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Month: October 2018

Virtual snowballing

Posted on by Adriana de Matteis

Many say: “R+ is slow compared to something like smartphones or IoT”. But the truth is that you can’t view it in the same way – we’re not at that point where we had phones and we’re switching over to smartphones. With R+, we’re at the point where we’re still creating phones. This is why we need to think about it in the longer term. With R+, it’s still about creating a market from scratch. And so when we think about this, we have to think from the beginning of the industry not from when the industry skyrocketed.

Considering this, the R+ trend is very much on track. Some analysts overhyped VR, stating that adoption rates would be much higher. This has been proven untrue but when we, as investors, think about it, we think about it as the change cycle similar to the PC industry or the mobile phone industry, not simply the relatively recent and hugely transformative smartphone one.

The idea that R+ headsets would sell as fast as the iPhone is then, an unfair comparison. If we look at adoption of other technologies such as the PC, game consoles or mobile phones in general, R+ is moving at the right pace. Now, would we like it to be bigger and faster? Absolutely. But it is picking up speed. R+ is currently in the R&D/innovation phase. It’s simply not at the mainstream adoption phase yet.

Realistically, we’re still trying to understand what is the right form factor for this technology. When mobile phones were first developed, there were many different types of phones, you only have to look at the history of Nokia to see how flippant we were with design choices back then. There were so many different form factors before we finalized on a model that worked the best for the most. Smartphones came later. So we’re still in this earlier period wherein we’re trying all these different formats, functionalities and features until we get to an optimum product for mainstream adoption. It is possible, even probable, that when Oculus releases their Project Santa Cruz next year, there will be a hardware device for VR that has the potential to go mainstream.

Different realities

There is notable variation in growth and adoption rates in the R+ market across the world, however. Consider Europe as an example, here there is region where the R+ market is especially thriving: Scandinavia. The Nordic scene is particularly strong for several reasons. The first is that there are a lot of large technology companies, such as Nokia and Microsoft, that have invested heavily in the ecosystem. But there are also many large gaming companies such as Supercell which are based there. R+ cross-pollinates heavily with the technological talent that resides naturally within such sectors – which also means fertile ground for startups. The Scandinavian countries have the right environment to make these companies grow.

Competition 

The competition in this sector is fierce but what’s really interesting is that R+ can be applied to many different areas. Of course, everyone talks about gaming and entertainment but there’s also VR healthcare, VR for industrial applications, VR for employee training and VR for education. R+ has the potential to really be a real transformative force in almost any sector. But each sector has its own barriers of entry and competition, and some are easier than others. Enterprise is perhaps the one with the biggest potential, not only for training but also for product design and collaboration. That’s where VR has been making a lot of progress.

The Ford Motor Company, for example, has been using VR for years now, and was designing cars in VR with the help of some of the most expensive VR systems. This was before the consumer resurgence of Oculus etc., back when VR systems used to cost tens of thousands to hundreds of thousands of dollars. And it made sense, because it saved them several millions of dollars. But the costs of R+ systems have dropped dramatically since then, with some costing only a thousand dollars. This means that those same savings can be applied to smaller companies, which has the potential to transform the production processes of many businesses across an array of sectors.

But when there are no longer millions of dollars of savings, where’s the gain? Why should entrepreneurs invest in these technologies instead of doing what they did before? Sometimes it has to be understood that R+ it’s not the right fit for everything. But in certain sectors, where you need 3D visualization or training or where there’s a lot of overhead primed for slashing, it can make the difference. After all, VR was initially created for the military.

You only need to look at how R+ was involved in the world of jet fighter pilots. Every time a jet took off into the air, it costs a hundred thousand dollars because of fees, manpower and other associated costs. Now, in a simulator, you can recreate those environments to give the trainee the exact same experience for a fraction of the cost. The ramifications of this in the medical world are huge. Imagine how frightful and intense a surgeon’s first surgery must be. Now imagine if they had been able to practice that very surgery hundreds of times in advance before performing it in real life? With VR, they can. Surgeons and other medical experts can experience simulations of high-risk scenarios, and hone their skills before bringing their patient under the knife.

The Amazon factor

Above all this, big players such as Amazon entering the R+ market is great news for the industry, especially in this early stage of R&D. Technologies need the support of larger companies because they bolster ecosystems. When other large companies enter the space, be it Microsoft, Google or Facebook, they do this not through internal R&D projects but through acquisitions. Amazon’s own Amazon Sumarian (a R+ content creation tool that started as an acquisition of an open source project) was sourced this way, and was a startup which the giant catapulted to heights they alone would have never been capable of reaching if they had remained an open source project.

Big players support this industry, create innovation, partner with startups or acquire them. Because of this, it has generated a very healthy R+ ecosystem – creating business opportunities for this technology and goading investments from other companies. A startup, by definition, can move in ways in which big companies cannot. While big companies often have the resources to charge growth which startups lack. With R+, there are currently many different opportunities for the growth. One story of a game helps confirm this.

Starting up

Let’s talk about the biggest startup in VR gaming right now, and one of the reasons why I’m so excited about VR. A company called Hyperbolic Magnetism has made a VR game called Beat Saber. It’s a music game. Right now I think it is on track to be one of the most successful VR games ever made, and it was created by a small three person team from the Czech Republic. The game has risen to become super successful and super popular, with the team making around $2 million dollars in the first month that was released. This was a game released solely for the high end VR models, the Rift and the Vive. By the end of this year, it will also be released on PlayStation VR. But what’s most interesting about it is that a lot of people are not just playing it, a lot more are watching it and streaming it across YouTube and Twitch – to the point wherein it’s almost become a cultural phenomenon. Much like Guitar Hero was in the past, now we are in this new kind of cultural moment for VR, with it creating a game that is unlike anything we’ve seen before in the VR space.

One important metric that we look at to see if a game is successful is Concurrent Users (CU), that is how many people are playing the game at the same time. For PC Games it’s a similar metric to DAU, Daily Active Users. The CU is a smaller number than DAU but, if we compare the CU of different games, we can tell how healthy or successful a game is, and this one is tremendously successful. Its CU base is two to three times larger than any other VR game we’ve seen. This is proving just how successful a VR game can be. This isn’t a traditional Triple A, multimillion dollar game created by some huge company like Bethesda or Insomniac. This was a true indie success.

R+ the future

Ultimately, R+ has the potential to transform how our world works. What smartphones did very well was they let everyone consume information. But even today, over ten years after the release of the iPhone, most users do just that, consume, not create. R+ can reverse this. How many people are 3D artists today? Very few is the answer. But with tools such as Tilt Brush, a room-scale 3D painting virtual reality application, many people can become traditional 3D artists because of how natural VR input can make both drawing and painting. A desktop computer lets us all become 2D designers in many ways, and before desktop computers, a select few cared about what fonts were – even fewer people had to ever put images and text together. Now, because of advancements in computing and how simple they have become to use, everyone works with images and text. 2D communication is part of almost every job.

R+ will let 3D communication eventually feel just as intuitive and natural. By our very nature we deal with the world around us and think in 3D. We remember things better 3D, it is how our brains are wired. If we can unlock that potential and democratize 3D communication, it will show how deeply R+ can impact our everyday life. R+ will be the technology that allows us to create and consume in a much bigger and more meaningful way and explore more complex content.

