The Blockchain Six: Part 1
The partially state funded Oregon Enterprise Blockchain Venture Studio is approaching the completion of its first cycle.
Six startups were selected for their original ideas about how to make the most of blockchain technology (a kind of super-secure database in which no one has to trust each other because everyone can see what is going on). Hosted by R/GA Ventures, an arm of the global digital ad agency, the 12-week stint for those six will end on Oct. 8 on the OEBVS Demo Day when they present their work at Portland State University. The Business Tribune talked to the leaders of all six companies recently and asked them the same three questions:
Here are the responses of the first three companies, Brave, Concord, and Qiibee.
Dylan Boyd is the director of new programs development at R/GA Ventures. He calls R/GA "a global innovation consulting business transformation design agency." It started with making ads in the 1970s, especially movie effects that looked like scratches on the emulsion of film, but now it has tentacles around the world. They jump on hot technology. The original nine-year cycle, of trying new things and exhausting them in nine years, is now about three years because of the speed of technological change.
Boyd explained that in an incubator, the startups are small in the early stages, while in an accelerator they have a business and are much farther along, and in a studio, they are pushing them to the next level of growth, scaling them and adding clients.
"This studio focuses on companies that have a product and know what markets to enter and how to enter it and how to price it successfully," Boyd said. "But then you're looking at how do you go from a growth-stage company to accelerate revenue and accelerate customers? That's really where we shine.
"R/GA comes up with new B2B ideas for large banks and works with companies like Nike on figuring out systematic approaches to how they think about membership and how they roll out campaign work," Boyd said. "We work on how their physical retail stores and now digital maintain a deeper relationship than physical at points in time, and how those systems all work together.
"Our idea is to look at the 150 plus brands we work with across the world," he said. "We figure out where the revenue opportunities are with them and what their needs are. And then, look for the companies that help deliver on those needs. We invest in and partner with them."
Luke Mulks, director of business development, and Donny Dvorin, head of sales at Brave Software, explained that Brave is so-called because it's a brave thing to try and break up the entrenched, profitable world of online advertising.
Brave asks that people switch to the Brave browser to block unwanted ads. Then, only ads from trusted sources are allowed. In return, the user generates a token (a cryptocurrency, created by blockchain) which it can spend by sending to advertisers.
"We have the first global private ad platform," Mulks said. "It's a different type of internet experience for users that includes them and rewards them for their attention."
He says web users have been exploited too long for their data on insecure websites.
The Brave plan is that instead of being tracked and shown irrelevant ads, now people can feel valued and rewarded for being online.
"People browse the web, they view ads, they get 70% of the revenue from those ads, and in the form of our token, the Basic Attention Token. These ERC 20 tokens are generated on the blockchain Ethereum. They accumulate them like frequent flyer miles, and they can contribute those tokens to the content creators automatically," Dvorin said. "They can also do it by tipping in the browser, like Patreon, the system for rewarding small artists. They can also convert them to other crypto assets or fiat currency."
Publishers are willing to try anything right now to claw back revenue lost to Google and Facebook. The Washington Post is one of the publishers that verified with Brave.
"They signed up to basically collect tokens, so when users contribute, they can sign up, and then we get those tokens that people contribute. If I'm on the Washington Post.com, at the end of the month, it pays out to those sites that you visit, or you can tip directly in the browser."
Soon people can redeem their Basic Attention Token (BAT) for gift cards or donate to a charity.
The ad platform has been on the market since the end of April, on desktop, on Android from mid-July with IOS due late October.
Brave's executives hope to get help with their messaging from R/GA, because the latter understands complex technology and consumer culture.
"Putting our heads together with people in this incubator and with R/GA is helping us to hone in and refine the value in the message that we deliver to the public."
Dash Lavine (CEO) and Paul Lawbaugh (CTO) of Concord are old tech hands in Portland, with connections back to Webtrends and Oracle.
