On this episode of The Venture, we speak with Brian Clark, chief product officer of Ascend Bit, a Bangkok start-up lately spun off from the Ascend Group, which is itself part of Thailand’s C.P. Group. With a mandate to leverage blockchain options on behalf of the group, Clark is specializing in productizing loyalty and gamification, together with tokenizing nontraditional property for customers. In talking with McKinsey’s Andrew Roth, he discusses the challenges and promise of blockchain, sensible contracts, and Web3, together with how new tech options may also help manufacturers create extra genuine communities primarily based on shared worth and pleasing experiences. On the shut of the interview, McKinsey’s Dilip Mistry weighs in with extra insights in addition to recommendation for incumbents trying to transfer ahead with Web3.
Andrew Roth: From Leap by McKinsey, our business-building follow, I’m Andrew Roth, and welcome to The Enterprise, a sequence that includes conversations with legendary enterprise builders about methods to design, launch, and scale new companies. In every episode, we lower via the noise to carry sensible recommendation on how leaders can construct profitable companies from scratch.
On this episode, we share a dialog with Brian Clark, chief product officer of Ascend Bit, a Bangkok start-up lately spun off from the Ascend Group, itself part of Thailand’s C.P. Group. Ascend Bit’s mandate is to leverage blockchain options on behalf of the group, specializing in purposes for companies and tokenization for customers. Present efforts deal with productizing loyalty and gamification, with an emphasis on tokenizing nontraditional property for customers. You’ll hear Brian focus on the challenges and promise of blockchain, sensible contracts, and Web3.
Brian, thanks for becoming a member of the present. Wanting ahead to the dialog on Web3 and all issues blockchain.
Brian Clark: Most undoubtedly, Andrew. Thanks for having me.
Andrew Roth: Earlier than we get into all of the tendencies round Web3 and what you’re doing, are you able to share just a little bit about your position at Ascend Bit and the way you bought there?
Brian Clark: I’ve been doing product administration for about 12 years for manufacturers like Goal, Meta, and, most lately, the C.P. Group. For many who don’t know, C.P. Group is an enormous conglomerate primarily based in Thailand and one of many world’s largest producers of feed, shrimp, poultry, and pork. However beneath that, there’s a ton of different issues that we do. A couple of yr and a half in the past, I joined a brand new division right here known as Ascend Bit, which was tasked with a broad mandate to leverage blockchain for innovation.
Clearly, blockchain is a fairly large area, and we’ve already gone via a number of iterations and proofs of idea. And thru these efforts, we recognized some tracks inside the group and are focusing the vast majority of our efforts on productizing loyalty and gamification for third-party options underneath a software-as-a-service (SaaS) umbrella. We’re excited to take that all through Southeast Asia, not simply inside the group. In order that’s what we’ve been engaged on, and it’s been a enjoyable journey with plenty of learnings.
Andrew Roth: Let’s take a fast step again for the viewers, since there’s plenty of hype and confusion round crypto and Web3. At McKinsey, we see three technical primitives to Web3: blockchain, sensible contracts, and the digital property and tokens you possibly can layer on prime of the primary two. Previously few years, there’s been plenty of funding within the infrastructure round these three layers, and we’re beginning to see extra use instances sitting on prime of those primitives round tokenized property. How do you see the Web3 world, and what’s thrilling you proper now by way of actual worth to a corporation like yours?
Brian Clark: I’d say we’re largely aligned with how McKinsey teams these three pillars. I believe the place we’ve misplaced some curiosity—and possibly this simply displays the regulatory state in Thailand—is round utility cash, safety tokens, and preliminary coin choices. These are attention-grabbing mechanics, make no mistake. However I believe except your small business is within the Web3 area, do you really want to harness that? We’re now not as curious about a utility token that can be utilized to buy items and companies.
