In an exciting turn of events, will be partnering with PayX, a collaboration that shall bring favorable high-yielding outputs for both companies. The MOU terms which have commenced from 28–03–2018 declare both companies as official partners, an information allowed to be listed on their respective websites.
QuickX Software Consultancy and Solutions Private Limited is a private consultancy based in Noida, India. Their novel protocol QuickX is designed specifically to cure the many fatal flaws that plague Blockchain and Cryptocurrencies today. It performs transactions off the chain for same Blockchain Through this, it accelerates the transaction speed greatly, dissolves the interoperability problem between different Cryptocurrencies, relieves the transaction fees and also solves the issue of scalability.
PayX is an independent and objective global Market Analyst & Consulting firm based in Korea. A trusted advisor to many of the world’s leading payment businesses they have utilized their our acumen and expertise to successfully aid many.
and PayX will be promoting each other in Korea and India along with providing other allied services to the partner. This will be facilitated through promotional drives, campaigns, conferences, events and meetings among other ways.
Both companies will offer each other allied services for mutual benefits. PAYX Wallet will provide Wallet address to contain QCX for PAYX Payment network and vice versa. QuickX will generate a special Master Code for PayX for which users from its region shall register or be linked to including its affiliates around the world. It shall later dutifully remit all benefits accruing to PayX related to activities of users from its region or those that operate with its master code.
PayX shall utilize online and offline innovations and channels of existing digital currency groups to promote the platform and encourage individuals and corporations to invest in the platform. It shall also create incentives, where necessary, for individuals with strong crypto-network in order to encourage them to drive an increase in user investment on QuickX from its region.
As is evident, both consultancies, QuickX and PayX will work jointly to promote the sale of QuickX and PayX Digital Currency effectively in Korea and in India. For this will be designing and various promotional strategies in respective regions.
Needless to say, this confluence of energies, ideas and resources will certainly boom the outputs and carve new successes for both companies.
was originally published in on Medium, where people are continuing the conversation by highlighting and responding to this story.
Управление по контролю за иностранными активами (OFAC) объявило, что может добавить к своим черным спискам крипто-адреса, которые зарегистрированы на отдельные лица и группы, с которыми американские компании и граждане не могут заниматься бизнесом.
Понятно, что криптовалюты могут использоваться в незаконных целях, таких как отмывание денег и уклонение от уплаты налогов. Тем более, ведь преступное сообщество быстро учится и постоянно расширятся, особенно в этой сфере. Достаточно справедливо, что власти пытаются этому помешать. В конце концов, это их работа.
Теперь в OFAC объявили о своей новой идее: добавить крипто-адреса в список организаций, с которыми гражданам США не разрешается заниматься бизнесом. Это хорошо в теории. На практике это открывает шкатулку пандоры и затрагивает миллион вопросов.
Что произойдет, если вы вдруг получите средства от адресата в списке? Отправка небольших количеств валюты на множество обычных адресов была бы отличным способом для преступников маскировать реальные транзакции своим партнерам. Что делать, если средства с отмеченного счета вернутся в общий оборот? В какой момент они считаются «чистыми»? Что делать, если преступники станут умнее и начнут использовать разовые адреса для своих транзакций (как рекомендует Сатоши)? Что относительно узлов, которые распространяют преступную сделку? Кто будет следить за черным списком?
Это далеко не все. И всем понятно, что дьявол кроется в деталях, и это все непросто будет реализовать. Поживем, увидим.
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This interview is a little bit different than those we’ve done in the past. Usually, I talk with interesting companies about all kinds of cool things — AI, Blockchain, Neural Networking, so on and so forth. For this podcast, I turned internal, to Outsell Inc. and interviewed one of our analysts—Will Jan.
Will is a VP and lead analyst here at Outsell. He covers Outsell’s research program in the credit, financial, governance, risk & compliance (GRC), and tax & accounting segments. His includes competitive analysis, innovations (fintech, insurtech, regtech, and risktech), and disruptions in these areas to aid in opportunity-discovery. Will also leads Outsell’s coverage in blockchain, where he collaborates with the analyst team to uncover segment-specific opportunities. He provides guidance to vendors, and their investors and users, by bridging the supply-and-demand gap —how best to enhance information, data, and technology adoption. His guidance is amazing. He has supported a huge number of our clients, and what he’s writing about has been fascinating.
