How Blockchain will change the world
10 min read
10 min read
Any sufficiently advanced technology is indistinguishable from magic. – Arthur C. Clarke
2. The fashion store which is a technology Start-up
3. The winners and losers of the dissolving financial industry
4. Blockchain solutions can become a game changer for SMB’s
5. Freedom and equal opportunities for SMB’s – the world of XaaS
6. Creating standards for XaaS – Services
7. The Aryxe Blockchain-based platform for XaaS-Services
Some time ago, when I was working for a large IT company I remember some of my first managers as exceptional. I would like to mention the most important ones here. The first one, a gentleman with Asian roots, inspired me with his passion. He also taught me to channel my energy in a more efficient way and, above all, he was simply a guy I wanted to learn from, because, after all, it felt like it might be a very good idea to learn from him. And I think I did. The second person was a senior person with decades of experience in executive positions. I used to cold-call the senior management of prospective clients in order to get a meeting, something I later realized most people, even the most experienced sales people are terribly afraid of. I never gave up, even if I had to call a person once a week for a whole year so after some time I ended up with all those meetings for my manager. Very often he let me tag along, either because he thought it’s good for me to learn or he simply wanted a sidekick for all the business details after all the real reason also does not matter much. I loved every moment of it as it gave me the opportunity to learn first-hand from a very experienced manager. In particular I admired his relaxed nature – in tricky and complex situations. The third guy was a French manager who ended up in Geneva for somehow mysterious reasons. I liked his way of combining a polished yet personal charme with energy and punch to the point of being harsh when it felt appropriate. As I liked to favor, at times, a bulldozer-style approach I alienated more than once other managers when I thought they were slow or simply not up to their job, strategically speaking; or more interested in playing their little political games. Needless to say this brought me in difficult situations a few times but I never forget how I marveled at his superior skills of influencing others to bail me out. Obviously I was also thankful.
There were also others. I recall a particularly uninspiring 1-1 with a former French manager. We talked about the advantages and disadvantages of working in a large corporate company vs. founding a start-up. He joined, at some point in his career, an already large company in the UK (I remember it as a midsize ISP) and he explained to me that the main reason why he preferred to work for a large multinational over a Start-Up was the chaotic style of work in the latter, combined with a lack of organizational structure. Now, after having joined a Swiss start-up as a senior manager and co-founded my own I realize that although he was correct about the initial phase of any new company, for me he seemed to have missed to grasp the main point – creating a start-up company is starting with nothing except a big idea in your mind. There is no equipment, no employees, no substantial resources of any kind and, maybe most important, no processes. And maybe most important, there are no customers. There is, literally, nothing of substance apart yourself and your co-founders to work with.
We have spent the first year in the existence of our company working on the business plan, talking to potential customers, creating marketing material, evaluating locations and fostering relations with partners. The second year was all about onboarding the first customers, hiring staff, kitting out offices and getting things into motion. We also experienced many difficult situations, mainly due to the absence of processes and the lack of manpower. In the third year we were working on our processes – in sales, in hiring, in internal organizations and many other things. Now, as we are entering the fourth year of our journey we are professionalizing Sales and Marketing, we have started to launch campaigns and we continue to work on a handful of flagship projects. What brings us now daily excitement is realizing that “things start to work” – our pipeline grows month by month, we are onboarding customers at a much faster rate and, as hyper-growth becomes slowly more and more realistic, and there is this sense of urgency, this sense of getting traction and making an impact. It is this feeling what we were looking for a couple of years ago. So, in retrospect, this particular ex-manager of me didn’t seem to understand the point of creating a start-up, or he was interested or not capable of investing the personal resources both intellectually or financially. Of course there is initial chaos and disorder, of course there are no processes and of course there is – occasional – mayhem. Having a vision, developing a long-term strategy, hiring the right team and implementing efficient processes is what creating a start-up is all about. For those who prefer to work in a more pillowy atmosphere where most of the work has actually already been done I understand the pain and disillusion when joining a start-up in the hope to ride a wave calmly. There is no such thing as to ride a wave calmly.
