S1E4: Blockchain Business Case and Network Design with Krystal Webber

Krystal is a global expert in designing and forming consortia and business networks using Blockchain technology. She shares critical thinking and experience in the areas of network design, business case and governance models, with a number of real-world examples. Crucial topics for anyone looking to scale Blockchain networks and initiatives.

In this episode we discuss:

- Network intent - rationale and objectives for forming Blockchain networks

- Building the business case - Business value, incentive structures and return on investment

- The implementation challenge of creating new digital businesses with non-digital participants

- Comparing market utility, founder-led and for-profit network models

- Governance design using BOLT: Business, Operations, Legal and Technology

- Member management - onboarding, offboarding and ‘the rules to change the rules’

- A lot of ‘cake talk’: Scaling by Cupcake, Birthday Cake and Wedding Cake

Krystal’s LinkedIn profile: https://www.linkedin.com/in/krystalwebber/

Krystal Webber on Twitter: @krwebber1

Initiatives mentioned by Krystal in the podcast:

Tradelens: https://www.tradelens.com

FoodTrust: https://www.ibm.com/IBM-Food-Trust/Blockchain

Transcript (Courtesy of Sonix - Apologies for any errors from the AI):

 Anthony: Hello, everybody, and welcome back to the show. We've got a really important topic today, something that I think is often overlooked and underappreciated when it comes to designing blockchain networks or ecosystems. We're going to talk about business value design, and I'm really excited to be joined by a colleague of mine, a good friend, and one of the most inspiring people that I've worked with in blockchain. It's Krystal Webber. She's the global design and strategy leader for IBM Blockchain Services. I know she travels all around the world helping some of our clients and some of those in the community think through the broader aspects of scaling and building blockchain networks and ecosystems. Krystal, welcome to the show.

Krystal: Thank you for having me.

Anthony: So business value design. It's an important topic and something that I know is central to the way that we work together. If you could help us unpick that for a little bit for those who who don't know the term or haven't seen it before. What is business value design mean for you?

Krystal: Yeah. Well, let me first start by putting it in context. So I work around something we call blockchain network design. And really, when we talk about network design, what we mean is what is our intent? So the dictionary definition of design is actually the intent behind an outcome. So when we say design, we're thinking about what are we trying to create at scale, much to the point you just made. And how are we going to get there? And we really see three critical areas of focus where we talk about network design. The first one is governance design. So thinking about the strategy of your network and the operational models that are going to support it. The second piece is business value design, as you mentioned. So thinking about the commercials behind our network, what's our monetization strategy going to be? What's our strategy for incentives? How can we drive collaboration to really achieve network effects? Because what makes these networks really, really successful are driving those increased transactions and collaborations in the network of people. And then lastly, there's technology design. So we've got to build great human centered digital experiences that make people want to use the technology that we're creating in the products that we're developing. And so I think business value design is part of a much larger design framework of how we take networks to scale.

Anthony: Thank you so much for the introduction and design was mentioned an awful lot there. Before we delve into this in more detail, I'd love to hear your origin story and sense of how you started working in blockchain. Obviously, I know that design is a big part of that. But tell me how you found your way into working with blockchain.

Krystal: Yeah, absolutely. So I came into IBM is really part of our culture change toward adopting design thinking at scale and being a lot more human centered in all of the solutions that we put out in the market and the engagements that we do with our clients and really focusing on developing things that are going to be helpful for humans. So I came in and I worked across our service organizations for a few years and first initially starting in our outsourcing business, which was a really interesting challenge. How do you create a great user experience when you're moving to a shared services model and a number of folks are likely to lose their jobs? How do you make that a great experience? So I started by focusing there, expand that to some other areas of our services portfolio. And then we began this blocking services organization thinking about how are we going to create blockchain networks and what does it mean to do it in a way that's intentional and a great experience, both for those for whom we are creating solutions, but also for those who we are working with from a client perspective. So I joined the team back in July 2017 to really start on that mission of what does it mean to bring design into blockchain and to create these really great experiences. And I've been on board ever since.

Anthony: Thank you very much for sharing that. We're not going to go into the details of how do you create a fantastic user experience around process outsourcing and right sizing. It feels like the recipe for a George Clooney up in the air movie... I don't want to take it there. A lot of people ask the question, how do I get into blockchain or what are the skills that I need to get into blockchain? What do you think is some of the skills that you've trained in or that you've developed along the way that have helped you to get to where you are today?

