My Journey to the Blockchain shores
As an Italian entrepreneur living in Germany since 1992, I am long since used to discovering and absorbing fragments I like of both cultures and then combining them together in a creative, innovative way. My Italian friends call me the “most German of the Italians” (not really sure they intend this as a real compliment…), while my kids believe I have a German mind and an Italian heart (this I like, of course!). I was born in Venice, which probably explains my love for the sea and my lust for traveling and with using business to make new friends around the world — a little bit of Marco Polo, I know.
I am a passionate tech entrepreneur, because being an entrepreneur is the best way I have found to be really free and to be an artist at the same time (I am completely untalented in the fine arts); as dreaming of a venture first in my mind and then transforming it into reality is an amazing piece of creative work. Talented painters would probably disagree with me, but if only they knew how Picasso-messy startup phases are…
I derive the utmost pleasure from thinking, including getting an idea while jogging, and then planning how to radically improve/change an existing process and search for the right technology pieces and stitch them together like an Italian tailor maestro into a very sound business model. I have been doing this now for almost 20 years, in many different industries, and every time I enjoy the exhilarating feeling of meeting new partners in an entrepreneurial adventure and synthesizing together our intellectual clarity, operational energy, freedom and emotions for co-creating something new, something unique, something special. I do not know any other field of human activities that are so broad and rich in perceptions, but probably one should not believe everything one thinks…
When I first met Pierluigi, my friend, the founder and products mastermind of ORS, and I discovered the amazing algorithms and software he and other brilliant minds had created over many years, I could not believe my eyes: here is, in the Piedmont region of Italy ( better known for excellent wines, truffles and home of the Nutella inventor) a company “not even Silicon Valley has!” I am aware how many friends I am making right now with this bold claim… I found over 1,000 unique algorithms (A.I., statistics, mathematics, econometrics, machine learning, etc.) and hundreds of software solutions embedding such algorithms for optimizing (i.e., increase efficiency) and even automatically steering very complex processes and value chains for global customers worldwide. Wow, I mean, it was crystal clear to me that data is the new oil, but here in the idyllic, truffles infused city of Alba I had found an incredible “refinery”, able to turn Big Data into cash (indeed, that was the new claim I then created for the company). I immediately became a major shareholder and since then I have been developing and expanding the business as the Chairman and President of the group (we now have an operational presence in several countries).
What differentiates ORS and makes our story unique? Let me give you just one example: For a global manufacturing and retail company with over $10B in sales, our A.I.-based software is deciding in real time the yearly distribution of 20M items to almost 300k customers from a network of 200 distribution centers and warehouses. And in taking such decisions (“whom should receive what, when and how?”), the algos optimize the whole supply chain and even send commands to SAP for execution. The significant results are a 50% reduction in inventories and $200M in savings every year.
When I discovered the impressive number of algorithms and software modules available at ORS, I felt like a kid in Legoland: here I would have the possibility of playing with, combining and mixing together pieces of technologies for innovating many business models. The dream of almost any entrepreneur was suddenly my reality !
If C. Jung’s concept of synchronicity, or “meaningful coincidences”, is true, then my discovery of ORS and my encounter with Pierluigi was meant to be. Together, we combine: (i) an incredible mathematical mind (not me, of course) able to invent an algorithm — working in real life for real businesses — for almost any process, even the “mission impossible” ones (how do you predict the best picking time of grapes to make an excellent red wine? Come to visit us and you’ll see!); (ii) a creative and experienced businessman (not Pierluigi, as he would give you the ORS products for free just for the pleasure in seeing you excited). Interestingly, when I gave an interview at an Italian radio (here), the topics of A.I., software, Germany, Italy, wine, gourmet food, philosophy, music and much more came together in the conversation and a few years later I would understand the implications — stay tuned and continue reading here.
Regularly commuting from Germany to Piedmont, I could not avoid being fascinated by the stunning beauty of the hills and wineries of this picturesque region and so I decided to make my own wine (I have become rather good at it, just ask the people at ORS) and I started investigating the industry. When I discovered that the majority of the wineries producing excellent wines are small/medium sized businesses and that due to a huge offer fragmentation and too much power being consolidated by distributors they barely (financially) survive and sit on an important, yet to be sold stock of vintage wines, a few questions and an interesting idea came to my mind: what if this network of highly independent and decentralized (here we go!) organizations, which are too small and therefore powerless against a few giants in the sector, could monetize their existing (valuable) stock of wines by issuing an electronic currency backed by such a stock? With the new liquidity they could invest in sales and marketing and therefore grow their businesses and quickly repay any money they received, even in kind. A sort of temporary digital currency, which I now know would be called a few years later a “utility token”.
