How a SaaS company could use blockchains to justify prices

September 9, 2016 View Comments

Building off of yesterday's idea of a blockchain-based crytpo-token that HR departments could use to more democratically and meritocratically recognize top performers, I was thinking about SaaS platform providers who coul also use cryptotokens to recognize top utilization of their platform.

Yes, it's kind of like loyalty points, but the transparency and publicly available ledger might actually build confidence that the system isn't being gamed and that people aren't being manipulated.

Maybe, for every 10 hours of usage, or 10 actions, you get a token (or a slice of a token) and you get a sense of how much value you are contributing back to the organization.

Actually, maybe it is that exactly. The loyaly points aren't necessarily for the user (though that definitely has an interesting angle to it), the crypto-loyalty tokens are actually true measures that the BUYER of the SaaS platform can understand as to where the technology is truly valued and utilized and where it isn't.

Instead of things like: "Time on site" or "clicks," you actually get immutable proof that certain people did certain actions at certain times and you know the outcomes of those actions...which tells you really where the value is for your organization.

I will have to come back to it after I think about it a bit more, but the idea that a SaaS provider wants to always demonstrate the platform value to its client and a client wants to know that, in fact, the value she is buying IS the value she is getting is an issue.

I can tell that this idea isn't fully flushed out yet, but there's something there.

Blockchain-based HR Systems?

September 8, 2016 View Comments

The world of blockchains is more than just a technological innovation. That part is undoubtedly critical as we will see entire industries such as internal audit go away.

The truly exciting part, as many people including William Mougayar, have noted is the business model innovation we will see.

Things we can’t even yet imagine.

The beginnings of these in the form of crowdfunding (Sia, Storj), debt issuance (Bitfinex), the DAO (big failure, but big lessons) and micro-tipping (Steem), are already taking shape.

What about enterprises?

Some will get disrupted and disappear…like the oft quoted statistic that 50% of the Fortune 500 from the year 2000 don’t exist anymore.

But others will adapt.

A recent WSJ article about Kimberly Clark heralded a new era of individual accountability where “people can no longer hide.”

And if you have read the phenomenal book, “The Originals” by Adam Grant, you are familiar with the “radical transparency” of Bridgewater Capital.

So…what if you had a crypto-token system where employees could (or must) spend all of their tokens by awarding them to others in their org whose contributions they value?

Let’s say you have worked on a big project with a large, distributed team and you are really impressed with a few key players as teammates.

Sure, you COULD write an email to their boss saying “so and so is great,” but come review time, that gets lost.

Now, on the other hand…let’s say you could send an amount of crypto-tokens (part of your annual budget of tokens) to that person’s account.

Then, at the end of the year, a manager could essentially have a “value ranking” of employees by how many tokens there are in that employees account.

Heck, every employee would know in real-time how valued they are as a teammate AND where they rank in their team, department, and company-wide. 

This type of feedback could be used to spur better collaboration, weed out the weak performers, and more.

It’s probably not sufficient alone, but it gives a quantifiable way to assess the relative value of employees as viewed by their peers.

More to come on this…