"We've been in analytics and big data for a lot of years. We were basically helping large companies grab as much data about people as they could without people knowing," Lavine said. "That didn't quite sit correctly with all of us over the years."
He wrote a brief in 2015 around solving that problem, codenamed Control.
"The goal was to basically create a way for people to actually have more control, ownership and more transparency around data use. Also, to benefit the brands that they choose to work with and make it easier for brands to get better data that actually benefits them," Lavine said. "It would also give the right level of control transparency and ownership to people to really solving this data crisis that gave us Cambridge Analytica, and the data breaches you seeing on both sides, this mistrust of the system."
"There's a lot of junk data out there — 50%, said Lawbaugh. "If people are forced to enter something, they offer bad data. And, because people aren't involved in the scenario where data is being collected, and they're not validating any of this, there's no real consent today. Businesses behave like stalkers to get data."
An important development is the California consumer Privacy Act, which goes into effect Jan. 1, that is very similar to Europe's GDPR. (The General Data Protection Regulation 2016/679 is a regulation in EU law on data protection and privacy.)
"And now, U.S. companies have to start worrying about some key requirements such as, if a user asks you to see a copy of their data, you have to give them a copy of all of the data. And that's all of your data that you have across multiple disparate systems. Usually, if you're a large brand, you're probably working with 50 to 100 different data vendors."
A year after GDPR there was significantly less traffic across all sites in Europe: more than 9% of visits went down and commerce dollars spent were down 8%.
However, it's hard to comply. The Concord solution is a data vault for users, where they control what data the corporations see on a need-to-know basis. The benefits to the user could be better personalization on a site, custom emails, the customized content, and some reward like coupons, or cash flow points.
"The idea is that your vault has all your data, it knows what gender you are and what political affiliation, but you don't necessarily want to share all that with everybody and their partners as well," Lawbaugh said. "We come in with brands to help the brands adapt to this world where they can still ask for those questions."
Lavine and Lawbaugh like the R/GA accelerator programs.
"We have a lot of tech underneath the hood and what R/GA provides is a mechanism for companies to engage with some very progressive brands that are willing to use new and interesting and progressive technology."
Companies don't have to be based in Oregon to be in the studio. Qiibee is based in Switzerland. Gabriele Giancola, the CEO, has been flying back and forth to meet with R/GA, who not only provide technological help but introduce him to potential American customers.
"Our vision is to connect the loyalty market, where you earn some points, or miles, some stamps or vouchers, whatever it is, most of the time, you don't remember about them or they are useless because you don't have enough points to actually get something," Giancola said. "And, it's not that cheap to have a loyalty program, running."
Just making sure you can pay for Amazon shopping with your American Express points is expensive to pull off — for both companies. At the smaller company level, say a chain of 100 restaurants, it's far harder. However, blockchain is great for creating currencies and easily allows awards points to be exchanged. Qiibee had a deal in Switzerland where Subway sandwich points and Swiss Federal Railway rewards could be redeemed for each other.
"Because you have all those points spread out on different databases, the reconciliation is very, very hard," Giancola said. "Withblockchain, you really can connect very easily all those loyalty systems. We give the companies a very easy solution to integrate on the blockchain. And, the good thing is, it doesn't belong to anybody, not to the airline or the restaurant chain, it's decentralized."
The product is a dashboard to create your token. Giancola says it takes a company just six hours to integrate their system using the Qiibee API.
Breaking into the American market is key.
"Nobody would really take you seriously when you call from Switzerland. You start at the reception, you start talking about blockchain, they don't even know who to talk to. In general, our strategy is to really grow through partners and through good connections. We believe in loyalty."
And gaming. Giancola believes that video games, with their rewards and currencies, are a good model of consumer behavior. "Look at all those PlayStation games, where you earn some coins to buy the player, or you have some room to build a house. Gamers know how to play with the human gaming behavior. If the chief loyalty officer position were given to a gamer, he would boost customer engagement easily. Because they look at key performance indicators differently."
Reporter, The Business Tribune
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