Chapter 10: THE WINNER TAKES IT ALL
So, you’ve got it. The blockchain is the future. Nations will dissolve, companies will perish. But you want to aim for the sky, right? Now what? Ok, let me point you in the right direction. Let me show you where you find the golden path towards the glorious world to come.
Following his new book on digital strategy How To Become A Digital Marketing Hero, Rufus Lidman is now translating all his knowledge to the most revolutionary field in the world. A field in desperate need of a digital strategy. In a series of articles, we will get an upclose view of this new mind-blowing market, seen through the eyes of a digital strategist.
>> Chapter 1: The Revolutionary Technology That Will Change Your Life
>> Chapter 2: The Birth Of The Future
>> Chapter 3: A Real Revolution In Practice
>> Chapter 4: A Metamorphosis You Are Not Prepared For
>> Chapter 5: The Apocalypse Of The Establishment
>> Chapter 6: The Secret Recipe To Reach The Absolute Top
>> Chapter 7: The Simple Answer To The Global Problems
>> Chapter 8: Crypto Hits Rock Bottom — But Is It Really That Bad?
>> Chapter 9: Let’s Innovate — Not Regulate
In our past chapters we have gained insight into the fundamental goals of the blockchain. But also the means with which to achieve them during a second wave. A few concrete conditions to enable this have been made apparent along the way. And this regardless if we’re talking about a geopolitical, corporate or individual scale.
The Great World Division
On a national level, we see gigantic differences worldwide. On the one hand, we have a great number of countries trembling, doping their economy with artificial life support and banning as well as regulating the gutter kids, who are about to reveal the emperor without clothes.
On the other hand, we have a growing number of countries who see their shot at creating optimal conditions for the new wave of blockchain companies, and who therefore are attracting both corporations and investments on a large scale.
So in a single stroke, the world is being divided into first and third world countries of the new era. And it’s not necessarily the first world countries of old that are leading the game.
The more I look at it, the clearer it becomes that my native Sweden is ending up in the third world category, despite its history of being quite avant garde in many senses. Why is that? Well firstly, cries for regulations and warnings about the new technology are commonplace. The financial authorities are issuing alarms about ICO’s. And the Governor of the Swedish Central Bank are alerting cryptocurrency investors that they are ”on their own”.
And this has since then been formally presented in a gigantic regulation initiative, where the old dinosaurs have closed ranks for a collective attack. The G20-countries are agreeing to regulate (while at the same time implying accomodations for) the cryptocurrency, using the Financial Action Task Force (FATF) to apply for crypto-assets. The Financial Stability Board (FSB) Chairman Mark Carney simultaneously states that crypto-assets “do not pose risks to global financial stability at this time”. And the G20-countries have also acknowledged that the “technological innovation underlying cryptocurrencies has the potential to improve the efficiency and inclusiveness of the financial system and the economy more broadly”. All of this is of course a net good. It’s only the direction of energy that perhaps isn’t as positive.
While Sweden and the G20-countries are going down the path of warning and regulating, the interest among professional investors and stock markets worldwide have exploded this past year. There are now hundreds of hedge funds investing in BTC.
For historic reasons, Asia is particularly well suited to benefit from the added capital. 70 percent of the bitcoin mining pools in existence are still based in China, which has gone from yuan to ye. Half of all global BTC trade on the other hand is based in Japan — the first country in the world to approve cryptocurrencies as a legal currency. Also becoming the home of the first employers in the world to offer salaries in crypto. South Korea isn’t far behind either, together with Vietnam. Both countries with very high prevalence of internet connectivity.
But even more are on the move. As we’ve seen in the first chapter, it’s not the ones who are in the forefront of the digital technologies that are the first to take initiative in creating opportunities and solutions of old problems. Countries such as Mongolia are in the starting pits, Dubai is launching blockchain technology as the standardized platform for government documentation and Malaysia have already begun regulating for cryptocurrency transactions. Malta is looking to become “the blockchain island,” with the world’s largest trading space for cryptocurrencies. And the foremost biggest crypto hub in the world, aside from Singapore, has landed in Europe. The lovely little Swiss village of Zug is now renown as “The crypto valley”. Many serious contenders in the field, including us at AIAR, have chosen the latter to open offices and legal departments.