Krystal: Personally, in what I do? There's a few things. I mean, I think having some level of strategic background, I've worked in client services my entire career before even coming to IBM, and that was certainly helpful. You know, I think about a number of the things that I do on a day to day basis. You know, some of the intangibles have really served me well, particularly being able to work with large groups of people to facilitate, to be a diplomat in a lot of situations. I mean, the reality is for these networks, we are often bringing lots of organizations together that may have competing objectives. Also, shared objectives may be used to operating in different types of environments and different types of ways. And I think there's a certain level of, you know, both art and skill. How do you create this atmosphere and create these conditions that allow people to collaborate effectively in a way that nobody ever has before? And so I think some of those experiences and doing those sorts of things through design, thinking through different types of client engagements in the past have really served me really well moving into to this domain. Certainly I had to learn at the beginning. The technology for sure, but certainly a background in business and industry and then certainly some of those soft skills. I think that all been huge assets.

Anthony: Totally hear you. It's been said a number of times that developing blockchain solutions and platforms isn't necessarily a technology problem. It's as much a people problem or anthropology is the required skill as much as it is enterprise architecture. And so nice to hear your perspective on that. Oftentimes we've seen a number of blockchain platforms come out where they said, right. We've been able to develop the solution. We've got a proof of concept. You know, here it is working. We've been able to hash this, create a token for that, put things onto a blockchain network to oversimplify the outcome. What do you think that business value or the governance or the value design side of things is so often overlooked when people say, we've solved this, we're going to change an industry or we're going to change the world. What do you think that's missing?

Krystal: It's overlooked because it's hard. It is not the easiest part of blockchain. I think, you know, bringing folks together from a governance perspective can be really challenging. You know, like I said before, everybody's coming to the network with different intentions. And a lot of cases both if you're a founding member or if you're a general member and you're somebody coming on to consume the services. And we have to be mindful of that. And so that's a huge part of business value design is understanding what value is in it for every single organization that's going to be on the network. And if there's less value for one over another or they're getting more out of what they're putting in or what have you, then we may need to, quote unquote, design additional value for them. You know, perhaps somebody who is getting less value out of the technology or the data may see incentives by having a seat at the table in the direction of the network. Perhaps we may want to consider other types of incentives to allow them to come. Perhaps the people that put in the investment up front receive some sort of discount on the services or on the platform that we're creating over a period of time for being an early adopter. Ultimately, our goal here in all these cases is not necessarily to just create a product. A product does nobody any good if nobody uses it. So our goal here is to create a sustainable and a scalable business network, and that means that we need to be driving value for organizations to join and adopt and change their behavior. And so there's a lot of things that go into making a decision about that. And certainly technology is one of them, but it's not the only thing. There's a lot of other things that drive business decisions.

Anthony: I think there's an interesting challenge there between what some of the public networks or the token based pure token models out there are saying. We actually want to democratize everything. We want to have everything open to all participants and a token as a token no matter who holds it. Whereas actually what we're seeing from an enterprise perspective is if you're going to drive change or if you're going to create transformation, it's not necessarily everybody is equal, although you still want to create a platform that can scale. Right.

Krystal: You know, the word that we use is fair, not equal, because in most ecosystems stay and value chains today, everybody isn't equal. And that's just something we have to acknowledge. So our purpose here is to create something democratic and something fair versus equal. And I think that's a better way to look at it and a better way to think of it as you think about scale and moving towards outcomes that are good for everybody.

Anthony: I think that's a good way of putting it. And what you're trying to do with blockchain platforms, at least in the enterprise space, as you're trying to mutualize much of the activity, you're trying to mutualize or share data where it's appropriate, you're trying to mutualize the cost, because obviously, you know, oftentimes no single party is prepared to pay for the entire network to develop. And your guess, you're trying to mutualize benefit as well. But proportionally with the participation or the contribution of those who are in the network?

Krystal: Yeah, absolutely. Everybody's getting into it for different reasons. And so understanding those things upfront and designing the way that we create the technology, the way we create the business model, the way we create our governance model with those things in mind really matter. The other thing that's really important is acknowledging that we are really early in this technology, in this industry of moving from these bilateral relationships as we talk about business to these multilateral and more networked type relationships. So things are going to change. So we've talked a lot to our clients about leaving the door open and acknowledging, you know, what the goals might be for now and how those might change for the future. We talk a lot about at IBM, we use this metaphor of the cupcake, the birthday cake and the wedding cake. And we've got this idea and this vision for our wedding cake of what we want to build. But ultimately we need to get something out market and we need to test and find out what kind of things are going to resonate with our different users and our customers and those people that are going to come onto our networks. And we better start with that cupcake and defining what that looks like. So. So certainly, you know, the idea of leaving the door open over time, but thinking about what our goals are now and what our goals are in the future, what our plan is going to be is a really important element of this.