Project slingshot

Posted on by Adriana de Matteis

An Interview with Marc Buckley, author of Earth’s Vision, It’s Time for Sustainable Food Reform.

What is “slingshot” thinking? 

Since the first human set foot on the Moon on July 20, 1969, a lot has changed in space exploration: the entire mindset of the industry has shifted from ‘moonshot’ to ‘slingshot’ thinking. If you have a ‘slingshot’ approach you will not just reach the star or the moon – you’ll go well beyond that. In a world of exponentially growing problems, whether it’s climate change or any of the many other contemporary issues, we need to test that same slingshot approach to get us into a better, desirable future  both on the Earth and in Outer space. This could very well be remembered as the century humans land on Mars – but also the one in which we finally face the pressing environmental issues here on Earth. We’ve finally realized that our future as a species on this planet depends on Nature and that, after ages of uncontrolled and irresponsible exploitation of finite resources, our industrial production model has proven unsustainable. Climate change is the core challenge of this era, and to address it the right way, we have to step back and understand what has caused it.

In your opinion what has caused climate change? 

There are many factors involved: the main ones being energy, resources, wealth and waste. After the sustainability wake-up call, the words ‘green’ and ‘sustainable’ have started popping up everywhere, from small, non-profit organizations to big, international companies. Corporations, though, have not yet grasped the fact that sustainability cannot be bought and, instead of rethinking their business models, have merely used it as a buzzword. A marketing tool. Let me give you an example. Say you’re on the freeway and your long-term goal is to go to Rome, but you realize you’re actually going in the opposite direction: to Milan. Hence, you slow down. This is good: you’ve acknowledged your wrongdoing and taken some sort of action. Still, however, it is not enough: you’ll be going the right way only once you have stopped and made a complete U-turn or reversed your direction. The same happens with companies who claim they’re trying to be greener or sustainable: if they declare to have reduced their carbon emissions by 40%, they’re basically declaring that they’re still doing it wrong – just 40% less wrong than before.

Do you have an example? 

The food industry is an emblematic example of this incorrect approach: it’s a basic need for humans, yet it’s the main fuel of all aspects of climate change, as 30% of the food that’s produced worldwide doesn’t even get to our plates. This does not just imply the waste of the actual food, it, more importantly, reflects the true cost of each product – the water used, the materials to package it, the pollution caused by transportation.

To really break this vicious circle, we have to reconsider how goods are produced and processed – and that means going all the way back to how we think about raw materials and design. By starting from scratch, we can create a well-working, sustainable business model that also takes the planet and people into account. And that’s exactly what we’re doing at the ALOHAS ECO-Center, a sustainable food and beverage production company based on renewable energy, battery backups, ambient water, harvesting, rainwater recycling, and large-scale vertical farming.

Talk us through the ALOHAS ECO-Center.

The ALOHAS ECO-Center is an integrated system that can function off the grid. It doesn’t need finite resources nor fossil fuels: thanks to its resilience, it will still produce water, food and energy for those at the local community – no matter what happens around the world. And that’s what I mean by a ‘slingshot’ approach: with our facility, we’re flipping the switch on the food and beverage industry, opening the way to successfully feed the 10 billion population of the future without exploiting non-renewable resources. To be as sustainable as we are, companies have to introduce an inclusive, resilient business model that doesn’t rely on finite resources. Resilience: that’s the word we have to keep in mind if we really want to have a green, profitable industry. Sustainability comes along with it.

So what can individuals do in their daily lives to foster such a process? 

Being conscious of the food and beverages industry is key to solving the climate crisis and is a great first step. As end consumers, we have to take the trust we gave to big corporations back and realize that, at the end of the day, sustainability is about daily choices. An 80 cents kilo of bananas might be cheap for your pockets, but its price does not match its true cost for the planet: it means that the company which sells it doesn’t have a sustainable model where the biological and technical cycles work in harmony, as it probably doesn’t pay a decent salary to its employers, doesn’t compensate for emissions, and so on. When buying groceries, think of the true cost of products, and make conscious decisions. The markets, ultimately, always decide.

When we reached the moon, ‘moonshot’ thinking was the furthest away our minds could comprehend. However, this didn’t prevent us, no matter how extraordinary that accomplishment was, to try and go beyond that. I know that it might seem utopic to disrupt the current industrial process entirely, but applying a slingshot approach to both the space race and here on planet Earth is the only way we humans can reach the stars, both literally and metaphorically. At the end of the day, the reason we left the Stone Age wasn’t that we ran out of stones: it’s because we found a better tool to shape the world.

State of Fl-UX

Posted on by Adriana de Matteis

There has always been a certain confusion about what UX (User Experience) Design is. UX Design is supporting design with the scientific method, applying it to the design challenges we’re facing now or in the future and solving them through user-centered evaluation testing, research and combining a variety of methods to strategically attack those issues – resolving them to guarantee a better user experience.

When I say User Experience, I mean the holistic quality of a product or service and the quality in the way it is designed. Something which is very hard to describe even for users. Most of the time, to ask people to give an opinion about a product or a service is simply not enough. If you ask them, they would probably provide some vague, high-level interpretation – if it is good or bad for example – but at an unconscious level, there is so much more going on. Unconsciously, there is a so much hidden stuff beneath the surface that can only be discovered through observation.

For example, we created a mobile UX investigation laboratory at IMAGO Design so that we could go on site to people in the field: we observed users, even employing eye-tracking glasses, shadowed them and gave them diaries to record. If you just asked them with a one-dimensional question about whether the product is useful or not, you might hear an opinion that differs to what their actual experience is.

However, through a more holistic approach, you can gain insight into things not possible without. This approach counts more than ever today, especially in the field of technological design, as products are all connected. The industrial design from the ’80s has shifted towards the digital design age, wherein UX design has to be applied in order to provide a valuable product experience that today are mostly also connected to a service. The interwoven interconnectivity between these two worlds is impossible to ignore and has very important implications for education as well.

Until a few years ago, education was one-dimensional. We used to educate architects, designers, and engineers – all silo-ed in their own different worlds. But now there is so much interconnectivity, that a different approach in educating people is needed. This does not necessarily mean that every engineer needs to be a designer, but both parties need to be aware of their own unique challenges, they need to be aware of the multitude of processes, and overcome the different communication barriers that still exist in many companies. The challenge of the future is to ensure multidisciplinary education, one that is more holistic and user-centered, as this type of design is what is shaping the quality of interaction the end user has. We have to tackle this using the scientific method because this is where science can really help the next generation of devices and services.

There are many new developments which have to be included in the education system. For too long, our education systems prevailed through a linear approach. Students had to learn certain subjects, write exams and then regurgitate this knowledge onto the page. These times are over. We need people that are both in the industry and in the academia in order to approach the coming challenges – including these parties in the knowledge transmission to the other students. The system needs people who are experiencing these changes firsthand. It is so fast paced that freshly graduated students risk having an education which is obsolete two years time. This cannot be allowed to happen.

