Blockchain Giving Small to Mid-Sized Businesses a Leg Up

What Can David and Goliath Teach Us About Blockchain Disruption?

A few years ago, I came across Malcolm Gladwell’s David and Goliath: Underdogs, Misfits, and the Art of Battling Giants and couldn’t help but think about small businesses, new tech, and how the Internet massively leveled the playing field. Gladwell’s point in the book is that perceived disadvantages can actually be the very reason for an underdog’s success. Of course, small businesses can obviously rejoice in this concept of using their weaknesses as strengths. However, it was his reinterpretation of the David vs Goliath story that specifically got me thinking about how the adoption of new tech can enable smaller businesses to not only level the playing field, but altogether destroy it.

How did David kill Goliath?

According to Gladwell, there are three critical misconceptions about the traditional David vs. Goliath story.

The first involves Goliath’s apparent lack of vision due to the disease that likely caused him to be so physically massive.

The second focuses on Goliath’s heavy, inconvenient, and lumbering armor and weaponry that made him slow and easy to hit/dodge.

And the last misconception focuses on the idea that David isn’t a weak, meager character and is actually much more powerful than he’s typically depicted. He is agile, smart, and incredibly lethal, with a seemingly misunderstood but extremely effective piece of technology: his sling.

I look at large businesses today and I see Goliaths. I see slow, inefficient, and overestimated enterprises that lack the vision to see their own flaws, the changing state of their industries, and the smaller competitors that could easily overtake them with the right tools and approach. These smaller businesses, the Davids, are nimble, adaptable, and ready to use new and misunderstood technology to their advantage.

What is today’s version of the sling, the agility, and the vision that David had enabling him to disrupt expectations and defeat Goliath? 20 years ago, it was the Internet. Now, it’s blockchain.

How can blockchain help SMBs compete?

When people think of blockchain for business, they typically focus on payments via cryptocurrency. I do believe optimizing transactions using crypto is an extremely powerful and disruptive element of the ongoing blockchain revolution. But I think the bigger and possibly even more transformative picture involves blockchain’s ability to increase transparency, improve tracking capabilities, and strengthen the flow and analysis of data within a system. When you combine those improvements with the cryptocurrency transactional opportunities, you get an unstoppable new wave of tech. And this tech is seeing some of its most important implementations in the realm of supply chain management and logistics.

After more than 35 years of working with businesses of all sizes and shapes both domestically and internationally, I’ve come to realize that the most critical factor that makes companies become serious competitors involves their supply chain. Products are important, customer management is crucial, but logistics determine the real operational costs of a business. Supply chains are the backbone of all businesses and smaller operations need to focus on them in order to remain competitive.

Blockchain can help SMBs become competitive in the same ways that the Internet did 20 years ago. It’s similarly democratizing, relatively inexpensive to implement, and can radically transform the longstanding, often inefficient logistics operations that have traditionally slowed growth and development. In the words of Thomas Friedman, the Internet is “flattening the world” by instigating a new era of globalization leading to leveled playing field. Blockchain is working in the same ways.

The advantages that blockchain specifically offers to SMB supply chains involve improved status, decreased costs, enhanced data utilization, and a sharper edge.

Transparency in a system makes forced inequality a lot hard to get away with. Blockchain’s decentralized ledgers and smart contracts make it so all participants in a supply chain are at an equal level of transparent visibility into all ongoing operations. This improved transparency and tracking of activities makes it much more difficult for larger businesses to take advantage of SMBs through corruption, fraud, or other unfair and one-sided practices. Thus, all businesses in a blockchain-integrated supply chain can share equal status regardless of their actual size or perceived power.

Virtual currency will take the power away from banks and credit card companies and place it back in the hands of SMBs and their customers. Cryptocurrency can dramatically decrease transactional fees and inefficiencies involved in exchanges that are largely weighted against smaller businesses. With easier, faster, and more cost-effective transactions, SMBs can avoid unfair and costly payment procurement services. Transactional costs are one of the biggest detriments to many SMBs. Crypto dramatically levels the playing field by enabling SMBs to altogether avoid these costs and inefficiencies.