Anthony: And that's really good. I love that analogy every time you say it, because I love the idea of wedding cake and it kind of gives me some nostalgia back to my wedding day and some of the most amazing chocolate biscuit cake. I'm digressing, but I think it's a really important point there in terms of you've got to try and envisage what is a scale platform with enough value or enough applications that are actually going to be useful to the network over time. Oftentimes you hear this is a great use case with blockchain or this is a great application. And building a single platform for single application isn't necessarily going to get the most value out of it. Yes, it will prove a point, but actually in the longer term, there are many other things that you can get from having those multiple participants working together to share data, to transact, to automate activity. And if you just start with a cupcake and stay at the cupcake. Actually, you kind of miss the bigger picture.

Krystal: Yeah, I think that's an excellent point. It's one of the reasons why one of the first things that we tried to do with clients is we're starting to engage the founders of an ecosystem and those folks that are going to come together to invest in creating a new network is something called the networking tent. And so we are really sitting down with the founders of the network and really working with them to understand why do you exist? What is the intent of your network? We know what the first application might be. But is that is that the only reason why you're coming together? Or is there a bigger mission and a bigger picture here? And once we have that set, then everything else becomes in service of that intent or that mission. The decisions that we make from a governance perspective, the decisions that we make from a monetization or our commercialization standpoint. Even the decisions that we make from a technology standpoint, if we have our vision to go in one direction versus another, as we talk about the expansion of apps or the expansion of a network, it all goes back to that intact. What are we trying to do? It's really one of the first ways we try to engage with our clients.

Anthony: I think we've laid the groundwork really well here, Krystal. And before we get into the DoubleClick, as I said at the beginning, this show is all about Real-World Learnings, is about practical knowledge that's been accrued by people who are actually working with the technology in the real world. And while I don't wanna give away any secret sauce, obviously mindful that we want to maintain client confidentiality, but as you've gone along your journey with blockchain, I'm sure there's been a number of aha moments or facepalm moments in equal measure. I'd love to just give the audience a view of some of the areas, industries and domains that you've worked. So give us a little bit of history of the different places that you've been at, the different industries and sectors that you've worked just to kind of contextualize your experience so far.

Krystal: Yeah, absolutely. So I've worked with a number of things, some public, some not. We've been pretty public about our relationship early on with the state of Delaware and doing some things in state and local government. I was very involved in a lot, did some early work with IBM FoodTrust. We were first starting to get that network off the ground. I've got some clients in Latin America that I'm working with now on both in Chile and Brazil that I'm really excited about. Some of the work that we're doing there done some stuff in the legal tech space, which has been really interesting, touched a number of things in healthcare as well, scenes and things and travel and transportation that I've been involved with. So it's really been cross-industry. It's been cross all kinds of different geographies as well. You know, everything from Asia to Europe, Latin America, North America, certainly. And it's been a really great journey because what's what's so interesting from my perspective is, you know, while there are certainly nuances in every industry and every market, there are some things that really stay true no matter what. In terms of what it takes to get something to scale and those types of patterns or the things that we really look for to help bring acceleration to our clients. And then, of course, layering the nuance on top.

Anthony: And from that kind of cross-sectoral experience, do you see analogies being drawn in terms of similar business problems or people realizing at the same time that a network or a distributed technology can actually solve a problem in one space that works exactly the same way in another? And you can see that the aha moment happening in parallel.

Krystal: Yeah. You know, I would say in bits and pieces and I would say that because for most of our networks that network intent is quite different. And so while there may be little pieces, perhaps provenance in one area or some sort of financial asset in another, that may be an asset to multiple organizations. They may choose to leverage them in different ways because they have different contacts. So while we may see some network solving similar problems in different areas or achieving similar outcomes in different pieces, I think on the whole networks are existing for different reasons. And their overall mission and how they're solving larger problems looks a little bit different. So I think you see overlaps in parts, but we don't see a ton of overlap so far and a lot of missions of the network.

Anthony: And when you're talking to people in Brazil or Chile or Europe or North America, what do you see them in terms of it observed in terms of their appetite or interest or how they relate to blockchain as a technology?