Finally, even some of the bigger and well-established western countries are realizing that it’s time to hitch their wagon to this ride, if they want any fighting chance in the near future. The first EU member country to excel in the area is Spain (leaving France in a mild state of panic). It is soon to follow with taxation laws to incentivize ICO investments and offer benefit to companies dedicated to these.
So chin-chin to the country where I lived and studied as a child, and where my company opened its first international office. Spain is here fast becoming “The Blockbuster of Europe”, and Barcelona specifically “The Silicon Valley of Europe”. It’s hard not to be impressed. As mentioned, right now Spain is taking some heavy action. As the first country in the EU, the government is preparing a new legislation, incentivizing digital entrepreneurs raising capital via ICO’s. Utility tokens will, under certain conditions, be able to be separately audited from traditional currencies.
Spain has gotten the message. Tech startups are the only ones that truly drive development forward. And tech companies of the blockchain will be the true rulers. That’s why a whole barrage of actions is being undertaken to attract the companies of the future. The aim seems to be that the second wave of the blockchain is to be set up in Spain. Or as the deputy prime minister said:
“We want to set up Europe’s safest framework to invest in ICO’s”.
So, aside from the blockchain having the capacity to seriously save the world. And aside from Spain being the key to having Europe go from generating unicorns to actually generating the world’s next digital gorilla. Viva España! Barca, te amo! And Spain, here we come.
(And yes, this is precisely why AIAR chose to set up our first development office here.)
So we have countries that are terrified of change and stuffing their centralized heads in the proverbial sands. Or, even more aggressively, start shouting off the rooftops for regulation and bans.
Then we have the above mentioned countries that embrace change, and do their utmost to create ideal conditions for companies and investors in the field to truly embrace the revolution to come.
Guess which countries have the leg up in long-term success. And guess how many of the analogue nations will survive in the increasingly digital world.
Three Types of Companies
The above mentioned dichotomy of nations is frighteningly mirrored also among companies and the corporate world. Here, however, we find three different levels of division
Firstly, we have all the old analogue companies. I said somewhat provocatively earlier that they’ll cease to exist, and that I still hold true. If you don’t get a move on and change precisely everything your operations are built on, then you will cease to exist alright.
This became abundantly clear when I attended the post-Davos event at the start of the year, visited by, among others, the Crown Princess of Sweden, former Swedish head of state Carl Bildt and Google HQ. Despite all of these celebrities and an amazing theme, it wasn’t just clear, it was embarrassingly obvious how far behind the curve the traditional mega-corporations are.
“If we don’t transform, we die!”
Some CEO’s for the biggest companies in the old analogue economy tried to persist and emphasize how they are specifically not dinosaurs of a long forgotten age. One of the biggest banks of Europe even had the wherewithal to make the lucid observation “if we don’t transform we die!”
…While it, at the same time, became the first bank in northern Europe to ban its employees from buying crypto.
Then the world’s most amazing entrepreneurial group, the Norrsken Foundation, showed everyone how things should be done. A divine session, mixing both old and new, with ABC (AI, Blockchain, Crypto) technology being a major part of it. They demonstrated how much the old establishment should be aware of what’s to come, and how the new technologies will come whether we like it or not. It made me proud of this, our entrepreneurial generation!
And this is a sentiment echoed throughout the world. We have on the one hand the old establishment sitting in a living room caught on fire, denying the flames licking their bootheels. Or doing some small side project to paint the image of still being in the loop. No names mentioned, but this is the way it is thus far for 99 percent of them.
Then we have those who are awake. Companies like IBM or Maersk.
Or Samsung. It is almost as if it’s written in the stars that it was my former client for over a decade and one of Asia’s and the world’s biggest companies, that was first on the ball to produce the microchips that do all the mining.
As a secondary factor, we have the digital gorillas, that already during the first generation of the internet assumed global domination from the old analogue companies. They are now known as FAANG (Facebook, Apple, Amazon, Netflix and Google), representing 50 percent (!) of the market cap of the Nasdaq 100 Index.
All of these operate out of an extremely centralized model. All of which somehow, when nations haven’t kept up with laws and regulations, managed to acquire an oligopoly, if not a monopoly, on their respective markets. With one or two of these gorillas ruling their field vertically. Google and Baidu within search engines, Amazon and Alibaba on eCom, Facebook and Snapchat on social media, YouTube and Netflix on streaming services and Appstore and Google Play in apps.
