While technologies like artificial intelligence, digital assistants and messaging apps grabbing the tech spotlight, blockchain is kind of flying under the radar relatively speaking. But the technology underpinnings for Bitcoin, the decentralized crypto currency some are betting on to go mainstream, is finding a number of potentially disruptive additional uses businesses are starting to take note of.
Understanding Blockchain Disruption
Jeremy Epstein, CEO of Never Stop Marketing and blockchain expert, just published a really great free ebook on blockchain, titled The CMO Primer for the Block Chain World: How this Trust Machine Impacts Branding, Customer Experience, Advertising and Much More. Jeremy shared with me the crux of what blockchain is, why it’s important beyond bitcoin, and how it might change the way marketers operate and disrupt how businesses create effective customer experiences going forward.
Below is an edited transcript of our conversation. To hear the full interview click on the embedded player below.
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Small Business Trends: Maybe you can give us a high-level definition of what exactly blockchain is.
Jeremy Epstein: What blockchain basically is, is a globally distributed database. Everyone has a copy of the database. So imagine we all have a Google Sheet or a Microsoft Excel spreadsheet and we’re all looking at the exact same copy of it. Instead of having a copy stored in one central location, we have a copy of that ledger of all that information stored at every computer, or all the participating computers around the world. And the security of that is guaranteed by some pretty cool type of cryptography and some other ways of making sure that the data is sort of tamper-resistant.
So that’s it at a very, very core level, but just like I tell people, you don’t need to know that SMTP is the protocol that makes your email work, you just need to know that email is faster than faxing. I think the same thing applies to blockchain. The key thing to walk away from this is not how does blockchain work, it’s that it works.
And if you’re a business owner or you’re anybody, the important thing to think about is,” what does this mean for me? What does this mean for my business? What does this mean for my company in the years to come?” And that’s kind of where I spend most of my time.
Small Business Trends: It’s a really interesting, maybe game changing technology. It’s the driving force beneath bitcoin, using that as a way to do transactions without having a lot of government intervention, a lot of intermediaries like banks. But what if you’re just a business guy whose looking at it from a standpoint of, “How does this improve my business? How does this improve the way I’m able to market and brand myself?” Why should those kind of people pay attention and be interested in what blockchain has to offer?
Jeremy Epstein: The primary implication of blockchain as I see it is that, for the first time ever we are able to transact items of value directly between two people with lower cost, less risk, and increased speed, without the need for any centralized intermediaries. That’s the game changer here.
So, if you’re a business owner, what you need to understand is, the third party institutions that basically are brokering trust right now between other parties, they’re in the cross hairs of this disruption.
Small Business Trends: Where do you see blockchain making the biggest impact when it comes to customer experience?
Jeremy Epstein: When you think about customer experience, there are a couple of things that happen in a blockchain world. And the way I sort of broke down the book was into sort of four section.
Let’s just talk about the familiar challenges that everybody has. If you deliver a better experience, you’re gonna have people buy more often. But what’s interesting now in a blockchain world, remember, everyone has a copy of the database. So, in the previous world, data was king; it’s who has the data, whoever has it is king. That’s why Facebook and that’s why Google, all these guys are sucking as much data as possible. But on blockchain everyone has data because its open. Now there are these things called private blockchain but we’ll leave that aside for a moment. But basically now, that information is available so, that’s number one.
So then the question is, “Okay, well how do I interpret that data as much as possible?” And that’s were the real life arms race of the next generation’s gonna be is, “How do I analyze that data? How do I do artificial intelligence, machine learning on top of it?” Everyone has the same data, it’s like we all have the same starting point and it’s who can get the insights, who can ask the questions, you faster, better and understand that. So I think the near term is we’re gonna have slightly better systems now to verify that Brent on Twitter is the same Brent that we see on email or YouTube or whatever, which is gonna allow you to deliver more unified customer experiences across every platform. And I think that’s really critical because you want … you have to keep pushing customer experience because the data no longer becomes the differentiator. It’s interpreting the data and then delivering the experience based on the insights in the data. So I think that’s gonna be sort of the first thing in terms of the accelerant.