Krystal: You know, from a technology perspective, I think particularly the innovation side of organizations have been happy and excited to jump on board and do a lot of experimentation no matter where we are in the world. One of the challenges is taking it from that experimentation phase into, you know, we're ready for prime time and we're ready to go to scale phase and making that decision. And so one of the things that I think is really, really important is that we have to set out from the beginning understanding, you know, what are we measuring and what are we trying to achieve and what's important to us. And we need to build those things into the models that we're creating so that we are making the case along the way that this is a financially viable. Not only that, but is also a commercially viable and a problem more solving. And it's worth making those investment dollars to continue to move forward. So I think the enthusiasm for the technology is absolutely there. I think where we've seen people get caught up or stuck in the process is making the business case that we should continue moving forward. And that's why we're working so hard to bring this element of business value design and being considerably more intentional about defining that at the beginning and building those mechanisms into our technology so we can help networks progress considerably faster than it gets.

Anthony: So let's get into it. Let's go to that level down that I promised the audience that we're gonna get some Real-World Knowledge transfer. That knowledge sharing from yourself today. So I'd love to go, you know, maybe line by line across business model governance and then technology. I'd love to kind of pick on some of your key realizations or key learnings from the work that you've done in the space. And again, sector cross-sector. Imagine you're talking to an executive or a group or a newly found consortium. What are the things that you wish you knew or that you would be compelled to tell them as they're talking through governance, business or technology?

Krystal: Yeah, well, let's let's start with governance. I mean, governance is such a buzzword in blockchain right now. We hear people saying it all the time. What I don't think we hear enough people talking about is what governance means and what's included in governance and what do we need to think about. We have recently started using an acronym, BOLT: Business Operations, Legal and Technology. And there's a lot of considerations in all of those things. You know, from a business perspective, we're thinking about things like that network content, thinking about the network model. Are we here for market differentiation? Are we deciding to be a market utility? Are we trying to create a brand new market altogether? The decisions that we make for a business value perspective and a technology perspective are going to be dependent on those things. What's our strategy on branding and marketing, sales, recruitment, adoption? We need people using our technology. How are we going to handle that? So so there's business aspects are a really important part of governance.

Anthony: Can I ask you just to double click on that for a second? I think that's a really important categorization, actually. The difference between a market utility, a not for profit venture, for profit venture, because you just go a little down on what you mean by those definitions.

Krystal: Yeah, absolutely. So when we talk about network models, we typically see three patterns. Now, that's not to say that there's not a mix of any of those out there that might not be more, but we've currently observed three.

The first one would be what we call a market differentiation model. And this really tends to be a founder led network, a network that is looking to either optimize their own processes or to create a differentiated experience for their customers. So it tends to be one heavy hitter taking on all the risk, but also taking on all the reward as well. Typically, you might see this with folks that are choosing to optimize their supply chains, for example, or create a new sort of customer centric app or customer centric experience. A market utility is typically a consortium of competitors. It's the concept of, you know, high tides raise all boats that we're coming in to solve an industry problem and we're all going to do it together. And that's typically where you might see more of these models, like you were saying, not for profit or consortiums or, you know, special purpose vehicles, different things like that generally become part of a market utility led model. And typically those from a business value design perspective. Left less of an emphasis on cash flow. They tend to be more like cost plus type structures, right? This is a problem everybody has. It's not out to be a differentiating factor for us and it's really more of an efficiency play. And then the lesson we have is something we call a new market model. And this is really about creating new revenue opportunities, new markets and is really a wide open playing field. So we see all kinds of different downstream decisions once. Once that choice has been made to move toward a new market because it really is about creating that market and being the first to capture revenue and attract new players into a new marketplace. And so those are the three typical models that we see brought in.

Anthony: Thank you again, Krystal. And I'm going to ask you just a deep one level deeper, just if you've got a favorite example, couple of examples for each one of those so those listening can kind of go check them out or kind of use that as a relatable example.

Krystal: Absolutely. So when we talk it out, founder led networks, we are working with our retailer right now who is optimizing their supply chain. They have a challenge with their reconciliation and deliveries and shipments in warehouses because the retail across their supply chain. And so they're working with their suppliers to better monitor where their items are within the supply chain, along the chain of transit. And as a result, on the retailer side, they're paying their suppliers much faster with much less disputes. And so that's an example of a founder led network where they're optimizing for their particular organization. And then when we talk about market utility, I mean, we have several of these. From an IBM perspective, Tradelens and IBM Food Trust are good examples in terms of we are collectively solving the challenges around the shipping, logistics and in container shipping with Tradelens and food safety with IBM Food Trust. And so the idea that we can create a common platform to help make all of these processes more efficient for everybody along those supply chains is what we would see. And those models, I mean, as we talk about new market models, I think, you know, one of our clients, Plastic Bank, is a really great example. They've created a new network where and they have essentially allowed individuals to become recycling entreprenuers and turning recycled plastic for token credit so they can exchange at local vendors. And that plastic gets resold to large retailers and CPG companies who have invested in sustainability. And so you've created this new market for recycled plastic and that has both individuals recycling the plastic or cleaning up plastic, as well as retailers that are then turning that recycled plastic into usable goods.

