Digital transformation – ever heard of it? Its a term we have heard over and over again in marketing hype. Most businesses offer their goods and services through digital means today called eCommerce. But delivery is a different matter. Physical redemption of digital orders is difficult and fraught with fraud. This is why physical coupons are still used at the supermarket. How about how coupon codes for eCommerce sites are being shared on the internet? Enterprises want the speed and ease of digital but with the control of physical. This is where tokenization comes into place.
Tokenization in a nutshell
Tokenization is where you wrap a web3 NFT around the redemption of a physical good or service. Think of it as a digital IOU. This allows businesses to sell at demand. Then “delivery” is split. The consumer gets a token to be redeemed later. Then the redemption can occur when the physical good is available. Redemption can be a simple CRM integration.
Separating sale and delivery in this way provides flexibility in the business model. This concept works on public or private blockchain. It is universally available today. The downside is trust – the consumer must trust the brand to deliver. This is what plagues the current business models of kickstarter and indiegogo. Web3 addresses that this by having authorship listed. Consumers can know if tokens are legit. Brands need to use web3 standards and legal documentation to address consumer trust.
Business Case for 100% Digital
Going fully digital means the opportunity to automate. Look at during the recent pandemic. Digital service offers like zoom skyrocketed in value. They offered a 100% digital delivered product; scaled in the cloud and sold online on-demand. The results were a great product meeting the market opportunity fully. How many sales do you lose because it took too long to get back to the customer? How many consumers give up because delivery time is too long. With tokenization, you can meet your market demand on-demand like zoom. No matter your product or service.
Why Web3? Because of Napster
As the consumer must trust the brand, you must trust the method by which you are tokenizing your value. You do not want to forget the lessons from the music industry of the 90s. Napster and mp3s created enormous pain and obstacles towards digital transformation. Without the control, you could be held liable for scammers and pirates. There is no point in creating offerings in the digital domain, if you cannot be sure you will get paid for it. Web3 has the bi-directional trust built in to ensure you control what you create.
My favorite use case: Pre-order
Preorder is something that many brands fail to take advantage of. Kickstarter and Indiegogo are popular examples of this model. Consumers can buy an idea with the promise that the brand will deliver the product once its manufactured. This sense of community and sponsorship has propelled these services to bootstrap many startups. Tesla does preorders all the time. Cybertruck orders are in their 4th year. That is a lot of consumer trust! I have talked to a major auto manufacturer. They told me that 21% of pre-orders fall through due to consumers getting impatient.
Web3 and tokenization can offer key benefits and communication to keep consumers engaged. Perks and loyalty plays can enable better revenue retention. Web3 makes this use case work better, because brands and consumers have trust in the infrastructure. I see this trust as instrumental to the success of tokenization. Just like SSL changed the game in eCommerce, Web3 will change the game in digital transformation. The question is what game do you want to change?
What Tokens Do You Want to Sell?
Tokenization is a powerful way to digitally transform your business offers. Web3 provides the trust and flexibility needed for digital transformation. You can confidently explore new business delivery models used in the marketplace today. Building tokens is easy on web3. Managing your web3 assets can be tricky. Do not be afraid to ask for help. With proper guidance and support, you can find your north star in tokenization. Hit me up on messages, I would love to hear about how tokenization can help your business.
Have you heard this before? The product development started great and we made our first milestone. BUT, ever since then things have gone off the rails.
Or how about this one? Our technical debt is unsurmountable, our only option is to depreciate. We are seeing horrible retention rates. How did things go so wrong?
Customer experience (CX) is about delight. Making the consumer of the application happy to use it and be in awe of its value to them. Novelty will only get you so far. Reality will hit your user community. Bugs will disappoint. Depreciation of keys features will enrage them. Upgrade paths that are no different then rip & replace will lose you customers. CX is about delivery of quality software. The better the software, the better the experience.
We all know what great software is. We all understanding the benchmarks. The problem is achieving those benchmarks. How do you avoid the primrose path of product development? By understanding, embracing, and enforcing sound engineering best practices.
What is Your Dream?
Let’s start at the beginning: ideation. This is where you define your vision. Who is the consumer? What is their journey? What is the market: from a price, value, and definitive profit opportunity. We live in reality, what are your acceptable trade-offs? How are you going to sell this product? What are the marketing materials required? What is the go-to-market strategy like market segment and demographics? What timelines do we have?
This will allow software creation within the constraints of the business. This means budgets, roles, responsibilities, and investment requirements. Hopefully you have heard “no bucks, no Buck Rodgers” — its as apt now as 50 years ago. This vision will allow your team to make good decisions. The vision is what creates and enables business alignment. When aligned, we can begin creating value.
Realization is Better than Building
Developing a software product is sometimes called sprinting. I see it an appropriate term. To generate business value, you will want to set a short-term goal, work on it, and measure if you made that goal. What is the release strategy? What timelines do you have, that defines the goal setting. Remember the marathon is the release. Segmented sprinting will get you there with the least amount of technical debt possible.
