Navigating the potential of blockchain technology
This is the final article in a three-part series inspired by JTV’s Blockchain in Travel Summit. For an overview of the entire event, click here. For a deep dive into the aviation-specific use cases presented on stage, head here.
Our inaugural Blockchain in Travel Summit brought together many smart minds working on blockchain-related projects. Thanks to this rapidly evolving ecosystem, there’s a growing knowledge base around navigating the threats and opportunities of distributed ledger technology.
The event featured three panel discussions around accelerating the adoption of the technology, with participants from investing firms, industry alliances, and research groups. Here are some of the most pertinent and insightful tips from this diverse group of experts.
Collaboration and widespread adoption
One of the prominent themes throughout the day was collaboration — further necessitated by the fundamental structure of a network-based technology like blockchain. The theme was discussed in depth during an industry alliance panel moderated by David Post from IBM and featuring Lucy Hakobyan from the Mobility Open Blockchain Initiative, John Kingston from the Blockchain In Transport Alliance, and Sikina Hasham from U.S. Customs and Border Protection.
With greater cooperation, the industry can coalesce around shared standards that streamline innovation processes and reduce bottlenecks. Shared standards also reduce risk. When a company knows that there is some level of interoperability, it can make a decision based on the potential applications of the technology without worrying about compatibility. This is especially relevant today, as distributed ledger technology is still evolving from proofs-of-concept.
Widespread adoption requires a shared sensibility, which aligns interests among stakeholders — even those that compete with each other. Hakobyan used the example of OEM vehicle manufacturers, who realized that standalone blockchain proof-of-concepts weren’t sufficient to make a consensus-driven impact:
“At some point, they all hit the question: So what now? How do we actually adopt this? Understanding that blockchain is really a network technology, some of these OEMs starting meeting informally. They came to the realization that the industry didn’t need another PoC. What they really needed was standards, interoperability, and a collaboration platform for everyone to come together around a framework, policies, and governance.”
“Future proofing” was another common topic of the conversation. Hasham emphasized that part of future proofing begins upfront when choosing technologies. Projects may fail to gain traction without a clear reason to use blockchain technology, as she explained:
“When do you need blockchain and when can something else work? Integration and getting buy-in from leadership is important, so we have to be able to make the case that blockchain provides a benefit that another existing technology doesn’t already provide.”
Hakobyan added that certain use cases aren’t quite ready for blockchain — it’s essential to “make sure that you’re considering the right risks. The blockchain is probably not a solution for everything out there, so having that upfront analysis, having that integration with a current solution, is very important.”
Translating theory into action
Another panel brought together different perspective from BCG Digital Ventures’ Kishore Bhatia, Skift’s Seth Borko, Plug and Play’s Angela Shi, Amazon Web Services’ Lana Kalashnyk, and Tim Swanson from Post Oak Labs who moderated.
Education and access are two hurdles when putting blockchain theory into action. First, how do advocates socialize distributed ledger technology internally at their companies? And second, how do startups access the corporate data assets that can power truly innovative new products?
Bhatia put these two barriers into perspective, highlighting the work to be done around applications for blockchain technology:
“Education is the biggest factor right now. It’s also about getting traction around access to volume, access to data that is right now locked in silos. How do I get access to corporates, to the real volume that’s happening in businesses running travel distribution or segment platforms or payment platforms?”
For Shi — who works with startups seeking scale in travel — education and scalability are the primary limitations:
“I work with startups on a daily basis…The knowledge gap is so real. When it comes down to the knowledge gap of the industry, it’s huge. Another limitation is scalability. For blockchain to work, you need to scale across different stakeholders to get the value out of the technology.”
As the shift towards production-grade systems occurs, stakeholder management remains a priority. This soft skill is what keeps all partners engaged in the success of pilot programs, which then assists internal advocates in winning buy-in for full implementation. Here’s how Bhatia approaches the process:
“Stakeholder management is really important on two sides. One is the internal education for the team and the partners. And second, it’s the corporate partners, the clients, and the industry partners looking at this from an outside view. There’s a little bit of stakeholder management at the start of innovation but a lot deeper stakeholder management during innovation to keep them engaged throughout.
An investor perspective
Investors evaluate the potential and promise of startups every day, which influences how they approach funding the ecosystem as a whole. The investment panel was moderated by myself and included Pantera’s Lauren Stephanian, Britney Crooks from Accenture Ventures, ConsenSys Labs’ Shawn Cheng, and Jalak Jobanputra from Future Perfect Ventures.
Innovations around data — its capture, storage, and ownership, as well as its analysis — were seen as fundamental to blockchain’s value proposition. Jobanputra places data at the center of how companies can outpace competitors and win customers:
“Airlines, travel companies, hotels, have built moats around data. Those were the business models of the 20th century. We’ve seen a movement towards opening up customer data. We’ve also seen a lot of global competition. It’s all these pressures on companies where they need to innovate and create better experiences for their customers. Whoever innovates fastest wins the customer.”
Yet these innovations are slow to come, as Jobanputra emphasized. Many of the new business models and commercial innovations will require more collaboration and data sharing among companies — especially those that have traditionally walled off access. “This is why enterprise blockchain is so tricky to invest in. It’s all driven by industry participation.”
This reluctance and entrenched mindset must be overcome for blockchain technology to thrive in travel. The industry is slow to change, I explained on stage, because legacy technology impedes progress and profitability encourages the status quo:
“Where there’s inefficiency, there can be simplicity. All these different players have come into being to make [the travel industry] work. This means things will change very slowly…We say profit eats innovation for breakfast. You’re making plenty of money today; why take the risk to make the change?”
The broader discussion around where value returns to investors in blockchain-based platforms triggered interesting responses. Cheng sees opportunity in the many ways investors evaluate potential investments:
“What is the definition of value and success? What is the time horizon? Is it dollars, is it people impacted? Is it over the short term or long term? Those are all questions we’re constantly asking ourselves. We see the space’s greatest challenges as our greatest opportunity.”
Still in “the first innings”
The reality of emerging technologies is that it takes time — and a long-term perspective — to truly realize their potential. Bitcoin, the original cryptocurrency that introduced blockchain technology, was only released as open source software in 2009.
As we near the first decade of the blockchain, the time-to-market for new innovations has accelerated. Although distributed ledger technology is still in its infancy, the interest and traction so far are promising and mainstream adoption grows each year. The technology is being pushed ahead by early adopters and innovators who are experimenting, learning, and improving. As I concluded on-stage, the game has just begun:
“It’s really exciting to see that we’re in the first innings of it all.”
Click here to watch our video recap of the event and save the date for our second Blockchain In Travel Summit — March 18, 2020 in New York City.