Anthony: Thanks, Krystal. I love that third example. Anything related to social impact or sustainability usually ticks a bunch of boxes for me. And I'm always nice to see that those are becoming more tech led or tech enabled models because obviously there's plenty of great ideas out there. But in order to get to get scale or to get broader adoption or to get enterprises to buy in, it's got to be easy to engage with. It's going to be easy to adopt. And even in terms of settlement, reconciliation, you know, there's a token model or there's a point system or any of these sorts of things. The last thing you want to be designing in is, is manual processes, paper, lots and lots of integrations. And so it's nice to see blockchain being used in those sorts of examples.

Krystal: Yeah, absolutely. And, you know, I think something else that's important to mention, too, is, you know, we do we we see these patterns for networks, but we also see a lot of networks move and evolve. So we've certainly seen some networks that have started out as founder led engagements, really thinking that, you know, they were going to optimize for themselves and realizing, wow, our whole industry would work a whole lot better if we had more people doing it. The way that we're doing it, this would be good for everybody and have moved from a founder led model into a market utility model. And we have networks now that are serving as market utilities that have an eye toward creating new markets in the future and wanting to move in that direction as well. So, you know, I would say we talk about leaving the door open and how things are always changing. We've also seen networks grow and evolve and change across those different models as well.

Anthony: So it's that they started with a cupcake around market utility, they've probably enabled a birthday cake around it, working in production and generating at least covering cost. But then there's one eye on becoming a wedding cake in future and actually being able to transform.

Krystal: Absolutely. Sometimes and sometimes they set out with the transformational perspective from the beginning.

It really just depends on what opportunities and what learnings come along the way. I mean, certainly we've seen folks that have wanted to go founder led and realized we can't do this without our competitors and realized, you know, while they thought it was going to be differentiation at the beginning. Really drive adoption and get network effects. It was going to have to be a utility and they were going to have to think about it differently. So there's any number of reasons why people might move around. Some of it might be scale, some of it might be ambition, and some of it might be the market for sure.

Anthony: And onboarding new participants, I think is a really interesting one, because you've got some challenges. Obviously, the early investors in a platform, their equity could be valued differently from those who joined late in terms of people coming in, once the platform is already established, there's less risk. You don't necessarily have to get the lawyers and the financiers out to be able to value it. But generally it's something that's worth considering. But it is off boarding and actually having participants leave and network is probably an equally important thing to consider, right?

Krystal: Yes. So, you know, you just created the perfect segue for me because, you know, we were talking a little bit about this BOLT framework around governance and business. And that next part is really part of operations. And it's actually something that we talk to our clients about all the time. Membership management and our membership policies is a really important part of operations. And everybody thinks about how do we bring people on? Very few people think about what do we do when somebody wants to leave? And what do we do with things like their data? It's a mutable store. You know, in theory, most of our networks have policies of you own your data. But now if it's in the blockchain of our network and you've left, you've kind of left a part of you in this existing network. So how do we handle that? What does that look like? Those are all very large considerations as part of operations. In addition to our our leadership structure and how we think about those things, you know, our decision making processes, one of the things that I really love that we talk about a lot in operations and is a really critical part of governance is the rules to change the rules. So we may have a number of exit policies for our members once we get started. And then in practice, maybe we've had a few people leave and we learned that maybe the process that we had envisioned isn't a perfect process. All right. Well, now it's time to enact the rules, to change the rules. How do we change those exit policies to be better aligned with what we've learned now that we've had a few people go?

Anthony: I love that one. And again, it's just being prepared to accept that things are going to change and not being too rigid as everyone goes out there expecting to become a birthday cake. And actually, it's you know, when there's a mutual realization that we need to become a wedding cake, we need to go back to the bylaws or we need to go back because there's you know, there's IP at stake. There's funding at stake. Different participants may not want to become a wedding cake. I'm fascinated how much cake has come up in this conversation, Krystal. And we end up talking about blockchain, but because your network pivots, not everyone's gonna be up for it.