A yr in the past, everybody had a white paper and a coin. However now you’re seeing a transfer away from that, or they’re saying, “I’ll simply undertake Ethereum,” and even “I’ll simply undertake money.” They’re extra within the blockchain, smart-contract aspect of it. And in our enterprise, we’re within the tokenization of property and smart-contract interoperability. Additionally, Thailand is thought to be unfriendly towards something round decentralized finance (DeFi), which has influenced a few of our path.
Andrew Roth: Are you able to dig into the smart-contract aspect of issues just a little bit? Sensible-contract innovation entails that interoperability you described, in addition to the flexibility for builders to, roughly, seize a Lego-brick sensible contract and construct on prime of that to speed up improvement. Are there any noncrypto prototypes or use instances round sensible contracts that you just discover compelling?
Brian Clark: From Ascend Bit’s perspective, we’re attempting to focus on loyalty and gamification. And the precise factor we’re curious about exploring is a brilliant contract’s capability to tokenize a nontraditional asset. Let’s say you wish to begin promoting one thing however you don’t have scale. You may go on to Shopify. However what occurs in case your asset is nontraditional, like a cooking class, and also you wish to reward somebody with that? Effectively, now you possibly can tokenize it. Technically, it’s a nonfungible token (NFT), a digital proof of possession folks can purchase and promote.
What’s attention-grabbing a few sensible contract is that it democratizes that course of. You get a lower; they get a lower. Scale doesn’t matter, and listed below are the fee phrases. As quickly as I purchase your cooking class, you agree inside X hours and right here’s your cut up, at all times. And that kind of transaction assure is completely different. Historically, when you approached a giant model, you’d lower a deal to provide them just a little extra income share, particular phrases, and particular payouts. A wise contract is simply, “Right here’s the enjoying subject, and anybody that wishes to interact can partake.”
So the principles of this ecosystem are identified to all and shared by all. There’s by no means a query of “When am I going to receives a commission?” The sensible contract is collateralized, and it immediately pays out as soon as these preconditions are met. I believe that a part of it’s actually attention-grabbing in unlocking extra of those methods to carry out rewards and loyalty. It ranges the enjoying subject. And once more, you can even tokenize nontraditional property.
Andrew Roth: I just like the use case round loyalty, as a result of it’s straightforward for the viewers to grasp. The normal earn-and-burn loyalty packages prior to now have been troublesome, as a result of there could be some anchor participant within the ecosystem, like a grocery retailer that wishes particular phrases, so there’s at all times this lack of transparency. What you’re saying with blockchain and sensible contracts is it simply makes issues clear and extra a matter of truth, virtually like a batch course of by way of how transactions get settled.
Brian Clark: Precisely. And also you even have this transparency on interactions you couldn’t do earlier than. Let’s say you obtain a reward you don’t need. Now, you possibly can create your individual market in your loyalty ecosystem and put it up for barter. Somebody can log in and say, “That appears type of cool. I’d like that.” Now you can commerce for that. And once more, a wise contract facilitates all the pieces, with a share lower.
Earlier than, a model might by no means unlock a secondary market, or if it did, it might go off-platform. Right here, it stays on-platform: “You tokenized my reward, and even when I don’t need it, Andrew actually needs it, and he’s going to settle with me.” Sensible contracts make it straightforward. And you may see the place it went. It’s like, “Oh, that is fairly useful. I can see the place these property are transferring. I unlocked a secondary financial system I didn’t have earlier than.” On a Web2 database, this could take plenty of effort to place collectively.
Andrew Roth: That’s true. Many individuals don’t trouble redeeming their factors and even searching the rewards catalog. And in the event that they don’t like several of the rewards, there’s not a lot they’ll do past cashing them in for airline miles. Starbucks lately introduced its Odyssey metaverse rewards program. Any ideas on that, and what’s within the pipeline for you round loyalty and gamification?
Brian Clark: We do draw inspiration from Odyssey. Starbucks had probably the most profitable loyalty packages on Earth. Interval. It was at all times cited as probably the greatest.