In this discussion, Will and I spend a significant amount of time discussing blockchain and how companies, large and small, are handling the adoption. We also dive into the key topics and trends that he’s noticing: what are the top startups on his radar, which large companies are handling blockchain successfully, and much much more.
So, without further ado, the man that has Chinese buffets as his power meal, and is a proud owner of the Star Wars Hexology … Will Jan.
Can you give people a little bit of your background? What do you do here at Outsell? What do you cover?
Will: Sure. I cover areas of credit and financial information. For those who know Outsell a bit, we’ve really migrated beyond traditional information and publishing sectors. As we look further into the areas I cover, financial technology or FinTech, regulatory technology or reg tech and risk technology, risk tech, are the key terms that people in the industries are hearing right now. Highly disruptive, but mainly these are all information and technology providers, including workflow technology providers, that add value to a lot of companies today. Those are the areas that I cover.
How did you get into that world? What point in your life did you say “this is the stuff that I want to be a part of”?
Will: Well, I was actually an engineer for the longest time. That’s my academic background. I was a user of technology, a lot of software for designs and air vehicles and so forth, and since then I decided that, it fascinated me. The aspects of technology and how it evolves, so I became an analyst, covering aspects of technology.
As you know, technology is quite broad and I had actually picked a discipline. For me, finances always drew me and whether it’s areas of retail investments, online trading, those are all things I pay close attention to. A natural evolution of things, I found myself doing a lot of research around technologies that facilitate these transactions. Information that allows a lot of financial professionals to be good at what they do, and that’s how I landed here.
I think what also drove the interest in the space was really the involvements of players, that you would not expect to participate in this industry at trivia. For the longest time, you had players like S & P, Thomson Reuters, and Bloomberg. Those guys are the ones that provided a lot of financial research tools in this particular field. Now you have new players coming up from Silicon Valley startups and from New York that are participating in the space, whose DNA is not in financial services. For example IBM, with their Watson, AI platform. They’re making headlines, head ways into areas of financial services simply because they have a technology that enables learning, adoption of regulations and rules regardless of any vertical.
I think that really drew me in, knowing that there is a lot of technology players that simply are born to do many things. Blockchain for example, is a key ingredient and tomorrow’s businesses and E-commerce. That’s not just something that’s stem out of financial services, but it’s applicable throughout all other industries. We’re just seeing the glimpse of how it’s going to really roll out in financial services. All these things drew me into this area.
I was just talking to somebody related to blockchain and we were talking about how the world has seen blockchain through the lens of cryptocurrency. That’s fine but they’re missing how all the other use cases through numerous industries and numerous other practice areas of how you can use blockchain.
Will, what interests you now? What’s really top of mind for you?
Will: I think the gap between how technology is being publicized in the business world, to where it’s actually going to be widely adopted by consumers. Let’s go to blockchain being a key example. To your point, people hear the buzz about bitcoin, cryptocurrencies and to be honest, the reason why they’re attracted to it is because of its amazing valuation in a marketplace. They feel like they’re literally missing out in life. If they haven’t invested or if they don’t invest soon, without really knowing a lot about it. Now that’s dangerous in any type of investment.
They have FOMO (fear of missing out) and it’s gambling.
Will: Absolutely, and I believe there’s a lot to be done by a lot of players within this ecosystem, that can help educate consumers on exactly what that is. Number one, think of cryptocurrency as just as a way of paying for something. What a lot of people don’t know, is that beyond just speed, accuracy or instant settlements, the idea of a cryptocurrency is low transactional cost.
Draw that line to something that applies every day that people can understand. When you wire something from a bank, it’s usually pretty expensive, relatively. When you use some like an electronic check an ICH, cost goes lower but takes a few days to clear. Same with PayPal, or TransferWise or Venmo, those are all just various formats of transferring electronic funds using the money we have today.
Now, cryptocurrency, we’re talking literally zero cost transaction, or very minimal. Now ask yourself this: who should be the one to drive adoption to really make sense out of it, make consumers want to adopt, and just change that particular industry forever? I’d say someone like Amazon, simple as that. Imagine you go buy something and you have the option of paying with your credit card, paying with PayPal, and then you have bitcoin. Now what if I say that anytime you select to pay with bitcoin, it’s automatically 4% cheaper on everything you buy, beyond just Amazon prices. A lot of people are going to leap to it, they’re going to find out what that’s all about. They’re going to want to sign up. Instantly you have a significant amount of global participation in cryptocurrency.