What is technical debt? Product Manager’s boogeyman. That is wasted productivity. When you ask to build something that provides no business value, it is a waste. If you have to re-write something in the future, it’s waste. Eliminating or minimizing technical debt is a key feature of quality software development. That is why agile development principles exists. It aligns development to the business regularly minimizing waste.
As part of agile you have planning sessions to talk about your goals and set them up. You have retrospectives to learn, grow, and adapt to challenges. You have tools that track tasks, resources, and hours. These are vital best practices that make quality software. But even bad software team have defined processes and great tools. The real difference is in the culture or in the people. Using the process to grow talent. Being accountable so you make goals. This is only possible with sound leadership and quality resources. Doing the work is about harness a team’s excellence. Maintaining that begins with quality assurance.
Software is a Business, Run it Like One
Great software is not defined by delight. Great software is a measured outcome like any other business unit should be; with SLAs and KPIs. Your vision should include your tolerances. Enterprise-grade, Commerical-grade, and Carrier-grade: there are many standards out there. What is your standard? What contract do you have with your consumer (written or otherwise)? Once you have your standards, we need to understand the different layers of missing them. What is a P1 vs P2? These thresholds will set the bar of quality of your software. They will allow you to compare individual output to team outcomes. Understanding your standards and your consumer base will enable you to create a test strategy. This is your bar. This how to define quality software.
Many organizations get held up on test automation. Automation is about helping resource management and being more efficient. This is an excellent goal for mature development. But if you first cannot test manually, then you are not ready for automation. Automation distracts many organizations from the purpose of testing – reporting. You need to know if you are making your standards so you can release. That is the most important party. Releasing software is the goal. Businesses expect releases. Testing reports, will tell the team they are ready to release. But they also provide more value. Testing results will also let you if you are resourcing correctly or “achieving velocity”. Do you have enough developers? Do your developers need more training? Who are your leaders? Do you need automation? Great software is made in the QA phase. Applying standards and data, allows software to be released on time, under budget, and with minimal defects.
Best Practices are About Managing People
Excellence in development all about applying best practices. Starting in product visioning. Applying agile development processes. Releasing with quality assurance. The trick to managing the software chaos is following best practices. This is not about the latest development tool. This is not the latest development language. This is not the latest process framework.
Software development best practices are about the people. Its about leadership having the proper data to make good decisions. Engineers focusing on excellence in delivery. You get this working, then ideas become experiences. And experiences change the world. Reach out to me if you ever need to change world, I have a team ready to help.
#GenerativeAI is the newest hype vehicle in technology news cycle. People are saying its going to replace 80% of jobs. They are saying that soon #LLMs will figure out how we will live forever. The hype is nonstop. Unfortunately I live in reality. How are people going to make or save money with Generative AI? In this I see two ways.
Driving Productivity Gains with AI
First, you can augment your existing personnel to drive faster, more productive outcomes. The #ROI is simple. One person with GenAI provides X value and another without provides Y. If X is greater than 2xY, then you have a great business case. People want to say AI will replace humans. I have not seen these opportunities. This is not like the bank ATM replacing human tellers. The business opportunity for Generative AI is more like the laptop. Having a mobile workstation for an employee means more work done by each employee. When more work can be done by an employee, this does not mean humans are losing jobs to AI. It means that employees can have better jobs, with monotonous tasks done by the #AI. I remember working with a large telecom provider about 5 years ago. They had model with a singular US resource as lead and two offshore resources on that squad. The concept was simple, its like having one employee work 24 hours a day for around the cost of 1.25 employees. It was very successful and I see Generative AI offer similar advantages at a lower cost.
Elevate Your Consumer Experiences
Lastly, you can make it easier on your consumers to buy your products by enhancing the experience. This is my personal favorite. Growing the pie is always more fun than shrinking it. Instacart is using Generative AI to allow embedded search into their mobile application. Users can search for recipes. Once selected, the ingredients are added to user’s carts. This drives ease of use, increased #CX, and higher revenue. Use cases like Instacart show the long-term value Generative AI. Its all about increased engagement through consumer delight.
My job is about defining and delivering experiences that delight clients and consumers. Generative AI offers both ways to save money and make money. The question is what is your use case? Only humans can help you with that.
Everyone should know what #retail #loyalty programs are. The most common ones are a way to capture your contact information. This gives brands the ability to email you offers to buy more products. The basics are simple. You buy stuff; you get points. This allows you to get discounts or more free stuff. It makes sense logically, so that’s why it works. Both consumers and brands get frustrated with this approach, but things are changing.