Andrew Roth: At one level a couple of years in the past, they’d extra money on deposit of their loyalty system than some US banks.
Brian Clark: And it’s easy, it really works, it’s useful, and so they did a terrific job, since Starbucks is a well-run firm. So why are they utterly replatforming this already profitable expertise? However when you examine this system, it’s very compelling and entails buying limited-edition NFT badges and immersive buyer journeys, or odysseys. There are such a lot of distinctive facets to this system, particularly round this neighborhood and market idea and the way straightforward it’s to tokenize. For instance, I might offer you a badge that has a seasonal profit, or one which unlocks one thing new every month.
Starbucks is absolutely the chief right here, and I believe there’s room for quick followers. We’d prefer to emulate a few of these experiences for manufacturers that lack the capital to construct their very own Odyssey, offering a SaaS resolution that enables them to simply combine these experiences into their area. You then layer on badges and tokenized rewards that may be unlocked on this promise of neighborhood and market. And I believe that’s actually compelling.
We’ve got two of the highest 5 loyalty packages by quantity in Thailand and are doing a little attention-grabbing validation pilots to provide us a leg up as we take this to different gamers out there. If a prime model goes to replatform a rewards program that’s so profitable that it has extra money than some banks, they did it for a calculated motive. And we’re equally passionate in regards to the promise of Web3.
Andrew Roth: It’s clear from the vitality in your voice that you just really feel we’re on the cusp of a breakthrough use case right here within the gamification loyalty bucket of Web3 use instances. However there’s some cynicism on the market due to what’s occurred with crypto and the way it’s sullied the waters with different components of the Web3 ecosystem. It appears like everybody’s simply ready for that breakthrough use case that folks can level to in a sensible means. The place do you’re feeling we’re on the innovation adoption curve? Are we a couple of months away? A yr away? Two years away?
Brian Clark: I believe we’re a few fiscal quarters away. If I take a look at some start-ups on the market, they’re doing nicely, like an organization known as Heirloom. One motive I’m enthusiastic about loyalty is the tokenization of rewards. We’ve got 25 million month-to-month energetic customers, so it’s a large-scale loyalty platform. For me to create a brand new marketing campaign for my advertising and marketing group, I needed to program that logic; I needed to debit, I needed to carry out high quality assurance, and I needed to deploy it. Now, I can simply put that logic onto an NFT, so my time to market is quicker, which is a aggressive benefit.
Plus, there are different aggressive benefits. Since you possibly can tokenize nontraditional property, take into consideration the achievement loop. Let’s say you tokenize a VIP cross to an artwork truthful, and there are solely 100 of them. After I go to the occasion, how do I full this loop and ensure there’s no fraud? Individuals have digital wallets, so I transferred it from my pockets again to the venue pockets, and there’s no fear that somebody faked it with a screenshot.
I believe that loyalty loop goes to be actually compelling, since massive and small manufacturers alike can begin tokenizing issues for a reward much more simply than earlier than. I’m actually bullish; I’m biased. However I do suppose that that is going to be massive, in all probability in six months or much less, and there are fairly a couple of start-ups getting some actually good funding.
Andrew Roth: What do you want about Heirloom?
Brian Clark: It’s so broad, however it’s so good, since they’re saying you possibly can tokenize something. They’re attempting to be the Shopify for tokenized property. That is compelling, as a result of if you concentrate on e-commerce, why do you need to go to OpenSea to purchase my tokenized supply? It is not sensible. Simply tokenize no matter it’s, promote it on my website, and let me get my income. I believe that’s what they’re attempting to say. I additionally suppose they’re being courageous by tokenizing something. That’s type of formidable, however it’s additionally thrilling. I like their angle that an NFT is a digital proof of possession of no matter you possibly can program and show.