I think the second thing though that’s really fascinating is we’re gonna move into a world where you’re gonna deliver customer experience without actually necessarily knowing who your customer is. I know this is a crazy idea, right. But in a blockchain world, the individual controls his or her identity. Right now, I don’t control my identity. I log on, I give information to somebody else, they have it. But in a blockchain world, I control the identity. I control all the information. The data doesn’t sit on a server. The information might be replicated on a ledger, but the only person who can update that information is the person who controls what’s called the private key, which is me.
I’m the only person who can make a change that says,” I moved from D.C. to New York. Or I moved from New York to Atlanta, or I now work at this company, that’s the only person who can update it. And then I can decide to whom I’m giving access to that information.
And so if you’re a company, I don’t give you my information and you keep it forever. I might just need to come on and say, “You know what? Can I prove that I live in Maryland or and thereby I don’t have to pay sales tax or I do have to pay sales tax. Yes, I can cryptographically prove that I live in Maryland but that’s all you need to know.”
A classic example is going to a bar and get carded. Right now you show them your driver’s license which shows them your name, your address, your date of birth, all that kind of stuff. They don’t need any of that. The only thing they need to know is, are you over 21. So you can cryptographically prove I’m over 21 and then they let you in the bar. That’s it.
Now you’re living in a world where I don’t have all this other information about the customer. And I can’t even keep the information because they’re just giving it to me on a permission basis and then pulling it back. Then the question is, how do you deliver a customer experience, if you don’t actually have that information about your customer, that’s the world we’re gonna go into.
So in that world, you have to be relentlessly focused on customer experience because the switching costs are basically zero. You don’t have vendor lock in and you don’t control the data. So the way you win is by delivering amazing customer experience.
Small Business Trends: What do people need to know right upfront and what do they get from reading this book that will help them understand what they should be looking out for with blockchain …
Jeremy Epstein: So I think if you’re an SMB or anyone, the first thing you can is say, “Okay. Where are the points in my ecosystem where there’s a lot of redundancy in the data systems. And maybe it’s within my own company or it’s within sort of, my partners.” Okay. Well, if that’s the case, is there a way to potentially, streamline my back office operation, reduce a lot of these redundancies, improve data integrity and start to kind of mine the data … analyze the data in more productive ways so that I can give better insights about the behaviors not only in my customer, but my partner’s customers to extend the value, create new value, or new opportunities for value creation for them. I think that’s number one is, understand where can I actually do this right now?
I think the second thing is to ask yourself is, “Okay. How do we measure customer experience? How do we know if we’re delivering a good customer experience right now?” It’s almost like blockchain is nice but start thinking about how do you become a customer experience company. How do you know whether people enjoy interacting with you? You have to start taking that very seriously and it’s not customer experience just on your website. It’s customer experience at every touchpoint.
Jeremy Epstein: There’s a lot here. I’ve been doing this for a year, year and a half now and I’m still confused about what’s going on so don’t feel bad. But at a very simple level, what I’m trying to do with this book is say, “okay guys, here’s something to try to understand and start to think about. There’s still time before you get disrupted, potentially. Hopefully not.”
If you buy into the idea that this stuff’s inevitable, which I believe it is, and you understand where it’s likely to impact, in terms of disintermediating third parties, reducing inefficiencies, and driving the need for improved customer experience, then you can take a very close look at your own business and say, “Okay. Where am I dealing with third party intermediaries? Are there startups in that space that are basically looking to disrupt those guys? Can I do it faster, cheaper? Where are there inefficiencies in my back office operations and way I work within my own ecosystems? Is there a way to develop or leverage some sort of blockchain technology to do that, to reduce my risk and reduce my cost?”
And third is like, “OK, how do we become a customer experience-focused company regardless of whether you’re a one-person shop or you’re 100,000 person shop or company.”
This is part of the One-on-One Interview series with thought leaders. The transcript has been edited for publication. If it's an audio or video interview, click on the embedded player above, or subscribe via iTunes or via Stitcher.