Krystal: Absolutely. And you know so well, those are all the operational considerations that are really important. And, you know, you mentioned some other things, too, that we really have to plan for. And those are some of the legal elements. So you mentioned IP and and those sorts of things. Those things all come into play as well in those sorts of situations. And when we talk about legal governance, you know, certainly, you know, some organizations are choosing to create a new type of legal entity and there's a whole lot that's involved with that. But even when they're not, there's, you know, always going to be regulatory concerns that we're going to have to keep into consideration things like intellectual property, like we talked about. There's multiple layers of IP on a network, right. There's members bring in IP, service providers bring in IP. We create IP as a network. How do we handle all of those different types of things? And those are really important considerations as well.

Anthony: I've been advocating for a long time that we need more lawyers in the space of blockchain or around blockchain networks or forming ecosystems, because one of the questions I often get asked is why haven't we seen more production examples or more blockchain platforms and networks that have scaled? And the reality is that we've seen plenty. There are hundreds, if not more. But those that are yet to scale are still on the journey. They're actually probably still working their way through a number of these things. And actually, the administration or the planning or the governance or the legal matters at the front end of building these sorts of networks take time. You know, imagine doing that with between two parties in in a negotiation or an M&A deal or something like that. Then imagine it between 10 parties and 10 different legal teams who've never been involved in it in a network before or have never joint ventures with their competitors before. I imagine that's not necessarily frustrating, but it's at least something you have to build into that plan.

Krystal: It's absolutely something that you plan for. I mean, on average, we're probably seeing more and more networks that want to create some level of new legal structure to govern their network somewhere between nine and 12 months for the legal elements to be put in place. Now, there's a whole lot of other things that you can be doing in parallel, certainly. Absolutely. But it is something that you absolutely have to plan for. And there's a lot of negotiation amongst many in-house counsels in and outside counsel as well.

Anthony: That is a really, really interesting data point. And again, for those people who are kind of planning their journeys ahead and thinking about networks, proof of concept, you can spin up in two, three, four, six weeks pilots, you might be able to get out there and go to three months depending on how complex. But imagine just nine to twelve months, the guts of a year to set up a network just from a legal standpoint. That's a really important one to consider as transformation and change and the time to get there. This is not even integration is the zero code at this point is you've got that on your on your lead time, which I think is really important for people to be aware of.

Krystal: Yeah, absolutely. And you know, it's interesting because we see we talk about these areas of governance, design and business value design and technology design. And, you know, they all have their varying levels of maturity. Right. There is a maturity curve for every single one of them. And one of the things that, you know, we talk to our clients about is what level of risk do you have if you're really far along in governance, but not so far along in technology? We're really far along in technology, but not so far along in governance. You know, same for business value design and thinking about how all of those things are intermingled and they all work at play and there's an intersection among all of them. And certainly if you made it really far down the road and building a technology solution and then you're early in governance and just trying to bring on some new founding members who may have different priorities. Well, that may impact what they're willing to invest in. From a technology perspective or perhaps from a governance perspective, you've been spending so much time focused on the legal aspects and getting things together that you haven't written any code. So you don't have anything for anybody to buy. You don't have anything for from a business value perspective, for us to look to monetize or create a revenue model around all of these things are really related and there's different levels of maturity for all of them. But I think it's important to think about how you introduce risk when you aren't thinking about all of these things together.

Anthony: Absolutely. And I'm just thinking just purely from a financial or a P&L perspective, if you're working with legal teams and I would imagine pretty hefty legal teams for nine months, the investment behind that, the legal fees side of this is not insignificant compared to the technology side. So ultimately, the business case for the network you're trying to establish has got to be at least worth nine to twelve months times ten companies, times legal fees equals the base point at which you've got to create value in your network.

Krystal: Yeah, I think some of the other interesting things here is we're talking about business that you designed specifically is, you know, we absolutely have to look in and make sure is what we're creating financially viable. You know, both in terms of people want to buy in, come on and be part of our network, but also to cover the costs and investments that we're going to make on that. Be realistic about what our rate of return is going to be on those things. And we also have to understand our unit of value. What are people willing to pay on and pay for? What do they care about? And that may be different for different member types or different categories of participants as well. So being really open minded about those things and creating models that support all of that complexity and that differentiation is important, too.