And once more, you get this loop. That’s crucial factor to me. I don’t must combine together with your point-of-sale (POS) terminal, I don’t must scan your QR code. That takes integration. That is simply, “Right here it’s. Switch it to this pockets. OK, that’s genuine.” I couldn’t faux that mint, and I couldn’t faux that switch. Then you definitely go on an Etherscan and validate that transaction. I believe these underlying blockchain and smart-contract components are going to assist energy these loyalty and gamification rewards, or perhaps a market of various companies, past what you’ve seen earlier than.
Andrew Roth: I see two lenses rising. One is staying on the NFT and loyalty factors. Blockchain and sensible contracts create that effectivity, taking out these integration factors like QR codes and POS methods, which everyone knows are very difficult to combine with to shut the loop on a transaction. In order that’s an effectivity play. However you’re additionally speaking about tokenizing all the pieces, which brings up this subject of possession, fairness, and the creator financial system. Something you’re beginning to see emerge as a use case round this entire promise of the creator financial system?
Brian Clark: If I’m a model and create one thing, like a Prada bag, I can tokenize it so you already know it’s one hundred pc real. And when you resell it, the customer is aware of it’s actual and it additionally comes with some added advantages. I believe the worth of the creator financial system goes to be seen within the secondary market, as a result of the asset is verifiably genuine and comes with transferable worth. I believe that may unlock this creator financial system, in addition to a secondary financial system that’s reliable and attention-grabbing and facilitates straightforward transferability.
Andrew Roth: It’s thrilling, in idea, to be a maker or creator proper now. We see the potential, and I believe we’re each excited in regards to the area basically and the alternatives round it. Let’s shift to a few of the challenges you see by way of the technical layer, the use case layer, and the client layer. I’m certain you’ve had conversations at Ascend Bit the place you’ve skilled pushback from a few of your shoppers.
Brian Clark: We’re nonetheless attempting to assist folks perceive Web3 and why it ought to matter to them. As a result of they usually say, “I have already got my loyalty program in your catalog. Why do I would like yet one more storefront?” So getting Web3 buy-in requires serving to them perceive all this in a nontechnical method. It’s good to stroll them via the added advantages just like the secondary market, the extra income, and by no means having to fret about issued versus claimed rewards. As a result of when you say, “We’re Web3,” that’s provocative, however you need to assist them perceive why it issues for them to undertake your platform.
What we’re battling proper now could be attempting to transform two teams of gamers. One is the publishers, the makers, and why they need to embrace Web3. Second is persuading third events to undertake us as a SaaS, who counter, “I can already do most of that. Then I’ve to replatform or combine your software program improvement package. Why?” It comes all the way down to evangelism and schooling in regards to the differentiated worth. As a result of at the same time as you take a look at Starbucks Odyssey as a terrific instance from which to attract inspiration, it’s nonetheless imprecise: “Oh, you possibly can play this nice music that sounds stunning. However what does that really imply in follow?”
So it’s essential to offer these concrete examples folks can perceive that make it much less in regards to the expertise and extra in regards to the experiences they’ll get pleasure from. I believe the place we’re particularly struggling is offering that clear narrative that demonstrates a price add, as a result of loyalty and gamification is nothing new.
Andrew Roth: I believe Web3 natives would say, “The chance is extra round this shift of possession. As an alternative of simply having a factors steadiness and a loyalty program, I now have property. And property are way more useful and emotional to me, and having experiences and paintings that may be transferred in a market is a a lot completely different means of making an genuine neighborhood.” I agree that we’re a couple of quarters away from a use case that creates this huge worry of lacking out (FOMO). And it’s going to principally flip the sunshine on for folks round this shift from old-school neighborhood constructing and loyalty to extra of an genuine worth alternate.
Brian Clark: I like the way you describe that genuine neighborhood. Past the tech in our resolution, it additionally requires manufacturers to suppose otherwise. Let’s say you may have a neighborhood of 100 folks. What do you do as a model to interact these 100 folks in significant methods to indicate that your reward is exclusive to them? It’s not simply the tech expertise; it’s going to be a shift in your channel advertising and marketing methods as you faucet into and harness that neighborhood.