The second approach, bringing me closer to the blockchain shores, came almost at the same time, while I was writing a blog -then a book- on macroeconomics, politics and finance (just for fun and for the pleasure of reasoning on what was going on after the big financial crisis -like many other freethinkers worldwide). I was very disappointed about my rediscovery, after spending so many years abroad , of the Italian politics and the problems that plagued my homeland -although, at the same time, I became very skeptical about the touted superiority of the “German model,” now everyone knows why. I then had the intuition to suggest the creation of an Italian government-backed cryptocurrency , the “Bit-Eurolira”, to run in parallel with the Euro in order to reflate the economy of the small and medium-sized companies (the real backbone of the Italian economy) and escape out from the austerity programs imposed by (Berlin) Brussels. At that time, blockchain was not on my radar screen but somehow the concept of regaining control of the instrument “money” through technology and the collaborative sharing of information among many tiny participants (in the case of the wineries) were swimming rapidly in my mind.
In 2017 the fruits were ripe. A soon to be professor in engineering had just joined ORS and he had a few students working with him on a blockchain scientific paper. I finally had someone with whom I could pose a few technical questions to (how does it really work? What kind of coding and possibilities, etc.) and we started a very fascinating conversation. On the way back home, suddenly I was struck blind by lightning and I understood how powerful the combination of A.I. with blockchain and with smart contracts could be for helping businesses achieve what I am calling efficiency singularity, i.e. the theoretical maximum efficiency / productivity achievable. Why that? Simply put: any value chain is basically composed of three major flows: (i) the flow of goods/services; (ii) the flow of information; (iii) the flow of payments. ORS, thanks to its algorithms, is already able to “extract” very high efficiency — conditioned upon data availability — from the processes related to the movement of goods/services within a value chain (from a very small Asian sub-supplier to the end consumers), by synchronizing the activities of all the participants, even independent ones. But the flows of information, documents and payments are still very slow, cumbersome and somehow stuck in the “Middle Ages.” The Columbus’ egg was to understand that blockchain can be used for collaboratively collecting and sharing information (even using crypto rewards to incentivize the sharing) and that Ethereum smart contracts are very useful for executing instant payments without financial intermediaries.
What a beauty ! Three technologies (A.I., Blockchain, Crypto) to be “stitched ” together (I know, I know, the Italian tailor maestro is still here) for creating and improving almost any business model. This is how the concept of the Hypersmart Contract was born and that is how I reached the marvelous blockchain shores.
This fascinating journey of mine has only just begun but I can already tell you that the blood in my veins is pumping at high speed. I am deeply convinced that Blockchain and Cryptocurrencies are here to stay and they will be much more disruptive and transformative than many think. By connecting them with A.I. , which means adding mathematical logic to take optimal decisions in an automated manner under stochastic conditions, they can be used to radically change business models and even society. For example: they can be used for partially reversing an unpleasant trend of centralization, concentration of power and fully transparent citizens. But change can only occur by evolution and not by revolution, because the enemies out there are many. The Hypersmart Contracts are the enabling technology for making the power of the vast libraries of the ORS algos available to developers and entrepreneurs, therefore contributing to their own projects and business models, whatever these might be (B2B, B2C, B2G, etc.). As a matter of fact, decentralized data storage, cryptocurrencies and smart contracts are very useful building blocks for creating innovative concepts and for challenging incumbents, but the real differentiating component is the algorithmic intelligence which can create long-lasting competitive advantages by leveraging on an increasing availability of useful data (Big Data).
In this way we can innovate and change -for the better- the way business is done and change how society works, one startup, one project, one value chain after the other. Playing together, we can have fun, make money and deliver an improved social contract to our children.
Play with us, I hope to see you soon among the beautiful Italian hills.
Fabio Zoffi — ORS GROUP
“When the accumulation of wealth is no longer of high social importance, there will be great changes in the code of morals. We shall be able to rid ourselves of many of the pseudo-moral principles which have hag-ridden us for two hundred years, by which we have exalted some of the most distasteful of human qualities into the position of the highest virtues. We shall be able to afford to dare to assess the money-motive at its true value. The love of money as a possession — as distinguished from the love of money as a means to the enjoyments and realities of life — will be recognized for what it is, a somewhat disgusting morbidity, one of those semi-criminal, semi-pathological propensities which one hands over with a shudder to the specialists in mental disease.”
― John Maynard Keynes, Economic Possibilities for Our Grandchildren