Then when that happens, that will ripple through an entire community of cryptocurrency users. Not just those who are in the know, but those folks who are just participating in E-commerce. I think that’s where it is, that’s where the adoptions going to be, and that’s how flipping gears to blockchain, or the protocol behind cryptocurrency is going to occur. That’s how it’s going to be adopted. Otherwise, it stays as a large scale program for a lot of companies, and industries.
The internet was the worldwide web of information, the blockchain is the worldwide web of value.
To your point about adoption, how close do you think we are getting to mass adoption? Not just of cryptocurrency, but just of blockchain with an Amazon-like model.
Will: I think you’ll see the maturity model, a shift from a financial services to being more mature, where it actually all started, through to the areas of entertainment, education or even advertising. That’s simply because of use cases. Now I want to focus on use cases over the actual industry application, because if you look at payment, well that’s used across multiple industries. That’s one use case of blockchain. What people should know is that it’s really about a new way of tying ownership with value. That’s essentially what it is. People have heard that it’s the next Internet. Well guess what? The internet was the worldwide web of information, the blockchain is the worldwide web of value. Essentially, it’s the way at which anyone, royalty distributions for artists, payments for goods or services sold online, and any other aspect that ties ownership to a deed, to a house, or a title to a car. Imagine being able to pay for that and instantly settle where the transfer is unmistakably clear, who the new owner is. Whether or not you make the last payment on your car, that title automatically transfers to your name, automatically, with no mistake. There’s no need for a closing attorney for real estate, because there is no need for title checks. Everything is factual, everything is qualified and everything is instant.
Imagine going from 30% E-commerce participation to a 100% overnight. What that would do to the economy.
The smart contract system is very appealing to me. I have a family friend dealing with a contract issue, where one party’s going, “My contract says this.” The other party saying, “My contract says the opposite.” They have no consistent contract, and now they have to take it to court, and it just gets really, really messy. Just the ability to have that in the blockchain system, where you don’t have those discrepancies is really appealing. Like you said, numerous use cases.
Back to the point of adoption, there’s a lot of startups that are obviously driving this technology forward, using this technology in different areas. Obviously the startups are going to drive some adoption, but do you think it’s going to take a large company like Amazon to really tip the scale? Do you think it’s going take that move for a large company to actually get people to go, okay this has become real?
Will: Well, so a point of clarification would be that in the realm of cryptocurrencies, I think it’ll take an E-commerce player to really tip that scale, whether it’s Alibaba in Asia, or Amazon here. Here’s a bit of fact, only about 30% of the world is on online shopping, participating in E-commerce. That’s because a lot of the regions in the world, particularly developing economies, have no credit system. They pay in cash and they don’t have credit cards to be able to actually participate actively online. With cryptocurrency, as long as they have a computer to actually serve what they’re looking for online, they can actually pay with cryptocurrency.
Imagine going from 30% E-commerce participation to a 100% overnight. What that would do to the economy. I think that’s one area awareness could be brought and that’s why I outline Amazon and Alibaba, as key players.
For the business side, where a lot of startups actually do add value, the interesting part is if they’re doing their job right, their customers, or the consumers if it’s a B to C company, will never know that it happened. All it is, is a streamlining of the actual process, whether it’s to purchase through their online store, whether it is like you said, a smart contract closing off. Automatically the fund is being transferred into the account for sale of something or services rendered. Unlike the internet, which is very clear to both businesses and consumers. The value that they deliver, they can actually see, they can actually conduct business on it.
We’ve seen production lines automate back when Henry Ford was cranking out the first model T
Blockchain works behind the scenes. Now where the consumer is going to feel the hit, and I say hit because it’s a change, is in the workforce. Blockchain will and it is designed to and I’ll say it, eliminate a lot of jobs that are currently tailored to do settlements today. Your traditional person who is scanning invoices, processing checks, and executing a lot of electronic transfers. I’ll say real estate attorneys, but I’m sure they’re smart enough to transfer their expertise to some other fields. All those things are going change simply because there is no longer a necessity for these roles. All those people will have to re-channel their talent and efforts elsewhere, where blockchain is not taking over. I think that’s a harsh reality that a lot of people are not talking about. Clearly the startups in a business of blockchain are a debt, that’s their lifeblood. They’re not going to be advocating that particular change, but Ben quite frankly, that is the natural course of the workforce evolution. We’ve seen production lines automate back when Henry Ford was cranking out the first model T, to where things are right now. It’s exciting, it’s exciting times.