Enter the concept of communal loyalty. Capturing the consumer heart, not just the brain. Personally, I see this as “fandom”. The consumer is part of the brand. They identify through their brand. My example is that I am a Miami Dolphins fan. And I live in DFW/Cowboys country. I go out of my way to find a community like me. I am doing my part. The NFL does not make this easy, so social media fills the gap. When a brand relies upon social media, they lack control of the message and lack authority to upsell. So how do you create communities, gamify them, and upsell to them like social media? Enter web3…
Web3 is a great example of technologies designed to confuse the masses. In the arena of loyalty, web3 infrastructure is like a public bulletin board. Brands are the admins, the influencers are the mods, and engagement is the goal. The difference is there is no hosting cost. You pay when you make money. Also, web3 as infrastructure is great at secure record keeping and P2P engagement. These are the backbone of communal loyalty programs. First, you will want a method to keep track of who are influencers – these are NFTs. You will also want to keep track of the value a consumer has to the brand – these are tokens. Then, you will want consumers to be able to interact anonymously – these are wallets. Web3 is the perfect infrastructure for communal loyalty strategies.
Getting started is always the most difficult challenge. Greenfields are easier. Changing traditional programs can be too difficult and may not be cost effective. My recommendation is always find your north star. Leverage your vision to crawl, walk, then run into the future. If you need a helping hand, let me and my team know. We are alway happy to help innovate with a brand.
In my career of many technologies and industries, the most common thread was my buyer looking to “do more with less”. Greenfield projects are always more ambitious then the budget. The brownfield projects had budgets shrinking. The question was always how do we push a better ROI for the business? In the past, there never was a silver bullet. Enter Chat-GPT. Recently the IT world has been shaken to it foundations with the addition of Generative AI. At its core, its reasoning engine, built with a common internet knowledge. At the speed of a clock cycle and the cost of $0.002 a task – it can do anything. Or at least attempt it…
The drawbacks are there. This is nascent, over hyped technology. Its accuracy is lower than machine learning and deep learning methods. It hallucinates, or just makes up results. The data privacy and security is also very concerning. But the opportunity is tempting to using this technology for any and all use cases. While I see plenty of danger areas, I like to think to the positives. Whats missing is clear – a harness. You cannot expect the silver bullet, but you can lower the bar of success. That is what Generative AI provides – “Do More With Less”. Controlling the inputs and outcomes can be helped with simple business rules. Off-the-shelf ML models can greatly impact the reliability of GenAI outcomes. This is the definition of Digital Engineering. We create predictable technology-based outcomes with unpredictable technology.
My advice to clients? What ideas did you have to scuttle because they were too ambitious for the business dollar? What transformation project has been put on hold waiting for “a better way”. No is the time to make the impossible thing hard or the hard thing easy. With Generative AI, the realm of possibilities have gotten larger. Reach out, I would love to hear about your “impossibilities”.
We all know, Web3 is in the the trough of disillusionment. The hype it has received over the past 3 years has died down. The negativity around security, adoption, and governance has drowned out the believers. Ignored are reports from a16z that the digital art world has exploded in patrons and now growing again. The traditional use cases have gotten stale. The tarnish is visible in the media. The truth is far different from this narrative. Web3 has proven itself beyond any doubt with over 400 million transaction in 2022. This is only one chain, Ethereum. This should be a call to all digital architects – web3-as-infrastructure is ready.
Digital Content Management is an area I expect to be the next explosion. Imagine you are a Youtuber (I have one in the family). You have a community of 100K or more followers. What is more lucrative? Selling physical merch or digital? Patreon is a great tool for the creator economy for this reason. You can setup a quasi-loyalty, charge subscription and deliver digital rewards. How about Kickstarter? Sell the goods before you make them. Both of these models are availability simultaneously with web3 as infrastructure. The question is who is going to provide it? Another web2 company or brands themselves? Why rely upon social media when you have the products and followers?
With the built-in security and public trust models, creators (individually or corporate) can harness their ideas quicker to market. The idea-to-revenue latency should make anyone interested in the opportunity of web3. Creating a value chain pipeline with web3 is easier than ever. There are even competing chains you can partner with. Ethereum, Solana, and Polygon are only three of your choices. Your ability to digitize your product line is limited soley by your imagination and community. New tools and services are being introduced to reduce your challenges and consumer friction. So what is the hold up?
The first common problem is in adoption. The barriers to entry have been too great for most demographics — to date. This is fortunately changing. New tools, technology, and methodologies are available to streamline and secure web3’s front door. Trusted, hosted, and managed wallet solutions are available. They allow both corporate and consumers the opportunity of access without the complexity. With a trusted front door, outcomes with web3 as infrastructure will skyrocket.
The biggest challenge with a brand experience is with governance. Web3 was designed as a B2C experience. Every account, or wallet, would need to be individually held. Corporations are not individuals. Having a flexible governance model that allows corporations to create, store, sell, and track is an absolute necessity. Brands need to know they can control their outcomes. Things will change once brands have equal or greater control over digital goods. Again, innovation has occurred. The tools are available to manage corporate digital assets successfully. With proper governance in place, brands will see the outcomes to the digital strategy not just “investments”.
If you are looking to increase security and reduce the cost & friction of your B2C experiences, reach out. My team and I are helping dozens of our clients leveraging web3 to provide full ROI experiences. The promise of web3 goes beyond the cryptocurrency and digital art use cases. At Catalyst, we help clients harness its power with the business ROI required to build the future of CX.