Blockchain will change the way we live
When I started to investigate crypto technologies and in particular Blockchain my knowledge was basic to the point of having not much of a clue what this was all about. I was even feeling slightly hostile to the idea of looking deeper into the possibility of trading with Bitcoin, Ether and the like. Then, as my knowledge increased and I started to see the immense potential of Blockchain as a potentially game-changing technology, I discovered an interesting pattern: most of the comments and opinions regarding the Blockchain and in particular its most prominent implementation – crypto currencies – seemed to originate from the Finance industry and Governmental institutions (more about this later on) as well as from individuals who didn’t inform themselves too much about the underlying technology, the “fabric”. As in the early days of the Internet everybody seems to have a strong opinion about something few really understand.
The Blockchain technology is a way to process, execute, monitor, verify and document complex transactions between two partners. The technology is secure by design and focuses on data integrity as well as enabling keeping track of past events. Future uses are going to incorporate healthcare, finance (such as mortgage or money transfer systems with fewer or no banks involved) as well as Government (voting systems). Blockchain technology will eventually make everyday life simpler, very much as the Internet already did. It will also eventually make traditionally opaque industries and processes more transparent.
On bubbles and investments
So why is there so much negative publicity about Blockchain? About crypto-currencies being simply a speculative tool, a bubble, which would eventually burst?
In 1991, shortly after the fall of the Berlin wall and the re-unification of Germany, the “Berlin Brandenburg Flughafen Holding GmbH” was founded and planning went on for 15 years. In 2006 construction started and the planned year of completion was set for 2011. The initial budget was Eur 2.83 billion. In 2012 the expenditures totaled EUR 4.3 billion and 5 years later it was already EUR 5.4 billions. The current estimate is set at EUR 6.9 billion but as the opening date has been moved several times and there are severe planning and quality issues (safety systems, transportation, logistics etc.) it seems more than likely that after asking for additional funding (a new total of EUR 9.4 billions till 2030). Newer sources are already talking of 15 to 20 billions – slowly approaching ten times the originally communicated cost.
Governments across the world, mostly in the western world, have created social welfare and pension systems which are based – very much like a Ponzi scheme – on an ever expanding economy and steadily rising incomes. This means an ever-increasing appetite to raise taxes, devaluing the currencies and piling up new debt. Among the largest destructive forces of the 20th century, Germany for example, ranks very high, having defaulted three times and wiping out hundreds of billions in the aftermath. Whether you are looking at the world finance crisis in the 1930’s, the oil-crisis in the 1970’s, the collapse of the stock market in 1987 or the burst of the .com bubble 2001-2002 (which, for example wiped out 86% of Cisco’s value) man-made investment bubbles and crises have always occurred when greed met the ignorance of the mass-market. In recent years the property prices in many countries (e.g. in the UK and in Germany) have soared and are now creating yet another bubble which will eventually burst. So why would the crypto-market be different? A few months ago I attended a Crypto-event and after the presentation I had a chat with the lecturer, a French ex-investment banker who turned into a crypto-specialist. “Is it a bubble” asked a nerdy guy with black Towa-Tei-style glasses. “Of course it is” said the French guy calmly. Of course it is a bubble, and of course everybody wants to know when it would eventually burst. And as usual, nobody will know until it happens. So just because the .com-bubble happened would you refrain from booking flights on the web? Or would you stop using email? Probably not.
In that regard it seems interesting to note that the people who criticize start-up companies the most have actually never founded one and the very industries and Governmental bodies who are responsible for the largest investment bubbles and failures in human history accuse the crypto-industry of being a bubble. It is clear to see why banks in particular are no big fans of the Blockchain, as its various implementations and usages are going to be endangering the bread-and-butter business of the financial industry such as the mortgage business, money transfers and investment banking, simply because a new wave of technology companies developing faster, better and cheaper financial solutions is going to emerge. For governmental institutions, Blockchain implementations such as crypto-currency based money transfer system threaten to weaken their grip on the financial system.
I am not going to challenge the need for governmental, or even supra-national regulations. As in the early days of the Internet there is lots of good and plenty of bad stuff happening in crypto. Regulation – not over-regulation – will make Blockchain-based products and services safer to use for everybody. Many, fast-forward-thinking governments like the one of Estonia, innovative research organizations and universities such as the MIT and some financial institutions are already using blockchain technology to run parts of their internal systems.
In the next article we will take a closer look at technology companies who have changed everything from fashion to travel.
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