Andrew Roth: I’ve been experimenting with STEPN, a Web3 way of life app the place you earn cash whenever you jog, run, or stroll. And once I’m out on the street, I can inform that different persons are utilizing it, as a result of they’re virtually working into bushes checking their watches and telephones. They’re constructing one thing extra than simply factors; it’s a shared worth of well being and wellness. There are such a lot of artistic alternatives now to construct neighborhood with extra weight to it, and will probably be thrilling to see the place this goes. I believe this space of the feelings round possession and worth could be the pathway to unlock all the brand new use instances that make it mainstream in Web3.
Brian Clark: I believe that’s nicely summarized. It’s going to be actually attention-grabbing on this area. I do suppose loyalty is on the verge of a serious change, and I hope it’s for our enterprise and others, too.
Andrew Roth: Now comes a phase the place we invite specialists from McKinsey to offer extra context and to attract sensible insights. I’m joined by Dilip Mistry, associate and chief of Leap by McKinsey in Singapore. Dilip, nice to have you ever on the present.
Dilip Mistry: Thanks, Andrew. Good to be right here.
Andrew Roth: I’d prefer to cowl three issues. First, Brian’s mission to unify loyalty and gamification and the client sentiment round that effort. Second, how do blockchain, sensible contracts, and Web3 basically allow that? And third, a big a part of our viewers might be questioning methods to get began on this space however could also be confused by the jargon and blended indicators coming from the market proper now. What are a few of your ideas for folks not conversant in Southeast Asia and the urge for food customers have for gamification, loyalty, and rewards?
Dilip Mistry: Having lived right here for over 20 years now, I believe there’s undoubtedly an urge for food for higher offers. Shoppers listed below are keen to face in line to get a greenback off a selected product or a freebie, and it’s a part of the mindset and why persons are keen to leap on board rewards and loyalty packages.
However now we’ve got islands of loyalty packages, and there’s some shopper dissatisfaction in regards to the incapacity to make use of factors from one program and redeem them in one other, or the a number of occasions they should reenter their info as they transfer from program to program. So there’s an enormous alternative to reimagine and reinvent how loyalty and rewards are finished.
Andrew Roth: I believe it’s that shift of taking the patron relationship past simply rewards to embody engagement and neighborhood with the model. I believe what we’re seeing now could be customers demanding just a little bit greater than only a 10 % low cost or a reward. They wish to really feel extra linked to the model. Brian and I have been speaking about Starbucks Odyssey and the way they’re arising with some artistic methods past reductions and freebies to interact the model via the metaverse. The massive query is, what killer use case or characteristic will actually unlock and make the metaverse mainstream? What are your ideas?
Dilip Mistry: I believe Odyssey is a good instance of Starbucks taking a practical strategy. They’ve at all times been an early adopter on the subject of expertise. I believe they have been one of many first quick-service restaurant chains to put in Wi-Fi, and their loyalty program is spectacular. And now they’re taking plenty of nontraditional property and turning them into NFTs.
I believe they confer with them as stamps, and also you get acknowledged for touring and finishing quite a few actions. They’re being sincere and considerate by way of how they’re bringing these experiences to customers, who don’t want a Web3 pockets and can purchase a few of these stamps with bank cards as nicely. They’re taking a really pragmatic, customer-driven, nontech strategy, leveraging the advantages of their current program and merging it with the nice bits of Web3.
I believe that’s the reply for a lot of use case eventualities, the place you might be pragmatic, take the nice bits of expertise, and provide you with new experiences—versus being a Web3 purist and forcing customers to undertake expertise and behaviors they will not be prepared for.