Repeat history almost. I think about it as all these third parties that we’ve developed, are being removed because of blockchain. I was in Santa Clara for a blockchain conference and they were discussing how as blockchain becomes more and more widely adopted, AI becomes more and more scalable because the data is no longer as siloed. The data is the fuel for AI, so at the same time as blockchain advancing and developing and becoming more widely adopted, AI is also advancing. Both of those playing a role in how the job market is going to react. As we see this change, where do you think people will initially go? Like if you’re a lawyer, where do you think those folks will turn to out the gate at first?
Will: It’s interesting, I think it’s already starting in academia. You have a lot of universities that are basically teaching blockchain courses. I think you’ll see that permeate through a lot of the way the curriculum is structured, around how to prepare for a blockchain future. That’s where I think a lot of things are going to start. What I also think is interesting is a lot of companies who clearly are going to realign their focus, and their business models are essentially buying time. When I interview a lot of professional services providers, whose bread and butter is to implement traditional software, cloud applications, asking about how blogging has been changed the way that they deal with clients. If the stuff that they’re actually implementing is no longer going to be relevant, they’re watching the clock, they’re trying to figure that out themselves.
We’re going to monetize that gap and we’re going to worry about blockchain when we’re close to the end of that gap. A company that is doing very well at monetizing that gap between today and blockchain future is DTCC. That’s a thing of beauty because you essentially eliminated a time by nearly 70%. They’re doing that, there’s companies who value that, because when you can close things quick, get paid quick, your transactional volumes could spike up. People that are getting paid by transactions, like the brokers and dealers, they’re commissioned dollars scales up. Volume at rates, goes up that affects the overall market. Those are all things that I think folks should realize is that you don’t just drop everything, and try to spend your time figuring out what to do during this gap.
I say to those companies, be careful because your customers are not going to probably be ready to adopt.
Monetize this gap, do something that’s adding value towards an ultimate blockchain future. There’s companies that are going to do what I call a step function reaction, which is that we’re going to keep doing what we’re doing until we’re absolutely irrelevant. We’re developing a concurrent blockchain strategy, and we’re just going to flip the switch on. Like the night before, and then we’re also going to be a blockchain enabled company. I say to those companies, be careful because your customers are not going to probably be ready to adopt. You might have some Beta test customers, but it’s got to be more of a gradual evolution. I think this really paves a way for a lot of consultancies into the space. Even folks like Accenture, they’re doubling up their innovation team to really get educated on blockchain, so that they can help their current install base deal with this change.
Yeah, I think companies should definitely start sooner rather than later. I think part of the issue too though, is that the technology is pretty new and finding blockchain enabled developers that know how to work with the technology, and build on the technology as you can imagine are really difficult to find. There’s a talent gap right now as well. There’s a huge opportunity for developers to jump into a really accelerated profession. I’m interested to see how many folks go down that route.
If I’m a company, am I behind if I’m just starting to think about this? Am I behind the curve if I’m a company that’s just going, maybe we should start looking into blockchain?
Will: Not at all. I think it’s like learning how to ride a bike to where you have to just start from the beginning yourself, and figure out how it’s actually run. I say companies are starting now, learn from others mistakes, and learn from others success. Capitalize on stuff that’s already out there. We published a lot of research on blockchain and in a certain way, companies that are initiating blockchain projects or equally excited to share what they’ve done, case in point Dun & Bradstreet. This is nearly 180 year old company and jumped in with both feet with blockchain. Now they’ve dedicated a blockchain website that shows exactly what they are doing with it. Some say well, “Aren’t you advertising to your direct competitors what you’re doing, and helping them step up.” They share enough to be dangerous but at the same time, they’re cornering the market effectively with their line of business and what they’re doing with blockchain, so you’ll see a lot of standards being put in place.