Today, there are new ways to design products which, through MVP (Minimum Viable Product) approaches and VR experience, are prototyped and tested. There’s no need to write a book about how to engineer a product to find out two years later that nobody wants it. The same idea applies to education. We need it to constantly evolve and incorporate new advances, including them within this agile and adaptable educational model. Otherwise, we will have students emerging from universities with the product and design knowledge of their professors who stopped creating decades ago.

Ten or fifteen years ago, it would have been very hard to persuade companies to embrace this approach – but times have dramatically changed as products and services have become so ingrained in everyone’s lives. This big shift towards interconnected products and services means that most people today, including top executives, have had negative experiences with digital services and therefore know how important it is to get better information by investing in a user-centric/user experience driven approach. This is all part of the interconnectivity of today, and even very senior sales or marketing people ask questions about which methods we use, what is the best prototype model etc. They all speak our language now, which is a phenomenal development.

Like I mentioned, part of the reason why they speak our language is that most clients today have experienced the bad product and design experience firsthand. They have had products fail due to lack of holistic design. This can be disastrous for a company, if you have one product on the market fail, then it is possible to survive, two or more, you are at risk of experiencing the end days.

Nokia is a prominent example of a company which stuck too long to their business models, to the development, to their ecosystem, and although they had amazing people, they couldn’t stay grounded in the reality of the user. They had become adrift in a different world. Put simply, Nokia failed to follow a user-centered scientific approach and didn’t go out to test an MVP with people. Designers stayed too long in the lab and most likely assumed that it was a good idea to push towards increased miniaturization. Only to find out, when it was already too late, that people want a big screen to display content on. By spending too much time in the labs, they missed the change happening outside in user habits. Companies today are more aware of such problems, and the result is better designs overall.

Through MVP, companies can develop products whilst concurrently selling them. They don’t require every component to be listed or built – just the core features of the product. From this, it is possible to create an interactive version of it, release it on the market and gain feedback in real time. It is a more radical and rapid approach towards product development, particularly suitable for startups because it allows them to find the right balance. If you wait for financing, it can take too long and their moment on the market could go to someone else. But if they start without it, they will go nowhere. MVPs are the in-between solution, affordable and fast. A company can launch four prototypes on the market, expose them to people and users, gain feedback and make decisions on which models should be developed further or which models have to be put on hold – all based on user feedback.

This more holistic approach is working so well that increasingly more clients choose to follow this approach. They want something to be built quickly, that is functional in one or two months, not two years.

In the future, the forms of interaction will multiply and we will choose according to availability and context. In a decade, interfaces will be smart enough to recognize with whom and in which context they are. Interfaces will adapt and will know the best solution to offer to us. The only thing they will have in common is that the successful ones will arise from a user-centric design method, ones that are both multi-dimensional and which have proven themselves through the scientific method. But we are living in a state of flux, so we must ensure that our educational systems reflect that. The screen interface will not disappear entirely, but there will be other channels we’re currently not using such as touch, gestures and, it may sound bizarre, even smell – if that’s what the users want anyway.

Understanding the dance of life

Posted on by Adriana de Matteis

Today, many worry about the power of the genome. Breakthroughs such as CRISPR-Cas9 have lead to nightmarish visions of designer babies and frightful futures. It emerged just this morning that one of the late, great Stephen Hawking’s final writings was on the rise of a superhuman race who would run the rest of us into extinction (a far cry away from his previous warnings almost twenty years ago urging us to brace genetic engineering to resist the coming robot apocalypse).

Yet the fact that these even fears even exist today are one of the reasons why we should not be so worried, for if we are already concerned with such possibilities, then it is well within our capabilities to manage them. In fact, these worries are a social issue, and bioscientists are chiefly interested in curing disease, never aiming to design something so bizarre and dystopian. Instead, genomics is really about the removal of diseases and keeping our children and (our children’s children) healthy. This is what the bioscience mission is really about.

Bioscientists are going about their mission by characterizing hundreds if not thousands of the very specific letters in the genome which give rise to dramatic disease. They can do this because it is now possible to produce chemicals that can interact with our genome and reprogram some of the faulty pathways when disease strikes.

How did we get here? As many readers will know, twenty years or so ago we sequenced the genome. The year 2000 was when we finally had the map. This was a fascinating time in history because we only had suspicions about how complex and gigantic the genome was until then.

What is a genome? A genome, in a very simplistic approximation, is called such because it is the collective identifier of perhaps 20,000 or 24,000 (it is still an open chapter in science) specifically operational pieces called genes. These genes are part of the source code that assembles a fundamental component of our body: proteins.

Proteins are the workhorse of our biology. Very specific, they are incredibly smart chemical machines which transform molecules and join together to keep us alive. This medley of interactions in chemistry, wherein proteins process sugar, creates a chain reaction that ensures all manner of things: whether our cells are working, whether the information contained inside of this article is stored inside of our brains, and ultimately all that is required to keep us alive.

One of the most fascinating elements of genomics is that with 20,000+ genes you can generate trillions of interactions that ultimately culminate in the complexity that is life. This mapping of the genome cost $100 million at the beginning of the 2000s, now it has scaled down and can be sequenced for as little as $1000, perhaps even reduced again to $500 next year. But more importantly, today we are now mapping everything post-genomics.

Post-genomics in the sense that we can also now map the dynamics of the genome, how many of these 20,000+ genes a cell uses for example – how much a liver cell uses in respect to a lung cell, to an immune cell and so forth. Not all cells use everything. This phenomenon is called transcriptomic diversity and marks, in essence, a growing understanding of the wide diversity found within and between different cells.

Advancements have also led us to a greater understanding of proteomics (a portmanteau of protein and genome), and how these specific genes become molecular machines. The fact that DNA can be folded and that genes can be spliced are two lessons from this field. With just one gene, it is possible to create more of these molecular machines – little by little we are beginning to understand the dynamism and choreography of this dance of life and how our chemistry and proteins really work.

This is allowing us to detect and understand one of the most exciting elements of human beings, the human immune system – a phenomenally and sophisticated articulated defense system. Inside our immune systems, different cells have different roles. Akin to an army: we house sentinel cells, killer cells, and memory cells, to name a few. All of these interactions are programmed through the exchange of messages between cells. The messages are written inside our genome and engage with other pieces of our genome. Understanding how these codes work and enable action is the next big challenge.

But this is just the beginning, and bioscientists are now working on merging the knowledge of chemistry and molecular design with this very large and complex system. To provide a very small conceptual picture, a drug is a molecule which needs to enter this gigantic network of exchanges and chemical steps in order to tune, change, switch off, or regulate a specific pathway which is faulty due to disease.

If we wanted to restart a certain type of cell, block one cell from interacting with another, lower an individual’s sugar production (or vice versa), or regulate a person’s serotonin production – theoretically, we should be able to. This dynamic in many ways is similar to programming. Of course, we are not at the same level of precision just yet, but we are beginning to understand what to interact with and how we interact with it.

Genomics, for example, is now becoming more efficient by developing a technique that means that we only touch one point of the genome. A lot of this is down to the development of the proteome chip, which enables researchers to quickly and easily survey the entire proteome of a cell. What this means is that we can now take a small molecule and ensure that we do not touch any of the other receptors out of the 20,000+ total. Such enhanced accuracy means that, from only a few years ago, we have now begun to understand that there are some specific dynamics that are controlling the fundamental behavior of immune systems, particularly in respect to one disease: cancer.

