I do not profess to be, as way too many in the tech industry do today, a blockchain guru or subject matter expert.  I leave that designation to 11:FS co-founder Simon Taylor.  Simon is the MacGyver of the blockchain community.  Give him a stapler, a can of Bud Lite, Duct Tape, and a flashlight, and he will somehow concoct a DLT smart contract solution for a client.  A solution that can actually be delivered and that addresses a real business case.

What I do have is the experience of sitting in a conference room or on a WebEx or at fintech conferences listening to multiple “SMEs” pitch blockchain solutions or advisory services to banks.  And I’ve noticed a consistent trend:  even though our industry has been talking ad nauseam for the past three or so years about blockchain as the end-all-be-all solution to every aspect of banking, almost no one at an executive level or within the tech suite at banks still has a good grasp on what the hell DLT is or what possible solutions it can really provide.

No one at an executive level or within the tech suite at banks still has a good grasp on what the hell DLT is.

I was recently reading How We Got To Here, a must read by Steven Johnson for anyone interested in innovation. The book tells the story of basic inventions we take for granted today such as light, refrigeration, print, etc. One specific story stood out to me as a case study for blockchain applications and how to approach this complex subject. Funnily enough, the story does involve blocks; not blocks of code but blocks of ice.

Frederick Tudor and Ice Block Shipping, a metaphor

In 1807 Frederic Tudor commissioned a ship to sail from New England to Martinique in the Caribbean. The ship’s cargo was a massive block of lake ice from his home state of Massachusetts. While it was common for New Englanders to have blocks of lake ice stored in ice houses to “refrigerate” food and to cool drinks throughout the summer months, the concept was foreign in the American South and Caribbean.  

Tudor was confident he had discovered a gold mine solution and would corner the ice block market in the South. Instead, the entire block of lake ice melted as the ship sat in the harbor of Martinique throughout the spring and summer months.   Tudor was unable to convince a single buyer to move forward with his disruptive solution. His ship eventually sailed forlornly back to New England, its hull empty and rather wet.  

Luckily for those of us who live in the South and enjoy a little bit of sweet tea with our glass full of ice, this isn’t the end to Tudor’s ice-block story. Tudor did what every successful startup founder should do; he experimented, failed, iterated, failed again, pivoted, perfected his pitch, and finally figured it out. Over time he perfected the art of shipping ice-blocks to the South and in the process became the equivalent of a modern day billionaire.

Tudor did what every successful startup founder should do; he experimented, failed, iterated, failed again, pivoted, perfected his pitch, and finally figured it out.

Tudor accomplished this by addressing three main pain points specific to his ice-block delivery methodology, all of which are applicable to the blockchain community.  This series will examine each and apply them to them issue of DLT and blockchain technology.  

Part One:  99 Problems but the Pitch Ain’t One

In the modern age ideas and tech innovations are a dime-a-dozen. There’s no lack of start-ups focusing on harnessing technology to address every aspect of our lives. The kiss of death for the majority of these solutions however, comes down to the ageless art of communication and marketing. Just because one is brilliant at technology does not mean one is a brilliant communicator. If anything, the two hardly ever go together.

Tudor faced this same dilemma. He had a solution that addressed a real problem for a large market. His early mistake; however, was to assume the market would understand the application of his product without any significant educational or marketing efforts on his part. Sailing a large block of ice from New England to the Caribbean was seen more as a novelty than addressing a market need. Ice simply wasn’t used by the local economies. They had no real reference point to understand the many applications it addressed. They also had no experience or real life use case reference points to connect the dots for mass adoption.

Tudor recognized this issue and worked tirelessly to perfect his pitch. He went door-to-door in his target markets evangelizing the use of ice to address every day needs in the language of the locals. He passed out ice cream to convince Southerners of the importance of his product without ever having to say a word. To say he was successful is an understatement. Ever notice how much ice is used in drinks in the U.S., especially in the South? You can draw a straight line back in history to Fredric Tudor and his marketing campaign.