My biggest fear is where regulators are in all of this. We consistently see them trail behind in aspects like data latency for example. When financial traders get information quicker than someone else who isn’t a paying customer debt, that’s considered unfair and quite frankly illegal. Then we shift through the years to the area of a blockchain, and you’ll realize that yet there are some unfair advantages that are happening. Folks who are capitalizing on the ignorance of others for example or even alternative investment firms, looking at loopholes to be able to trade certain type of blockchain technologies.
This is really unfortunate because in an ideal world, regulators needs to be right in sync with innovation. In this case, they just simply constantly trail behind, simply because they needed time to conduct a new diligence. To watch the potential benefits versus adverse effects for the community. All those have to be taken carefully. Then there’s a traditional red tape of how long does it take for this legislation to actually roll out. By then usually there’s a lot of unfair business practices that’s already resulted because of that. This is not just blockchain, this is literally a lot of new technology that’s being introduced to the marketplace in general.
We’re going to see more of that evolve from regulatory side, and that’s one area where, as a company who’s just starting off looking at blockchain right now, I’d be cognizant of.
Would you say regulation is moving slower, because the technology is so advanced? You mentioned that the due diligence period takes a significant amount of time for the regulators to fully understand the different practices, how companies are using the technology, how the individuals are, etc. Do you think that’s why it’s taking so long to get regulation in place?
Will: I’m biased but I will speak for the point of experience. I used to work for a defense contractor with security clearance and all this other stuff. I’ve seen a lot of technology being developed that are not yet utilized in a consumer areas. I will say that when it comes to government due diligence, on stuff that privatized contractors are doing, there is a gap. There is a gap in talent, domain expertise and I’ll say that even in the actual corporate finance realm, where the tax auditors sometimes aren’t as equipped as some of the technology developers for tax software. For example, let me ask you this. State of California or even a state of Massachusetts, when it comes to their IT infrastructure or even a data security, do you think they can afford to hire the best from Silicon Valley, or New York, or even here at Kendall at MIT? My guess is probably not. Given their resources, they’re going to hire someone who’s good, who needs to know their stuff to do their job, but guess what? These FinTech and Regtech guys are hiring best. They’re paying great salaries, and they’re going to have cutting-edge technology. That’s probably going to take some time for everyone else to catch up on. I think folks are not ready to admit that, but I just I see it as data points, that this is a reason for the lack. If someone from Silicon Valley came with a blockchain application day one, and the government understands exactly what it is on day two, that would be great. That would be great but usually it takes some time.
I see that as a show of innovation, as commitment by government to really revamp and take its economy to the next generation, more so than reality.
Back to companies innovating using blockchain. We mentioned the Dun & Bradstreet example. Are we seeing Dun & Bradstreet and other companies acquire these companies as well? Or are they primarily at this point trying to do it in-house?
Will: I think it’s a combination of both, because the way blockchain is structured, it’s not always open. There’s a misnomer of people thinking that it’s always open blockchain when there’s actually closed blockchain that are responsible for a specific transaction type. As a result, banks themselves who want to transact in blockchain maintain the identity of their customers for example, in tying that to fund transactions. That needs to be done internally, they can hire someone to help them develop that, but there’s a need for a lot of companies to actually do that internally, with their own data and customer transactions.
Now that said, consortiums are being formed. You’d have over 70 global banks who have already formed a consortium called the R3, to literally help them all keep their hands on a life switch if you will, the blockchain switch. They can all flip it on at the same time, because blockchain only works if all parties within a particular transaction, are ready to conduct business.
If you are a merchant accepting blockchain and your customers are using cryptocurrencies, that transaction is not going to happen. We hear of China experimenting with the world’s first blockchain or cryptocurrency, as a national currency. What people don’t think about is that first of all, the number of people who are actually online in the country, on their mobile devices, and are capable of actually having a bitcoin wallet or something similar, needs to be significant. For that to happen, for national currency to happen, a huge gap needs to be closed between where the consumers are technology-wise, versus how the crypto currency can be adopted. If anything, I see that as a show of innovation, as commitment by government to really revamp and take its economy to the next generation, more so than reality.