Almost all of which could be argued are approaching outright ”evil-minded” practices of exploiting the centralized data they’re acquiring in the process. And doing this in a way that doesn’t in any manner benefit the consumer, but exclusively their own wallets and those of their shareholders.
Facebook’s data gets ”leaked” to political organizations with the aim of influencing political elections and smear campaigns. Google uses their considerable sway to take down any and all competitors. Apple aggressively avoids taxation by any means necessary. Even Amazon spends nearly 14 billion USD on analyzing customer data to manipulate communications and offers in the right direction. If you analyze these companies from a blockchain perspective, two absolute truths become abundantly clear:
1. These are companies that stand to lose everything with blockchain technology.
2. They will spend insurmountable amounts of money, time and effort to stay alive.
Most of these companies already have massive investments in the first of the ABC- technologies, AI. They are coming around on the second, blockchain, and whatever they may say now, they will launch their own cryptocurrencies to command the third.
Remember where you heard it first.
So be afraid. Be very afraid.
Or simply, stay wide awake.
Luckily, there are a few that stand to stop the digital dinosaurs from doing just that. Those are the governments, legislature and federal agencies.
Right?
Not very likely, I have to say. Here, if anywhere, we find old-fashioned centralists with blunted tools and slow processes. But we got GDPR, you might claim? Yes, we got the GDPR. Ten years after it was needed. And now that it’s finally here, it’s so toothless that even teenage hobbyists know how to circumvent it.
If we analyze society at large today from a more sociological power perspective, the power today is consolidated in companies and their (active) consumers only. Leaving politicians and the rest of us (passive) citizens behind. This is similarly reflected in traditional media and their passive base audience, losing power to social media and their active participants.
If we are to seek comfort in anything, but the vague hope that these dinosaurs would for some inexplicable reason switch from evil to ethical, we have to turn to other companies. The new digital ventures. The ones deep in deep-tech of ABC. Companies with a brand new perspective and a good portion of bravery, fighting spirit and yes, outright balls to change the world.
These companies need, on an aggregated, level no strategy at all.
They are, as a collective force, so incredibly strong that they’ll succeed anyway. However, on a more individual level, whatever strategy they adopt, they may falter and fail. Those who systematically dig through stacks and stacks of whitepapers, might find crypto companies consisting of four, five ukrainian programmers that assembled some fancy code, but comprising zero business insight and without any well-packaged products nor strategy to speak of. We find old companies that try to boost their profile by changing their name, slapping on the erc20 standard of ethereum to their businesses and call themselves ”blockchain companies”. We find the outright frauds and charlatans, who have put together something that sounds great on paper, but upon closer inspection is all about getting a quick buck. We also find the pure idealists that have fought the good fight offline and now hope that the blockchain will be kinder to them to finance their good fight online.
To the worldly business strategist, it’s a wonder that so many of these actually got funded for the first wave.
What’s even more beautiful is that in the middle of all this chaos, we find the awesome business ideas. In finance, in healthcare, in infrastructure and in data. And yes, also in my own area of education technology, where there so far isn’t much serious competition to speak of. All with great ideas. Some with some neat code. Very few with a sensible strategy.
This is said to be the root cause to why we last year ”only” saw a 60 percent success rate for ICO’s. Those who have some experience in equity know that those rates would be considered incredible within traditional venture capital, where one in ten investments pull through to finance the rest.
From that perspective, 60 percent is actually too much. But it was what to expect from the first wave. Now, as the insane novelty has worn off, investors are getting less and less naive and demand more auditing and verification. They require more thorough analysis and clearer strategies, and only extremely compliant blockchain ventures will be able to slip past. This is good news though. I see it as a healthy sorting out of the weeds from the stock. And this will help attract the really big money and give birth to the major players on the market.
And believe me, they’re coming. As they should. Because the pure blockchain companies that are emerging in the second wave, they will be combining their revolutionary force with a sound basis of analysis and awesome strategy. And many of them really do have the potential to not just make a difference, but to actually change the world completely. And you can bet your ass that ICO investors will be making a massive amount of money investing in them.
The Way For You To Go
On an individual level, there is no contest. If you want a shot at competing in the marketplaces of today and tomorrow, you can only go in one direction.
Seek out countries with a future. Seek out companies that live and breathe future. Get the competence you need to compete in a global company.
And please understand, this whole competency revolution is directly based on the ABC and deep tech in general, and revolutionary applications of blockchain in particular.
If you haven’t understood that much, you haven’t understood anything at all.