Andrew Roth: That leads us to my second query, about how sensible contracts and blockchain facilitate loyalty and gamification. Brian and I mentioned it from an effectivity perspective, the way it permits you to embody numerous completely different companions and onboard them and not using a prolonged enterprise improvement course of. The opposite half I’d love your perception on is possession, the place a creator in Thailand makes one thing and will get rewarded every time it’s resold. What are your ideas on sensible contracts unlocking effectivity and this rising creator financial system?
Dilip Mistry: In relation to the creator financial system, there’s plenty of pleasure close to Web3, as a result of for the primary time, artists can shield their work. The sensible contract itself permits them to outline the principles by way of what occurs each time anyone else is viewing their work, needs to buy it, or will get concerned in an alternate. Loads of the creators I communicate to are excited in regards to the truth they’ll deal with being artistic as an alternative of worrying about what’s taking place when some centralized physique handles the transactions.
I consider that is going to end in numerous artists getting concerned within the course of, no matter their trade. We’re going to see numerous transactions going down world wide with full transparency, with out anybody worrying about some intermediary taking worth.
Andrew Roth: Sensible contracts create velocity and transparency and supply creators the factor of possession. It is going to be very thrilling to see how incumbents and types begin to localize the experiences they provide to customers, particularly in loyalty packages that transfer past conventional rewards into extra creator–model partnerships inside the native financial system.
Dilip Mistry: I agree, and as Brian talked about, they’ve acquired quite a few these property inside his group, so it’ll be attention-grabbing to see how companies like that get off the bottom. I believe we’ve discovered from Odyssey that there’s a means of delivering this with out making it overly technical. In the event you can combine the brand new expertise with what you may have at present, it’s higher for the patron and can enable much more folks to embrace Web3.
Andrew Roth: How ought to organizations transfer ahead on the subject of Web3? I believe what Ascend Bit is doing is one instance of a means ahead. What bits of recommendation would you supply the incumbent that’s attempting to make sense of all this?
Dilip Mistry: As an incumbent, you’ve at all times acquired to be watchful of improvements but in addition cautious to not get caught up within the hype. Timing is all the pieces. However I actually wouldn’t let the newest noise on crypto make you be dismissive of Web3, which presents numerous alternatives to reimagine current use instances and take into consideration new ones as nicely.
If I have been an incumbent, I’d completely ensure that a bunch of individuals on my group study all this. I’d additionally encourage them to get entangled within the native communities and possibly associate with a few of the progressive start-ups doing issues on this area. Hopefully, you’ll establish a use case you’re enthusiastic about, put some assets behind it, and take a test-and-learn mindset.
As with all new expertise, be cautious. However on the similar time, you’ve acquired to start out doing it to see if it’s materials for your small business. What I wouldn’t do is simply watch and wait, as a result of that’s not the fitting mindset for somebody who needs to consider new enterprise concepts and alternatives. So my recommendation for an incumbent is to cautiously get entangled to study and establish your use instances.
Andrew Roth: I like that. We’ve seen cycles of firms partnering to hurry issues alongside throughout Web1 and Web2, whereas individuals who watched and waited turned slowed down in numerous planning and never a lot participation. Whereas wholesome skepticism is justified round a few of these issues, the previous couple of years have seen plenty of investments within the infrastructure round blockchain and sensible contracts. And we’re simply beginning to see some use instances come up exterior of DeFi—extra sensible use instances that assist companies and customers.
It is going to be attention-grabbing to see who begins to win. I believe that’s the important thing solution to finish this: Don’t watch and wait. Proceed the rules round take a look at and study, however make it buyer centric, moderately than main from a technology-first perspective on what might be finished versus what ought to be finished.
Dilip Mistry: Completely. The truth is, when you get an opportunity, simply undergo the Starbucks Odyssey web site, as a result of there’s little or no Web3 language there. It’s a terrific thought starter by way of how one can embrace some great benefits of new expertise with out having to be technically literate—as a result of that’s not what the patron needs.
Andrew Roth: Sure. Let’s get rid of the jargon. Thanks, Dilip. Loved and recognize your perspective.