Cancer is an evolution game. You have a highly-genetically-unstable strain of cells that begin to depart from your standard operating mode, acquiring mutations over time. At this stage, your immune system and cancer compete against each other. What has been discovered over the past 20 years is that cancers grow specific proteins and perform certain chemical tricks to deactivate our immune systems. This was a major breakthrough that lead to the building of one of the first therapies in oncology. What it demonstrated was that by tapping a certain protein, the immune system was able to once again engage with cancer. This development completely transformed the design of oncology, instead of killing cancer, which is incredibly difficult, it became possible to reactivate the immune system, allowing it to fight back. This was the beginning of a new approach – and bioscience is now at a point wherein the programmatic ability of this technique allows us to engage both precisely and smoothly with our immune system – saving lives. This, in turn, has opened up an enormous new field of research and was due to our newfound ability to mutate our inner pathways.

The first target-driven drug was created at least 30 or 40 years ago. A target-driven drug is essentially a drug which targets the point of distress, with the drug target being a molecule in the body, usually a protein, that is intrinsically associated with a particular disease process. This can then be addressed by the target-driven drug to produce the desired therapeutic effect.

Prior to this, we exercised phenotypic screening, which was historically the basis for the discovery of new drugs. Phenotypic screening is essentially trial and error, with certain compounds creating the desired effect. When Neanderthals ate the bark of the Poplar tree for pain relief (penicillin), they were practicing phenotypic screening.

In target-driven drug discovery, bioscientists know that they want to interact with something so they specifically design a molecule to interact with that something. Excitingly today, bioscientists are delving deeper into an even more complex scale: Genomic scale drug design. Such drug design is based on the idea that the drug should not only be searching to interact with one thing but also specifically interact with it at the site of interest (a specific organ for example). This is a field in which startups are experimenting in massively, working at a genomic level to ensure that the drugs we create engage with our bodies in a much more precise and non-invasive way.

Another technological development that is making the future of drug design a brighter one is the rise of artificial intelligence. Broadly speaking when designing, there are currently two approaches. One is where you have a structured process and a set of requirements. For example, you need to design a house, so you build the foundations and the design comes organically from your mind. This is called constructive design.

The other is slightly more intriguing approach is by putting every single element of the house inside a box – the windows, the bricks etc. – shaking it about, opening it, checking if there is a house inside, and repeating the process until you have a house inside the box. This is called search design.

Curiously enough, these are two approaches which are also used in chemical research. Currently, drugs and chemicals are designed through some form of construction design or are the result of searching through millions of different chemicals until you find the one that works. AI is bridging the gap between these two methodologies. It allows bioscientists to design things which they would never have dreamt of attempting in the past: learning from millions of random data sets and witnessing design principles they may otherwise have never seen.

Sticking to the analogy, this may result in a type of house of the like no-one could have ever have envisioned – yet one which is much smarter and better designed than any other house to ever have existed. Of course, AI is not only bolstering progress in genetics, and is impacting almost every other field too. But in drug design, this is just another step towards a healthier future, one in which we should all be looking forward to dancing in for years to come.

What are synthetic embryos?

Posted on by Adriana de Matteis

Synthetic embryos are embryos which are created without fertilization​. Such embryos (also known as artificial embryos) do not require an egg nor sperm cell to facilitate their creation. Instead, these embryos rely on self-assembling stem cell structures to mimic the natural process of early human development.

Three years ago, a mechanical engineer from the University of Michigan was working with human embryonic stem cells and experimenting with ways of getting the cells to form more organized three-dimensional structures. To do this, he grew them in scaffolds of soft gel – searching for signs of primitive neural tissue.

Then something unexpected occurred – the cells arranged themselves much faster than predicted, and in just over a few days, they formed into a lopsided circle. This little bundle of cells was, unnervingly enough, an embryo.

This work is all part of a growing field in science: organoid research. In this field, scientists use stem cells to create clumps of cells that mimic the brain, lungs or intestine. The mimicked mini-organs are not by any means the real thing. Instead, they’re far smaller and less sophisticated – but they provide insight into their nature. These developments allow scientists to see how these cells react in real time to various drug compounds or genetic modifications, and more generally, examine how living cells develop and function.

Embryonic stem cells were first isolated in 1998 from spare IVF embryos, the cells themselves are particular in the sense that they are a blank-slate: they can create any other cell in the body. By 2014, this had begun to change, as researchers began to witness evidence that stem cells might, if given the right cues and context, be able to replicate the earliest embryonic events.

Two years after the University of Michigan’s discovery, MIT reported on the matter. Noting that the cells could never feasibly become a person as they lacked the cell types needed to make a placenta, a heart, or a brain.

Enter 2018, and a team from the University of Cambridge (led by Professor Magdalena Zernicka-Goetz) who have pushed the creation of synthetic embryos a step further. Researchers used mouse stem cells to produce synthetic embryo-like structures capable of ‘gastrulation’, a key step in the life of any embryo.

“Proper gastrulation” Magdalena Zernicka-Goetz notes “in normal development is only possible if you have all three types of stem cell. In order to reconstruct this complex dance, we had to add the missing third stem cell”. Gastrulation was once described by eminent biologist Lewis Wolpert as “truly the most important time in your life”.

This marks a massive progression in this field, as up until 2017 the same team were only capable of creating a much simpler structure resembling a mouse embryo in culture, using two types of stem cells – the body’s ‘master cells’. Proper gastrulation in normal development is only possible if you have all three types of stem cell. Which is exactly what this team has done: they have brought together all three stem cell types that form the basis of a fully formed embryo.

Researchers now hope that this will allow them to better understand how the three stem cell types interact to enable the embryo to develop as they can alter the biological pathways of one cell and see how this affects the behaviour in the other one(s).

What does this mean in terms of humanity? It means that scientists can study events that happen beyond day 14 in human pregnancies, but without using 14-day-old human embryos; UK law, for example, permits embryos to be studied in the laboratory only up to this period. The early stages of embryo development are when a large proportion of pregnancies are lost and yet it is a stage that we little is know about. These developments, allow us to “study the very earliest events in human embryo development without actually having to use natural human embryos”, Magdalena Zernicka-Goetz explains. As the UK law demonstrates, this is of course a field which is littered with ethical problems.

Earlier this year, Harvard university’s own The Embryonic Stem Cell Research Oversight (ESCRO) Committee released a report noting their concerns in monitoring the ethics of this emerging technology. A worthwhile read, the report discusses four main ethical considerations in dealing with the artificial creation of life.

The first is concerned with the potential for these clumps of cells to represent the human form. They may not be sentient, but they may look like it – what does this mean us and our ability to perform tests on these potential beings?

The second consideration is how this technology will effect human reproduction. There are of course technologies that exist today which facilitate human reproduction, but we stop short at cloning individuals or implanting genetically modified embryos into a woman’s womb. Where do synthetic embryos sit on the scale?

The third point of review is focussed on the possibility of creating a synthetic human embryo with the property of self-consciousness. An ethical concern for other technologies such as artificial intelligence, the question of bringing a being into an awareness of existence is one we have yet to answer.