Consortiums are a great place to be. It’s fostering the sharing of ideas, it gives you an idea where everyone is in that group, so that you can gauge yourself if you’re one of the early adopters, or if you’re late to the game. Most importantly, it ensures that it’s not just a technology phase, where it just comes in hot and just fades out. That all these banks are serious, are committed, they’re vested, therefore, it will happen.
Where blockchain is really advancing and where countries are identifying themselves as the early adopters, I see China, Japan, Singapore. The governments are moving very quickly. Are there countries that I’m missing that you’re seeing as well that are moving quickly with the technology?
Will: I think there are parts of the Western world, there are, but there is actually a very interesting phenomenon between some of the emerging markets. A lot of countries don’t have the credit system set up to enable participation in E-commerce. Well, if you look at those countries, they’ve skipped over the whole ACH, the credit card aspect of technology. They’ve skipped right to bitcoin. Right?
They’re just getting ATM set up in these countries.
Will: Right, right, you look at China which before the era of smartphones were at large, there is no land lines in a lot of the rural parts of China. They literally skip an actual copper wire telephone line era, right to smartphone which now enables them to go online, go to Alibaba and now use cryptocurrency. I think in a way, if you look at the Western world like the UK or the United States or Canada, we’re almost played or slowed down by all that the residual innovations that we’ve incurred throughout the years. A lot of companies are set in their way.
In China, if you’re just starting a company right now, you have the option of going right to global electronic payments or cryptocurrency. There is no need for paper checks, or anything like that. Two very different styles and I think given the ease of leveraging these innovations by a lot of companies starting today, it really lowers the playing ground globally. Whether you’re in China, Asia or even in the US.
It’s funny to watch because there was, I would say a couple years ago, many companies and individuals moving to Silicon Valley, or New York to start companies in the United States. I’m meeting companies now that are going the opposite direction. They’re moving to China, they’re moving to Singapore. It’s funny how it completely 180 flipped, and that they’re just moving around to the country that’s going to be best supportive of the technology that they’re working with, which is fascinating to see.
If I’m a startup company, and I’m operating in your space, what would you recommend I look out for? Maybe a part two of the question is, what can I do to be appealing to a larger company that’s looking to acquire technology?
Will: I certainly wouldn’t ignore that the top items that are hot on table right now, which is artificial intelligence and blockchain. I think those two aspects are certainly going to command expectations among investors, as well as larger companies looking to literally just acquire these abilities, as opposed to investing even more developing internally. A clear example, just a couple of weeks ago S&P Global announced their acquisition for kinship technologies. Just based out here in Cambridge Massachusetts for $550 million, compared to the deals that S&P has done with SNL financial acquisition for example, these are multi-billion dollar deals. Blackstone group buying out a majority stake of Thomson Reuters financial and risk. Again, multi-billion dollar deal, so $550 million seems like a drop in a bucket, for a technology that’ll revolutionize the way that financial data is being evaluated, collected and associated. These are all development tests we should be looking for. Best of breeds are going to be the ones that are going to get acquired. That’s just a logic.
Unfortunately that also means that some of these companies might not make it. Not those companies that I mentioned specifically, but the startups and the investors should have expectations.
Some advice: I think it is really just focus. Focus on how you’re going to actually turn these, I’m calling them commonplace technologies now, because we’ve heard them for at least a few years, into very specific applications that matter. My biggest recommendation is, watch for the regulatory angle, because if you look at the way that blockchain or even cryptocurrencies is being discussed in the marketplace, quite frankly it’s still a work in progress. It’s a promise of a great, a different future, but point is that it’s not. People aren’t just absolutely jumping on it overnight. There’s a reason for that because regulators aren’t requiring it. if you look at few years back, when the USSEC says all the public traded companies in the United States, needs to file their earnings every quarter via XBRL. XBRL is a very fancy electronic format where numbers are taxonomies and errors are minimized. We’re coming up on a personal taxes, just think of the regulators and IRS saying you have to file. There is no option to file anything, any other way. No Postal Service, nothing but electronically. Everyone’s going to do it.
That’s where the business is going to be. Startups need to focus on where the regulators are closer to implementing some type of a requirement that instantly translates to their future customers, these start ups future customers, from the position of nice to have to we’re going to go out of business if we don’t leverage this particular AI or blockchain enabled solution. That’s why I keep backing when you do it the regulator angle, because I think they’re going to be the key to adoption, mot only by businesses but to the startups that are enabling these type of technologies.