Anthony: I think it's so important that the financial case for establishing these sorts of platforms, I think I've had so many conversations with clients, with people in the community when I said this is a great use case or this would really solve this problem or, you know, if we had a platform where we could share data, we would remove the chance of this sort of thing happening, you know, whether that's fraud or whether that's identity management, whether that's around transparency or sustainability. And the question I always ask back is, and it's the saddest story, because you know that there's a technology platform out there that can genuinely have an impact if the first question is who's paying for it and how high is this on their list of priorities? You know, we said in the previous show with Kris Bennett, who I love and he's a real pragmatist around blockchain, is if this isn't as high up on someone's priority list or they're on a vibe towards simplification of their I.T. infrastructure and then networks expanding out and taking on something completely new from a blockchain or a network perspective, it's just not going to fly because it's not high enough on their list of priorities to want to pursue unless you've got a pioneer or a visionary CEO, CIO for that particular organization. It doesn't stack up against other priorities or other choices that they get to make with technology. So it's a mix of right time and right case.

Krystal: Absolutely. And that's why it's so important to understand those things. And certainly, you know, if for one organization, it's a higher priority than another, but they still want to be involved. There are models that you can create that accommodate for that. Right. You can have primary shareholders and secondary shareholders if everybody wants to be a founding member. You know, you may be able to contribute in other ways. Perhaps you've got some level of IP or asset that you can contribute without contributing the time toward governance. There's any number of different ways that you can architect the way that you work together with your partners, depending on what our priorities and the relative value. Again, we're talking fair, not equal. But everybody's going to get out of this endeavor some really good principles to set aside.

Anthony: I want to click on from governance and get back to the kind of the business case or the business value side of things. I'd love to hear your view on some of the early guidance or the key learnings that you've taken away from building the business case for networks.

Krystal: Yeah, I think, you know, there's a couple of things. I think what we're learning is there's multiple layers of business case here. So, you know, firstly, there is the business case for individual founders. Is this worth us putting our investment into and what's our return on that investment going to be over time? How long is it going to take us to realize those returns? There is a business case for the network. You know, if we create a new entity, for example, you know, how long is it going to take that entity to become cash flow positive? And what is that going to look like and what's our return going to be like for that? And what are tax implications and everything else that comes along with that? And then for individual members, as they look to come on your network, they're going to have to be creating a business case as well. Is it worth pursuing or joining this network and all the costs that are associated with it? Am I going to get the value back? So I think, you know, one of the first things that we've learned is business case for blockchain actually has multiple layers and it's not a singular business case. And when we talk about networking, it's a network of business cases as well.

Krystal: I love the network of business cases analogy. I mean, it's especially as the network evolves, it's saying that you're going to have an initial plan as you're out there as a cupcake or hopefully a plan to get to at least birthday cake. But suddenly you start realizing there's a monetization opportunity or part of your platform says actually there's a data asset across this that certain participants might be willing to pay for. How do we value that? How do we share value? How do we actually get the lower end? Let's say you've got retailers or you've got the point of sale participants connected to a network and saying actually the manufacturers of the products you sell might be really interested in the offtake data or the journey at the end of the network from a traceability perspective. How do you offer up to a mom and pop shop or to your local pharmacist or whoever it might be a chance to say, actually, I'm going to pay you for your data and this giant corporation or this large entity that you've never worked with before, you've never had a commercial agreement with actually wants to pay for your data. How do you engage in that conversation? And some might say yes. Some might say no. How do you get to an opt in, opt out? Again, the user experience just around that, that commerciality is something that I think is really, really interesting. And I suspect for a lot of networks, we haven't got that yet. But that's the point is we're on that direction. The data that you see holistically on a network, whether it be industry wide or value chain wide, the cliche is data is the new oil. But actually that data or that data, while it's permissions and private, allows us to do certain things. But were it to be shared or at least shared in anonymized might have significant value to somebody. And that really changes the model of where you end up. But because it's such a new domain or such a new area for these participants, it's really, really challenging to build that commercial case around.

Krystal: It requires a lot of assumptions and you know, it requires projections of slow on target and aggressive and as you know, planning for different types of cases and scenarios, because we are and in some cases inventing markets. And how do you predict and make projections around that? So there are certainly a lot of assumptions to be to be made along the way and looking at, you know, the types of players that we want to come on to our networks and making some calls about, you know, do we want to go after the big players to start or do we want to go after the long tail of small players? What provides us more value and what's more strategic for us and where we are? And that's different from network to network. I also think it's really interesting. And you touched on the idea of buying data from folks. You know, we certainly think incentive models are a really important part here. If there is data that's critical to your network being successful, it may very well be worthwhile to go out and pay for that data to bring it onto your network. Absolutely. I think one of the other interesting things that you mentioned was around, you know, that kind of macro data of, you know, once you aggregate everybody's information and you start to anonymize it, what do you see? And I think even data about data. Right. Metadata and starting to look at trends and that sort of thing, we see so many opportunities in networks of, well, gosh, if I could see across an industry just some level of benchmarking because we have everybody's data, I would at least know whether I'm performing average to my peers or ahead of the pack or below the pack and perhaps make some adjustments based on that. And so I think those are all really critical and interesting opportunities. Are absolutely part of our considerations. And we talk about this and study design totally.