The fourth point is sentience and is tied closely to the prior point. If we were to create a synthetic embryo, how sure could we be that it would never experience pain or suffering. We generally believe that pain as an experience rather than a simple physiological response is the sign of an intelligent, advanced lifeforms. How could we ever be sure not to create that?

The words of Professor Magdalena Zernicka-Goetz are not ones which lead us to believe that these questions are ones from some far distant future. In fact, what these developments ultimately mean is that these “artificial embryos underwent the most important event in life in the culture dish. They are now extremely close to real embryos.” Thankfully as a precaution, those working with the “embryoids” have been destroying them using a bath of detergent or formaldehyde to make sure they don’t develop any further – so we can all rest easy.

Exploring new creative agency models

Posted on by Adriana de Matteis

Decades ago, advertising executives sitting at traditional office cubicles couldn’t have predicted the industry as it stands today. The wondrous world of advertising has been flipped on its head and forced into innovation more than once.

Content Content Content

2017 was the first year online advertisers outspent TV advertisers by $30 billion on a global level. In 2018, this trend will continue and the spending gap will further grow to $40 billion.

The growth in internet advertising is being driven by social and video display ads, like those we’ve become accustomed to on Facebook, Instagram, and YouTube. Needless to say, all of this growth is taking place on mobile, which grew 25% this year, garnering 60% of all internet ad spending.

The internet first, and mobiles second, have revolutionized advertising in the most astounding way. Not only have they changed the way ads are broadcast, but they’ve changed the way brands and consumers interact with them. The fast pace of the digital age, content creation, and everything that comes with it, is constantly shifting.

In the early ages of advertising, brands were producing one or two large campaigns per year, investing heavily in large productions and betting on premium TV placements. Today, 60% of marketers create at least one piece of content every day.

As a matter of fact, since the 1970s ad exposure grew from 500 ads per day to 5,000 a day in 2018. While the lifespan of an ad has reduced drastically, the businesses that create content regularly are consistently seeing better results in terms of traffic, awareness, and ultimately conversions.

Content consumption keeps growing as new media and new mediums keep evolving. Every day, we watch more than 100 million hours of Facebook video content alone, and there are over 800 million people looking at Instagram stories. As a result, new and varied creativity needs to be constantly developed in order to keep audiences engaged. One of the most exciting challenges and opportunities for every brand will be understanding how messages work across evolving formats.

Following this shift to a more fragmented, and digitally-driven world, brands are changing their approach to marketing and content creation as they increasingly act as publishers.

As part of this process, brands are also re-evaluating the relationships they have with their agencies. Brands are recognizing that in a digitally-led, tech-enabled world, there is no longer a need for complex and rigid agency structures. Instead, it is more important to have an agile team that can rapidly develop campaigns or content, that can be deployed regionally, nationally, or globally.

So, with so much change happening across the advertising industry, the question facing many is: what’s the right agency model going forward? There is no blueprint, but there are some important considerations to take into account when building a new agency model.

There are currently four different models that are on the rise: 

  • In-house agencies
  • Consulting going creative
  • Small boutique agencies
  • Decentralized agencies

Each model has its strengths and weaknesses, and taps into the unique needs of different types of target clients. All have made their place by representing a change to the status quo, and plan to do so for the foreseeable future.

In-House Agencies

In-house advertising agencies are on the rise as marketers look for more effective and cost-efficient ad models.

According to research from Forrester and the In-House Agency Forum, a few years ago most marketers that replaced or supplemented their external agency with an in-house agency, prioritized cost savings and speed. Today, cost efficiency and speed are still hallmarks, especially as marketers need to produce more digital creative work at a faster pace. However, they aren’t alone in driving the in-house trend; the other key element is having a team with a deep “knowledge of the brand and of the business.”

Marriott Hotels and Resorts might be the best example of how the in-house agency model can become the next frontier for brand marketing. In 2014, Marriott launched a global creative and content marketing studio to handle internal work for its portfolio of 18 travel-related brands. The first step towards that model was hiring David Beebe, a former Disney-ABC Television executive and producer, to lead the initiative.

Following his lead, the in-house division was structured in three parts: 

  • content development, which is the personal creative agency;
  • production, or the entertainment division responsible for video content ranging from Web clips to TV shows;
  • distribution, a real-time marketing group that monitors social media to ensure immediate interaction with trending topics.

Fast forward four years: the model has been growing well, becoming a reference for content marketing and storytelling within the travel space, as well as collecting several advertising awards.

Marriott isn’t the only brand running a successful in-house studio, this year the most acclaimed was Spotify, and Southwest Airlines, Unilever, and Chobani have been making notable strides as well.

The most fascinating part, however, is that in-house agencies still often hire external agencies. So, as companies continue to do more marketing on their own, a future role for external agencies might be to recognize that if a brand wants to take a service in-house, their new job may be to adapt quickly and help the in-house agency, rather than hinder them.

This trend is already gaining prevalence as agencies are increasingly helping their clients find talent for internal creative roles. In some cases, agencies are even adding their own talent services to assist clients. This has proven a successful long-term strategy as agencies foster relationships with creative allies on the inside.

That being said, the weakness lies in the simple fact that talent acquisition and retention remains one of the most crucial challenges facing in-house agencies, as most top creatives won’t be attracted to working for the same brands over and over, often within very large and bureaucratic companies.

As Libby Brockhoff, CEO of Odysseus Arms put it: “It’s a fantasy to believe that creative people can show up to the same place day after day and produce brilliance. In my experience, creative people need shiny new objects and quirky environments — not a single product, job security, and stock options — to produce their best work”.To recap:

  • In-house agencies pros: cost saving, speed, better brand knowledge
  • In-house agencies cons: hard to attract and retain top talent, conservative creativity

Consulting Going Creative

In 2018, for the first time ever, four consultancies cracked Ad Age’s ranking of the 10 largest agency companies in the world.

Consultancies are seeking to buy their way into the creative game via acquisitions. Up until a few years ago, firms mostly stuck to buying agencies with expertise in web and mobile development, and user experience design. But the game changed in 2016 with three big creative agency acquisitions lead by Deloitte Digital (Heat), IBM iX (Resource/Ammirati) and Accenture Interactive (Karmarama).

In general, consultancies have several competitive advantages over traditional agencies. Namely, consultancies can leverage their long-standing relationships with brands. As they pitch for new or more business, they are usually going top-down through CEOs, attracting less attention from procurement, even though they are usually very expensive.

What’s more, brands are known to gravitate towards a more integrated approach, getting to collaborate with partner executives that have a very deep understanding of their business and goals.

One of the most important selling points might just be the simple fact that consultancies have been able to collect deep, actionable consumer information for decades for most of their clients. This means that they can now build data-based campaigns and support brands to foster more direct, customized content for their audience.

That’s what recently happened to Deloitte and its newly acquired agency Heat when they won the pitch for the global campaign of the LG G6 launch. “When we first met Heat during the pitch process, we knew they were a great fit based on their work,” said Suyoung Kim, LG’s Global Marketing VP. “With the added insight from Deloitte about our business, and what we were already doing in the marketplace,” tapping Heat for the launch was a no-brainer, he said. “The workflow is seamless. The connection between our business strategy and marketing strategy is extremely helpful. We are able to save time and resources by working with one business instead of several to get what we need.”