The current state of blockchain

We face the same challenges today when it comes to DLT.  The hype concerning blockchain solutions and their impact on financial services, the insurance industry, and for that matter every industry, has been exhausting over the past few years. In many cases the promise of disruption from this new technology has been exaggerated, misunderstood, or simply wrong.

I love how Simon Taylor describes the state of blockchain today. The technology is the internet of 1993. Yes, it will change everything. No, we don’t have a clear view of how exactly but we do have a general idea and the picture is getting clearer at a rapid rate. Similar to the web in 1993 there are a handful (okay a little more than that now) of true innovators who understand the true potential of this disruptive force, that have the ability to beyond the curve. These individuals and organizations are worth their weight in gold. Or Bitcoin. Okay, let’s go with Bitcoin.

What the industry still lacks; however, is the ability to speak to the masses, or at least the C-Suite, concerning real life applications of this disruptive technology.

What the industry still lacks; however, is individuals or organizations that have the ability to evangelize or speak to the masses or at least the C-Suite concerning real life applications of this disruptive technology.  Industry conferences provide a looking glass view of both the appetite by attendees for information and the corresponding reply by “industry experts”.  Presentations or panels on blockchain at industry conferences tend to come in two flavors:  

  1. Incredibly simplistic (and in many cases wrong) targeted at a Pre-K level. This paint-by-numbers approach to the discussion appears to occur at every major conference where panel after panel states the exact same mantra concerning the disruptive power of blockchain and how everything is going to change, except they fail to give a single concrete example of exactly how this is going to happen. Or;
  2. A MIT symposium on cryptology for PhD’s. Nothing in this universe is more frustrating or for that matter more of a waste of time than attempting to educate yourself at many of the blockchain-only conferences. Sitting in the audience at many of these is the equivalent of sitting in on a lecture on quantum physics at Stanford’s Applied Physics Lab while you are still in middle school. Simply put, you can’t become a blockchain expert just by hanging out with the cool kids. Or by osmosis. Which would be convenient as you’ll most likely fall asleep attending these if you aren’t already deep within the space.  

Lessons from the ice-block king

At 11:FS we’ve asked ourselves if we are contributing to this education gap. We’ve decided to take advice from the ice-block king Frederic Tudor and implement some of his market education and marketing techniques. We approached this from a banking point of view and arrived as a three point approach for learning about and engaging with us on blockchain projects.

  1. Tudor educated his market. Subscribe and listen to our podcast Blockchain Insider (while you’re at it, subscribe to FinTechInsider and InsurTechInsider).  We’ve put together the best hour long podcast dedicated to and focused on educating the market on everything and anything related to the blockchain space. Trust me, there’s nothing more informative and interesting than listening to the passion Simon Taylor has for this topic. We literally have to turn his  mic off at the hour mark or he will just keep going.
  2. Tudor engaged in one-on-one conversations.  Come talk to us over a coffee, or better yet a beer. Nothing formal, no pitch deck, just a chat. Come pick our brains and let us get a feel for what you and your bank are really interested in doing. One of the most important attributes for a successful foray into the DLT world is to realize no one solution is going to solve all of your different programs. Your unique DNA as a bank involving your tech stacks, products, culture, deliver models, and customers will help drive the various solutions. And this will come out in our initial talks.
  3. Tudor demonstrated the value of his solution to the market.  Let’s play in the sandbox together.  Let’s work together on a Proof of Concept realizing this requires a series of very small, very quick, and very down-and-dirty experiments. Yes, many of these will fail. And that’s a good thing. Experiment, learn, and iterate. Fast. Don’t try to eat the entire proverbial elephant in one bite. At the end of the cycles you’ll be able to present to your C-suite both your learnings and a solution they will be able to understand the value of.

In part two of this series we will focus in on the sandbox and the art of experimentation. We can thank Frederic Tudor for his ability to notice what others didn’t: the importance of sawdust.

 

For more information about how we can help you with blockchain projects, visit our services page, contact us now or subscribe to Blockchain Insider to learn more about the industry.