Related to acquisition, this question just popped into my head. With a lot of these blockchain companies, they’re filing as nonprofits, they’re .orgs. They’re raising funding through token generation events, or ICOs. Is there any funkiness around acquiring some of these companies when they’re set up that way, that you know of?
Will: I think in the area of cryptocurrency, the application of it, it’s really mature enough for a lot of even investors to take a look at. If you just go back to when Crowdfunding first came on, there’s were a lot of skeptics of how we evaluate someone who literally collects money, and deliver a service or product, as they’re developing without taking in VC funding for equity. That kind of model is now evolved to what you just described and I think it’s a matter of time before it’s acceptance and adoption, but it’s a perfectly viable model. Remember the important thing is really not how these aspects are being funded or modeled, is that they have the resources required to develop that technology, or that innovation. That’s what future companies and investors are looking at.
Is there a handful companies or even just one company that’s really top of mind on your radar?
Will: With the areas of financial services I think related to best of breed, it’s not just any technology startups. It’s really best of breed for specific business applications. I think in the area of large scale opportunities, Digital Asset Holdings, DAH, is probably my prime prediction for one that’s absolutely going to explode. Simply because they already have the market cornered in terms of blockchain enabled settlements in a financial markets. When that scales its not just US financial markets, but potentially globally. I think that’ll be the one that will literally chase the workforce in Wall Street forever. That will be the one to change the way that stocks are being traded by consumers, or even at an institutional level. That’ll be the one to make a headline in terms of valuation. They’re not in a position and I don’t think a company like DTCC is going to acquire them. They’re just in that unique situation to where they don’t need the money to sell. They can stay privatized for a good amount of time and they harness a level of technology, that is unparalleled by a lot of other competitors looking to do the settlement space. I think that’s probably the one company that I would look at.
Then there’s a series of other smaller emerging companies that do blockchain enabled identity services, like Stanberry and Ripple. I think those are all very promising, but I think you’re going to see that their value, and their perception gets diluted by the community as more participants come in.
There’s not a major company that, in my head we mentioned Dub & Bradstreet but there’s not a lot of major companies that have really set in stone that they are a blockchain company. I think it will be interesting to see which startup companies are able to get that brand awareness, where it’s consumer facing and people know of the company widely.
Will: Right and some of these founders just have to live with success without the name. For example, Solar Flare. I haven’t heard of these guys and they’ve been around for over a decade. When I briefed with them, it was almost like with the old computers when you have the Intel Inside, at least you have a little bit of credit going to Intel. Even if you’re buying a little Lenovo laptop or a Dell laptop. Truth is, that if you have a great idea and you get bought out, chances are you just went from a poorly marketed stage of your startup, to your name of your start will never serve us ever again, because you’ve been acquired. You’ve been assimilated to a larger company and your technology is known and appreciated and that’s it. In Solar Flare, literally is a company that is behind virtually all of Wall Street’s servers enabling zero latency transactions and then they’re happy doing that.
Being nearly a 180 year old company, it’s like a 40,000 ton tanker trying to steer.
I keep coming back to Dun & Bradstreet, and mindset around acquisition and developing new technologies. Would you say Dun & Bradstreet’s a good example of a large company that’s doing it right? Do you have another example of the company that’s doing a really good job adopting this kind of technology?
Will: I think in the area of blockchain, certainly Dun & Bradstreet made a statement. I also want to echo that being nearly a 180 year old company, it’s like a 40,000 ton tanker trying to steer. They got to start turning 10 miles out for it to make a difference.
Blockchain is just a very small piece of that puzzle. They’ve got to deal with how to actually monetize the data they have through partnerships, how they need a revamp their identifiers for businesses, given that the government’s are already pushing back on this a very old system. I for one, I’m tired of this social security number system that we all have to live with for decades. It’s not safe certainly with the Equifax breach. It affected all of us. Why can’t we all go on blockchain identifiers and just be done with it. Why bother offering your identity monitoring for a year, two, three, four, five. That doesn’t make any sense like putting a bandaid on a shotgun wound, right? Just give everyone a new identifier system that’s at least for today’s technology relatively hack proof.