But not everyone agrees that consultancies will be able to take on the agency world: it’s not easy to go from suit and tie, to white t-shirts and Vans. Aaron Shapiro, CEO of Interpublic digital agency Huge, agrees. “Consulting firms lack the creative and entrepreneurial culture that attracts the best design, digital and creative talent,” he said. “Those that do join quickly find out they’re not in an environment where they’re able to do great work; they’re not in a place where great work is even appreciated.”

To recap:

– Creative consulting pros: integrated, data driven approach, business knowledge

– Creative consulting cons: no creative blood, high rates

Smaller Boutique Agencies

At a time when many brands are reducing fees and cutting back on agency rosters, there is an opportunity for smaller shops to gain traction with big brands.

In fact, the smaller shops have trimmed the fat that clients don’t want to pay for and can make their own decisions since they’re not beholden to a parent company.

Moreover, the traditional retainer model doesn’t have to apply in this case. Most boutique agencies are flexible enough to work on a project by project basis, enabling brands to be “free to experiment” without committing to a specific partner (such a millennial thing).

Boutique agencies are also better at adapting to the client’s needs and structure. Increasingly, clients are asking to be part of the creative process. They want to collaborate, iterate, and ultimately feel ownership over the outcome, which makes them more likely to champion it.

Last year General Mills, which is one of America’s largest advertisers, picked a diverse lineup of smaller shops to handle assorted projects for them. “In looking to round-out our roster, we met with dozens of interesting agencies and were wildly impressed by the breadth of talent out there,” said Michael Fanuele, former General Mills VP and Chief Creative Officer. “The industry is teeming with small agencies of every variety doing really powerful work. We’re very excited to work with these three agencies. We’re confident they’ll help us crack great creative work for our brands, and they’ll do so with ambition and generosity.”

Smaller agencies have also been able to attract a wider range of creative talent by providing a more dynamic environment, where creatives feel that they can have a real impact.

One weakness for boutique agencies lies in the premise that they are not always the best candidates for taking on large projects, especially if a global scope is required.

To recap:

  • Boutique agencies pros: lean structure, more flexible approach, great creativity
  • Boutique agencies cons: lack of scalability and global reach

Decentralized Agencies

Thanks to coverage of the illusive crypto market, decentralization has become quite the buzzword. This term can also be applied to creative agencies, and defines an atypical model based on the combination of 5 main elements:

  • No in-house creatives
  • External professional creative network
  • Scalable global teams
  • Great project management capabilities
  • Deeply rooted in technology

In other words, decentralization could be seen as the evolution of crowdsourcing towards a more professional, technology driven approach. A model that allows brands to gather creative content on large scale while keeping an optimal level of quality at an affordable price point.

At Zooppa, one of the first examples of decentralized agency, we have built a large professional creative network that resides in over 87 different countries. Diversity is our mantra, with 30% of our creative directors being female – compared to a mere 11% in the industry. That, and we have over twelve-thousand recent graduates that are just entering the advertising world.

This diversity and scale allows brands to tap into different perspectives and approaches for every project they want to develop. They can adapt to the demographic they are targeting and can gather content and insights from anywhere in the globe.

At the core of Zooppa’s team stands a group of project managers that are the main interface for both the client and the creatives. Their role is to support the brands throughout every phase of the process, from brief definition, to strategic guidance and creative team selection. At its core, the principle of the decentralized agency is that we assemble the best possible team, on-demand, for every single project, based on skills, expertise, location, and equipment.

Zooppa collects and leverages all of that information through our proprietary tech platforms, which allows us to scout the best creative teams for each project, as well as manage the execution in an efficient and lean way.

The advantage on the client’s side is clear: no overhead costs, different creative perspectives, global reach, and scalable production volumes.

These key values allowed Zooppa to score several different projects with top brands, such as the TVC for Amazon Prime Photo, seven different campaigns for FCA, 2017 season ticket campaign for F.C. Inter, and the Media Day coverage for the National Basketball Player Association.

Recently, we executed a videos series campaign for eHarmony, a leading brand within the online dating space. After defining the strategy to support the launch of new features in their app, as well as increasing the downloads, we engaged eight different creative teams to pitch concepts and storyboards. We supported the client in selecting the three pitches most in line with their goals and moved forward with the production process.

At the close of the project, Candice Na, Senior Marketing Manager of Acquisition at eHarmony said “Zooppa’s production process was seamless and affordable, and it’s why we came back multiple times to get meaningful content created with top-notch directors. While we’re over the moon about the finalized spots, we’re even happier that viewers are enjoying and responding to the stories too. In a recent test, we saw as high as a 200% increase in brand search for people who viewed the video vs. those who hadn’t. I’m optimistic that we’ll have a long future with Zooppa and their filmmakers.”

Decentralization also means full flexibility both on the approach and the outcome. At Zooppa, we currently have an ongoing collaboration with a leading software house, Bending Spoons. We help them with performance marketing by creating 40-80 videos per month to promote and drive downloads for their mobile apps. In order to achieve this, we have built an ad-hoc process based on the engagement of three creative teams that follow very specific production guidelines to deliver custom content on a rolling basis. Each video produced costs less than €1000 and is ideal for A/B testing on social media.

The results speak for themselves, Bending Spoons is now the #9 app developer for daily downloads in the world, right next to Snapchat, proving that creativity does not always need to be expensive in order to drive results.

Often, we collaborate with large agencies to support and boost their creative efforts, allowing them to reach the scalability they need without making their structure heavier.

There are other larger agencies that are developing their own decentralized models, such as BBDO that launched Flare Studio. Publicis is approaching decentralization of knowledge through its newly introduced AI, Marcel, that allows – among other things – for all 80k employees to be connected and share expertise and skills for specific projects.

To recap:

  • Decentralized agencies pros: lean structure, creative diversity and scale, flexible structure
  • Decentralized agencies cons: more involvement on the client side

Conclusion

“There’s the age-old axiom that out of better, faster, cheaper, you can only have two. Those days are over.” says Wendy Clark, CEO of Omnicom’s DDB “The new model, in the next few years, will be to create great work at the speed of the marketplace at an efficient cost. To do so, creative agencies will adopt more technology, communications planning and media services”.

It’s hard to say what model will prevail, and how the agency of the future will be shaped. Coming up with successful conclusions, starts with asking the right questions. As Clive Sirkin, Chief Growth Officer at Kellogg’s suggests, creative agencies need to ask themselves: are you going to invest in building massive content machines or in high-level strategic thought leadership? Are you going to invest in content execution or are you going to invest in high-level operational general contracting that wires the pieces together? Are you going to invest in loose creativity or hard-driving behavioral science, predictive modeling and analytics?

I hope that some creative answers will come and new interesting models will appear to face the ongoing challenges and the many opportunities that the market is offering.

A guide to life insurance for millennials

Posted on by Adriana de Matteis

According to a recent study, 29% of millennials would rather save their money for a vacation instead of taking out a life insurance policy. So far, companies have failed to engage the largest living generation in a service that, given current market instability, might be more crucial for them than it was for their parents. But something is changing.

