Key Learnings: Blockchain Disruption @Accenture

July 17, 2016

Dear Friends,

I am pleased to share with you the key learnings that emerged from another very interesting and energetic discussion at our the latest NetForum — our second on the topic of the Blockchain.  As usual, we mixed leading edge startups and established corporations to attack a topic from all angles.  It took me a lot longer than usual to pen this report (was busy on my day job!) so thanks for your patience.

Our participants hailed from Accenture (represented by our host, Abhishek Gutgutia), First Data, Fujitsu, RWE, Warner Brothers, Wipro,, as well as Consensys (represented by our featured guest, James Slazas, CFO), Factom, NSS Labworks, Overstock, Persistent Systems, Privacy Shell, Skuchain, among others, representing a wide cross-section of Blockchain projects.

To start off the report, my personal opinion, as someone who has been starting and advising web/mobile companies since 1994:  I believe we are potentially witnessing a paradigm change in technology platforms.  Yet, there is still no consensus on where the biggest payoff will come from this new set of technologies.

Let me explain what I mean.  For years, Bitcoin has been simmering in the background (for most of us).  But cryptocurrency was a topic that made a lot of people uncomfortable — is it subversive, is is legal, etc…  Then about 2 years ago, Bitcoin was on everybody’s radar.  However, almost as soon as it took off, people starting taking it apart, literally.  As a cryptocurrency, people found that it had many flaws and a better cryptocurrency could be built.  More interestingly to me, others took the Bitcoin edifice apart and started looking at the components of the Bitcoin “stack” — Blockchains, Distributed Ledgers, Identity Systems, etc. — and finding new uses for these elements outside of the cryptocurrency use case.

This is where the NetForum has been focused: understanding where these new technologies could now be exported and used.  It’s a serious business question, as the most devastating criticism that business types could level at a new technology is: “it’s a technology in search of a solution (i.e., a science project with no practical utility).”  Considering the money spent by business types on Blockchain projects, it seems that the mindset is that there is a real value here and that whoever discovers it first could end up on top of a new food chain.  (No pun intended.)

So, I tried to steer our NetForum group to a discussion of the ingredients for success of Blockchain projects.

The first point to emerge from our discussion is that the overwhelming majority of Blockchain projects today are proof of concepts.  There is a lot of experimentation fueled by venture capital money and strategic capital — the former driven by opportunity, the latter driven by fear of disruption.  Attending our NetForum discussion were several venture studios, as well as startups funded by strategics, directly or via strategic-funded accelerators, and they are all involved in proof of concepts.  Some are very narrow use cases (e.g., notarization, land title) and others are very broad use cases (e.g., smart cities, internet of things security).  Most are still playing the field, figuring out whether they could really be a horizontal player or an enabler, or whether to be a vertical player, a solution for a specific problem.

ConsenSys is one of these horizontal and vertical actors in the Blockchain space and that is why I had invited James Slazas (their CFO).  I wanted to ask him “how do you push through a paradigm shift” in a systematic way?

James spoke about how ConSensys was attempting to lay the cornerstones of an ecosystem.  A key part of the strategy is to build on a strong technology platform — Ethereum — and create a very rich set of development toolkits and programming hooks.  Enabling and supporting a developer community is critical.  Then they had to get that enabling layer distributed broadly, something they accomplished via a partnership with Microsoft and its cloud solutions.  Another leg of their strategy is to incubate many projects across a broad variety of sectors – from identity systems to music rights to prediction markets to energy trading – as opposed to concentrating on a single vertical like finance.  This broad-based experimentation is intended to speed up the discovery of where the new platform can truly revolutionize existing value chains — nothing encourages emulation as success, so demonstrating successes soon is important.

James’ intro laid the foundation for a number of discussion threads about what had to happen or be overcome for the ecosystem to flourish.

  • One thread related to the lack of core, “bottom of the stack” standards.  Our attendees were in agreement that no one body had emerged to set the most elemental standards upon which every Blockchain project would be built.  This required some of our attendees to choose (i.e., bet) on one platform and others to build their technology to be compatible with several emerging platforms.  This is clearly less than efficient.
  • Another thread related to how standards were being set.  Several of our participants felt that the work of industry consortia was very troublesome as it was less than a transparent process, engendering suspicion that outcomes would favor incumbents at the cost of efficiency and innovation.  Considering what’s at stake, it is obvious that legacy players want to be involved in setting standards.
  • Another thread touched on how at the core Blockchain/DLT required trust and willingness to “share” one’s data with a utility used by competitors.  Could that ever be achieved? Could it be achieved without consortia and the privatization of Blockchain solutions.  For example, regulatory requirements of certain industries might require them to value certain outcomes in the technology standards that others might not care as much about.  One of our participants is working with a foreign government on a “regulation-free zone” for crypto-technology to spur innovation with undue concerns for regulations at the outset.
  • Another discussion thread surmised the possible the existence of pre-existing patents covering processes that Blockchains would likely employ.  This could delay the emergence of standards or force inefficient workarounds.
  • Finally, what I call a reality thread: most new technologies fail.  There is a high bar for any new thing to stick.  The forces of inertia and of established value chains are considerable.  In order to get established players to play along, and hasten their own demise, the pay off from the new thing has to be substantial and make up for the cost of disruption.  Otherwise, only new players will play and their lack of customers and in-depth domain knowledge will stand in their way of building solutions with sustainable value.  A number of our startup attendees got the message and are working with incumbents today on solutions that are win-win-win for all involved.  These (surprisingly to me) are in highly regulated environments such as financial services and international trade where a new technology paradigm built on efficient data sharing with good transparency to enable auditing could actually work to everyone’s advantage…

I hope you find this report useful.  As always, my reports are what I heard and it may differ from what people said or meant to say — there is a good dose of editorializing here.  As always, I welcome your comments, and feedback.  

My thanks to all the attendees, to Accenture and Abhishek, and to my friend and colleague, Raj Singh ( for helping launch TheNetForum in Silicon Valley.  Do check out the plans for future events that are still in development and let me know if you wish to host or participate as a featured guest.

Finally, as always, we welcome your inquiries about how we can assist you with your corporate strategy, financings and M&A.

Have a great summer.




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