Blockchain can help small businesses leverage data in a big way. The ability to track and record data throughout the supply chain helps businesses understand the true cost and inner-workings of their logistics and allows them to respond accordingly. With blockchain, tracking capabilities are taken to unprecedented levels. Data can be registered from every step of the supply chain in astounding quantity and quality. This newly unrestricted flow of information can help SMBs proactively respond based on real-time data registered for everything from their sourcing/manufacturing to their customer services and relationship management. Better, faster, and more accessible data will give SMBs the ability to be even more adaptable, agile, responsive, and ultimately in full control of their logistics.

Can’t all of this also help larger businesses?

Sure, all of these benefits could ostensibly be leveraged by larger enterprises. And the truth is, the smarter and more agile big businesses will inevitably utilize blockchain. But we are in a groundbreaking time where the smaller operations can jump on this new tech before it becomes an industry standard.

In the same way that the Internet allowed smaller businesses to get a leg up on larger businesses, blockchain is proving to be a democratizing force, particularly with its use in optimizing supply chains. If small businesses can adopt this tech at the right time, improving their operational costs, efficiency, and ability to expand, then they can get a leg up on slower and less agile big business. The Davids can leverage their perceived weaknesses as way to gain an advantage over the Goliaths. This is how disruption works and it’s why I see blockchain as the next Internet.

Why am I focusing on small businesses?

I’ve come across several companies using blockchain to optimize supply chain management at the moment. Some of these guys are industry giants like IBM and Maersk, Amazon, and Walmart. These enterprises are developing blockchain for themselves, for the Fortune 500 and the Goliaths of the world. They aren’t focused on democratizing or leveling any playing fields. They’re focused on helping the big get bigger, largely maintaining the status quo, and further homogenizing the world.

If these corporations had their way, consumers would be left with only a few choices for everything that they purchase. We’d all be eating the same food, wearing the same clothes, driving the same cars, etc… Sound familiar? That’s because homogenization is already in full effect throughout the world. And while blockchain will inevitably cause further globalization, its disruptive potential will at least allow for newer, fresher businesses to detract from the growth of these overly standardizing giants.

I see blockchain as a tool for growth and development. It’s something that, like the internet, can truly shake things up and move us into a new era while hopefully removing some of the same old players from their industrial thrones. This type of disruptive tech only comes around every 10–15 years. We’re at the beginning of a new wave and I’d like to provide smaller businesses with a viable means for riding it to the top.

There are roughly 28 million small businesses in the U.S., accounting for 54% of the country’s annual sales. When most people first see that they often think, “well ya, but those are all highly localized, solely domestic operations.” And many of those 28 million business aren’t meant to expand into globalized enterprises competing with larger corporations. Still, with these SMBs making up a third of America’s exporting value, there is undeniable potential for expansion to occur within these smaller ranks.

These SMBs have advantages that are frequently perceived as detriments. Small businesses are defined as having fewer than 100 employees. Medium or Mid-sized businesses have under 1000. This doesn’t make them less powerful. It makes them more agile, more adaptable, and more willing to experiment with groundbreaking technology. These businesses are vigorous, vibrant, and would be undeniably able to take on giants given the proper set of tools. The only downside is that they often don’t have the financial resources to completely transform their supply chains in the way that larger corporations can.

That’s why my new project, SupplyBloc Technology, is focused on helping small to mid-sized take advantage of the power of blockchain technology to remain competitive and grow into globalized, powerful enterprise operations. We’re working to bring affordable, yet revolutionizing tech to the businesses that need it the most. SMBs usually already have the same agility, vision, and nonconforming mindset that David had in his battle against Goliath. We’re here to provide the technology that David used to overtake the giant. With SupplyBloc, my goal is to give SMBs their sling. Which in this case is blockchain.