It seems that when the word millennial is uttered, we immediately think of young kids just getting started in the world (and depending on who you are, a set of negative stereotypes.) But the truth is, half of millennials are in their thirties and are well on their way to raising families and becoming one of the most impactful generations in our history. Millennials are changing the workforce and doing things differently, but not all of that difference is positive. If you are born between the years 1980 and 2000 you probably don’t have life insurance — and more likely than not you have yet to even take into consideration the idea of purchasing one. However, today people are living longer than in the past, and the younger generations are starting their families later: such factors would reasonably make one think the exact opposite. Why is this happening, then?

Well, we know that millennials and Gen Z are not used to the bureaucracy and complexity of the past, let alone the process of taking out a life insurance policy – many in this demographic would rather just not think about it. But this is not the only reason behind this growing trend. This lack of interest is primarily caused by the insurance companies themselves.

As consumers have become more acquainted with online shopping and as e-commerce services blossomed into the de-facto means of purchasing, companies from industries ranging from retail to banking rebranded themselves and adapted to this new, digital world. This ultimately grew their businesses and helped them to reach new customers thanks to their more streamlined and sensible models. Insurance companies, on the other hand, believed that digitizing documents and uploading them online would be enough to engage younger audiences. It wasn’t.

These companies continued to rely on an outdated salesforce and focused on streamlining internal processes while their product and marketing remained stagnant. However, in this scenario of a seemingly irremediable, low engagement rate, it must be acknowledged that creating innovative products in the insurance industry is no easy task – one made all the more difficult thanks to the strict regulations that currently rule it.

In some sectors of insurance, we have seen murmurings of innovation: pay-as-you-go car insurance and pricing-comparison engines are good examples. However, in the realm of life insurance, most innovation has come on the underwriting side, where data has allowed some policies to be written without a physical examination. The sales process is still the same: To buy life insurance, you still have to go through the tedious, time-consuming process that pre-millennial generations did. There are still far too many middlemen, long applications and eternal waiting times. From the insurance carrier to the broker, the process is bogged down in data and information verifications which still take too long to complete.

At Tomorrow, a financial wellness company my partners and I created in order to engage younger generations, we identified several aspects that help guarantee success in today’s insurance market. These included a user-friendly service which cuts out the middlemen; shortens and automates the underwriting process, guides the customer in understanding regulations, as well as selecting the most relevant product. Enhanced user experience design is key in ensuring engagement and critical in any insurance business that wants to survive the digital revolution.

Tech solutions are finally finding their way into the insurance industry but, needless to say, there is still a long way to go. And we see this in the worlds of insurance as well as in the world of estate planning, where Tomorrow offers a free legal will, which you can create in an app. Despite advances in electronic contracts, a legal will must still, by law, be printed off and hand-signed, and then placed in a drawer for someone to find. In the US, digital wills are considered invalid.

On the other hand, the verification of a client’s medical record or credit report is still extremely time-consuming, and perhaps a shift from third-party source data to proxy (real-time) data could help change this thanks to improvements in AI. The blockchain’s tokenization principle and its full-proof, verification, guarantee is another avenue worth exploring.

Change will come, but it might take up to twenty years to be effective: eventually, as in many other industries, innovation will arise out of necessity. Being part such a complex industry, insurance companies will probably join forces with tech companies and startups, merging legal and digital knowledge in order to stay relevant to the consumers it aims to help – especially the younger consumers who need insurance most.

Join the chain gang

Posted on by Adriana de Matteis

Much like how the technology used in microwave ovens was stumbled upon whilst developing radar, blockchain too was brought into the world as a means to an end rather than an end in itself. The technology was originally created as the underlying layer to the first cryptocurrency, Bitcoin. It fulfilled its purpose admirably, making Bitcoin the first hack-proof, sustainable digital alternative to fiat currency. Arguably more importantly though, it proved that decentralization in the digital era was achievable.

Gradually blockchain came out of the shadows and assumed an identity of its own. Instead of playing second fiddle to cryptocurrencies like Bitcoin, the technology emerged as an interesting, if the somewhat provocative solution to a vast array of applications and use-cases across a number of industries, many of which are yet to be explored and many more which simply don’t exist yet.

Indeed what started as ‘the Bitcoin revolution’ in the late 2000s has very much evolved into ‘the blockchain revolution’, and it’s a revolution that is still very much in its infancy. An increasing amount of people now recognize Bitcoin as simply the first application to be built on a blockchain and that it is by no means the best one. Several of those people are business owners and decision makers eager to carve out an edge for their companies, operations, and products. In this article, we’ll be exploring a few ways blockchain technology can be used to do just that.

Blockchain is a subcategory of the broader term ‘Distributed Ledger Technology’. To learn more about the distinction please visit the nakamo.to Knowledge Base. For the sake of simplicity and brevity, I’ll be using the word ‘blockchain’ throughout this article.

It’s Magic, You Know

The double-edged sword for most new technologies is that they’re, well, new. Anything novel in an industry which evolves, changes and disrupts at the rate that the tech industry does is bound to attract all kinds of attention very, very quickly. To outsiders, this creates somewhat of a smokescreen. All new tech gets a similar reaction, so how is one to tell between the gold and brass before the opportunity to gain an advantage dissipates?

This has been a daunting task for companies of all sizes when sizing up blockchain technology. On the one hand, it is the deafening criticism of blockchain paired with a seemingly endless list of scams, fads and marketing stunts, and on the other, talk of the technology potentially completely revolutionizing businesses and industries. This leaves decision makers with a tough dilemma. Either take the plunge and risk jeopardizing the company’s image while burning though goodness knows much money, or do nothing at all, and risk your competitors running away with the first mover advantage while you sit and contemplate what might have been.

So blockchain, gold or brass? No prizes for guessing what I’ve gone with in this article. After over eight years in the cryptocurrency and blockchain space, I’ve seen, tried and tested enough to be sure. Blockchain is the first form of ledger to eliminate the need for a third party. It makes it possible for a ledger to be distributed among all those using it, putting the responsibility to maintain and validate it in the hands of those using it. The result is a decentralized system of data registry where transactions are instant, transparent, reliable and incorruptible. It is the first system to bypass the need to trust one another when conducting transactions of value — the implications of which will be profound and far-reaching.

Let’s not get carried away, though. Blockchain will not solve all of our problems. It’s a powerful tool yet still has a long way to go before its true impact can be felt. It’s functional, but it’s not yet refined. However, it’s time will come and we can predict with reasonable accuracy what that will look like and where it might be applied. With that in mind, decision-makers the world over are exploring what problems blockchain is best suited to solving, how it can be applied and measured and where it would be the best fit.

Blockchain: Does it fit?

As with most things, to understand whether blockchain is a fit for a business, one must start by asking the right questions. Possibly the most important one to get right is ‘does blockchain fit my business needs?’ rather than ‘how can I fit blockchain into my business?’. But before one can even begin contemplating how blockchain can be used to one’s benefit, we first need to fully understand what the technology is capable of. To see how blockchain can help businesses we can start by looking at blockchain’s capabilities and characteristics:

1. Record Keeping

As a distributed ledger, a blockchain records events such as product shipments, sales, and transactions of all sorts, and ensures each user in the network always has the same, immutable version of the ledger and its records.