I think that that’s just one area that that can be changed. Now, as opposed to the companies that are doing it well, I think IBM is a good example of someone who’s actually evolved well. A problem a lot of these tech players have in entering very specific industries is that they are not highly regulated and there’s no sense of trust. People find it hard to trust someone who might have the ability but never really demonstrates a track record.
We’re slowly seeing that change. We’re seeing that with their Watson AI platform, they are moving a needle with risk evaluations and financial services, and even with health care, with some hiccups. That one part I think makes a company like IBM resilient, and I think as a blue chip company, it will remain an innovator for a lot of years to come. What I think the opportunities are for a lot of other companies is the professional services firms, because they’re the ones that have to adopt to changes in businesses.
I think there’s always new opportunities for them to learn and add value. Those are kind of the companies I’m seeing. That’s when we capture a lot of value when it comes to startups. I say in blockchain, too soon to tell, except for Digital Asset Holdings which I think has a tremendous promise. Within AI, a lot of applications, tons. You have AppZen, who literally goes and combs the media about who you are as a person simply just to check to see if things that you file for expense reports at work are relevant. If you say that you were on a trip, you put in some expenses and your social media says you were actually on a cruise sipping on piña colada. Guess what? This is probably not a very legit expense that you just submitted. So, very specific applications, new technology requires you to be really the best of breed to survive.
You mentioned IBM and Watson pushing the needle in regards to getting adoption because people are risk adverse. There’s fear around adopting some of this technology. How has IBM been able to push that needle in your eyes? Is it because it’s IBM, they have the brand recognition that you should trust them. Is that what’s happening?
Will: Absolutely. Great question. I think it’s the ability to identify a need versus a want, and IBM has been good at understanding that a lot of hedge funds out there, financial institutions, remain competitive only when they have that extra ability to either predict something, to assess something, and to actually make a sense or value out of something. So this is why they got their foot in the door. With healthcare, it’s literally something that’s near and close to a lot of health care providers, is just what their consumers want. If you look at the ability of a typical oncologist to look at and recall and assess maybe 200 or 300 cases of cancer. Now compare that with the ability to identify those particular treatment patterns to results for that many cases versus 100 million across the world. What are the best chemotherapy patterns that yields the best success given your specific DNA in every permutation of chemotherapy patterns, to yield the most success. Would you want to use that?
When it comes to life and death situations, yes. If the patients demand it, the health care providers will demand it and technology will deliver. That’s really the evolution of I think a lot of these AI players.
I’m just going to reframe something that you’ve said and you’ve continuously said throughout the podcast is that “need to have” versus “nice to have”, and just passing that on to startups to focus on solutions that are need to have, that will help them garner the adoption they need to be successful, and to help the broader market unit gain adoption as well.
Will: Absolutely. Hey, the .com bubble bursts where every person who’s got a nice to have and it solves a want, those days are gone. Investors are a lot more keen at looking at the value of their investment and what they’re going to get in return, and the founders too for a lot of these startups. Realize that there’s a regulatory angle that we can try to hit the markets with, and create a technology to solve that compliance issue. Then there is a need, whether it’s a life-and-death need or a severe business need that’s going to drive competitive differentiation. Those are the use cases we’re going to go after first.
Do you have any final thoughts that you want to share with the audience? It can be guidance for startups that are going into your space, it could be guidance for large companies, or just things that you’re seeing.
Will: Well, it’s just a thought, a muse if you will. It’s don’t lose faith. I think that given the way that this year is already off to a rocky start in the financial markets, probably the most volatile it’s been since 2008, I think a lot of companies are preparing themselves for a bootstrap mode in terms of budgeting. A lot of startups are probably re-evaluating when they want to launch or how they want to get funded.
Truth is there’s still an awful lot of cash on the sidelines that are housed by investors and in that they’re still looking for that great opportunity. So as a startup, press on, because it’s during times like this that innovation really grows.
As far as technology focus, don’t try to boil the ocean. Pick a particular application, because blockchain and AI are very broad. Look for pain points, be the pain killer not the vitamin pill. Then you’ll certainly garner much attention by the investment community or even the public.
Thank you for reading this Analyst Q&A interview with Will Jan. This write-up is only a portion of the full interview. To hear the full interview, please listen to our podcast “Outsell for Startups”. It can be found on , and . You can also find more information on at our website. Thanks for reading!
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