2. Decentralization

A blockchain is not only distributed but also decentralized. In other words, no single entity controls the blockchain – in the case of public blockchains, at least.

3. Accountability

The blockchain confirms ownership of any asset recorded in its ledger. It maintains a record of past and current ownership, and the changes in ownership throughout the asset life from the start of the blockchain.

4. Immutability

Information and/or value – whether events, transactions, assets or other, recorded on the blockchain cannot be changed. At most, new information can be recorded to change the status of the record, but previous information will still be held in the ledger.

5. Finality

Although it exists in multiple identical copies (one per blockchain node/user), there is only one ledger for the blockchain. What goes into the ledger is decided by consensus between the nodes. Once recorded, it becomes the one and only source of truth.

6. Autonomous Applications & Contracts

Distributed applications (Dapps) and smart contracts running on a blockchain can automatically trigger actions such as buying, paying and making access available, when predefined conditions are met.

Reaping the Rewards

Businesses need more than just novelty to compete and remain profitable. They need tools that give them practical assistance in meeting their business needs while being sufficiently affordable and easy to use. We should start by asking what our businesses need and what difficulties they experience in operating and performing today – and then see what blockchain can do to help.

Enterprises typically aim to do four basic things: grow their business, improve their profits, avoid going bust and stay within the law. For most of or even all these objectives, solutions of sorts already exist. If they don’t, then the companies in question have likely already stagnated, been bought out, or shut down, or are on that path. However, these solutions, like most things in life and business, can be improved upon. With the aforementioned four main objectives in mind, we can explore what blockchain technology may do to change, improve or completely revolutionize business operations and services.

Growth

If only to combat inflation, businesses must achieve some growth. Most enterprises strive for more growth than this though, whether to serve their market better, make more money or compete more effectively against competitors. Blockchain’s contribution to this can be multifaceted.

Sell more. To grow, businesses can sell more of their existing offering, add new products and services, or do both. Blockchain enables enterprises to extend into a whole new world of ‘Product as a Service’. For example, renting industrial machines on a pay-per-usage basis, instead of asking customers to buy them outright. A smart contract can automatically unlock access to a machine, after initial rental payment has been received, and calculate final charges according to usage. Blockchain integrity ensures billing and payment information is always correct.

Go global. Like it or not, business is being globalized and has been for a while now. A blockchain provides business partners in different places with one standard way for recording transactions in which no single party has a monopoly of control. Whether companies source materials in Argentina, do their manufacturing in Bulgaria or use a distributor in Canada, blockchain keeps the books straight and streamlines operations.

Engage customers. Customers who are positively engaged with a solution or a business tend more loyal and give better recommendations about the solution or business to their peers. Blockchain can be used to increase engagement by allowing customers to do more for themselves and save money, without eating into the profitability of an enterprise. As one example, insurance companies have developed micro-insurance solutions powered by blockchain for making claims. These not only enable better service for claimants but also help the companies save on staff costs internally. Tailored options are the natural next step.

Attract investment. Blockchain also provides a safe, efficient, and trustworthy platform for recording funds collected from many smaller individual investors (crowdfunding), instead of having to go cap in hand to one bank or large investor.

Efficiency

As the saying goes, ‘sales are vanity, profit is sanity’. More than just selling more, enterprises must ensure that they also achieve suitable levels of profitability. Efficiency is at the heart of profitability. It also happens to be a key strength of blockchain.

Save on costs. Proven, effective blockchain technology helps link legacy systems with business networks without large system integration bills. The possibilities for automation in and over blockchain mean savings on manual operations that are often more expensive and less efficient.

Accelerate transactions. Financial transactions using conventional methods such as SWIFT interbank transfers may take days. For today’s pace of business and with current rapid fluctuations in exchange rates, this may be too long. By comparison, depending on the blockchain technology used, financial transactions via blockchain may take only minutes, and one day possibly no time at all.

Improve visibility. Complex supply chains are part of many enterprises. They have many moving parts and risks of errors that are multiplied when suppliers and business partners join in. Blockchain makes it easier to track supply-chain progression, allowing users to easily identify all kinds of manipulation and fraud.

Resilience

Whether you call it resilience, business continuity or some other related term, it’s all about enterprises being able to prevent or recover quickly from adverse incidents. A big advantage of blockchain is in prevention. As an immutable record of all past events and transactions, it can be used for recovery too.

Prevent fraud. Trustless blockchain systems use cryptography to ensure that records are unfalsifiable and that digital money can only be spent once. For example, the blockchain powering Bitcoin was designed on the assumption that nobody could be trusted and that it was up to the blockchain system to be intrinsically accurate and tamperproof in its operations. This lives on as a viable, powerful advantage to using blockchain.

Protect assets. Intellectual property (IP) is an increasingly important part of enterprise assets. Businesses depend on their IP for competitive advantage, sales, and profitability. Blockchain with its immutability can record details of IP and ownership, providing incontestable proof when required of the sole rights of a business to use its IP.

No single point of failure. Because blockchain is decentralized and runs over multiple distributed nodes, it does not matter if one node disappears, either by choice or because of a breakdown. The other nodes continue to run the blockchain protocol and record events or transactions by reaching consensus among themselves. If the other node reappears, it will simply start again with the most current version of the blockchain ledger. One supplier failing in a supply chain blockchain will not stop the blockchain from working correctly for the others.

Regulations

No business is completely free to do what it wants. Somewhere, whether for employee safety, environmental protection, product quality, or other aspects, there is a regulation to be respected. Blockchain’s accountability and immutability are an auditor’s dream come true and a smart solution for proving a business is on the right side of the law.

Traceability. Government agencies require it and customers often demand it. Were materials sourced ethically from suppliers respecting workforce safety and reasonable wages? Were perishable products like food or pharmaceuticals systematically kept at the right temperatures? Events and transactions logged on a blockchain can show unequivocally what happened.

Financial probity. When accounting and financial systems log each event and transaction to a blockchain, clean financial conduct can be demonstrated and scandals like Enron avoided on all scales, large and small. Regulatory sanctions such as fines or jail sentences are not the only items at stake. The reputation of a company is also critical in determining whether customers want to buy from it. Blockchain can show the truth and help honest enterprises to maintain or restore their good reputation.

It’s just the beginning

Properly utilized, blockchain can do businesses a world of good. The examples above are just a few of the wide-ranging applications of blockchain in business. Naturally, there are many things that it cannot do. For example, don’t look to blockchain to help you figure out market trends or optimize product or service design. There are other tools to answer those questions.

Choice of Distributed Ledger Technology is also a crucial factor. While blockchain, in general, can bring a business the advantages listed above and many more, different designs exist which are suitable for different needs. You may need to make tradeoffs between transaction speed, transaction transparency, and identification of the participants in a blockchain – at least for now.

With that in mind, you’d be well advised to proceed as we have done here. First, clearly identify your business needs and objectives, which themselves are likely to be driven by market trends, customer expectations, and regulatory obligations. Next, examine blockchains and their specific characteristics to see which one fits your needs best. Then, plan your business blockchain system, implement it, and reap the benefits. Keep in mind, however, this is just the beginning.