Anthonu: And I think it's something that you will observe over time or it might be something that you put out there as a kind of qualitative benefit at the beginning is saying we're not going to start there yet and it's probably not going to be realistic until we've got a scaled network. But talking about it's very easy to throw out things like terms, data, monetization or new business models, and blockchain will allow us to do all of these things. And we don't know exactly what it is now, but we'll figure it out later. I think it's important not to overcommit or not have your business case be too heavily anchored in those particular intangible domains because you might not know or you might not get the permission or you actually can't value it at an early stage. But it's certainly worth considering. For me, it's the icing on the cake. Jeez, that's a terrible analogy. I'm sorry. Take on the brand. To be honest. This is this is what I do. But but it's it's the kind of fringe benefit sorts. It's it's some extra value on top. But in my head, it shouldn't be the foundation of the reason to do these sorts of investments because you might either end up disappointed or the actual ability to achieve that value is much, much harder to get.

Krystal: Yeah. I mean, I certainly think, you know, there's something to be said about understanding what your risk tolerance is related to those things right there. There are some startups that are excited to jump right into those sorts of new markets and that sort of thing. And for the enterprise space, for more established companies who are going to be more risk averse, it's not make sense. You know, I talk a lot about with blockchain, how I consider pretty much everything a living, breathing thing. Your governance documents are going to be living, breathing entities because we're always changing the markets. Changing the rules are going to need to change. Your technology is always changing. You know, we work in a world of continuous deployment and always making updates. But, you know, there may be the case for your business case to be living and breathing as well as you're learning more about the market and you're making adjustments. You're going to have to make adjustments to your financial models as well. Things are changing really, really quickly. And I think we do ourselves a disservice if we plan for five years out and don't make adjustments along the way because the world's changing a whole lot faster.

Anthony: I think that's really good guidance. And again, strong ideas held lightly is probably the way that some others have said it. Before we close the show, I'm really interested on your views on user experience and user experience design because I know from painful experience most of the early days of blockchain prototype. So kind of some of the user interfaces you see were about as ugly as 1996 Internet. And while I know it's not all about the UI. Tell us some of your kind of key observations or key learnings around user experience when it comes to blockchains and networks.

Krystal: Yeah, absolutely. I mean, again, our goal here is to get to a skilled and sustainable business network. And if we create a product nobody wants to use. If it's hard to use we inhibit our rate of adoption and our rate of growth. So it's really, really critical that we take that seriously. I think, you know, the reality that a lot of people miss out on here is that a lot of these companies that are coming together to create blockchain networks and blockchain solutions come from any number of different industries. Right. We talked about some of those industries at the beginning and their core competency usually is not in technology products, but by creating a blockchain network. They are inherently creating a new digital product company. What's at the heart of a digital product company, its customers and its user experience. And so we have to take that thought process into what we're doing here in all of our networks as well, because we are inherently creating new digital product companies. They are digital native. And so in doing that, interacting with the people who are going to be using our products that we're creating. Understanding the context in which they're using them is really, really critical. So it's one thing to have a nice interface and great colors and something that looks fantastic. It's another thing for it to be usable. So one of the things that I think is just so critical is talking and interviewing the people that we're creating our products for. Once we've created an interface, testing it with them, watching them do it, seeing where they're stumbling, talking to them about where they're stumbling and what they would. And making those changes and those adjustments so that we continually make it better and easier for them to drive adoption, which drives growth, which drives revenue, our cost savings or efficiency or whatever the metric is that we're chasing after. And I I think UXO, the technology piece that that we're creating is a huge driver and help driving all the other business metrics that we're trying to create as well.

Anthony: I took so much out of that just one little segment. It's a really important realization, say that we are creating digital networks, we're in a digital business. So the benchmark for user experience or the design itself is not the previous process you had or, you know, portals or any sort of stuff. We're trying to create something that is as usable as the digital benchmarks that are out there, whether that be Amazon, whether that be Google, whether that be your favorite e-commerce reference or even some of your existing technology, ERP and so on. I think there's a second part to this as well, which is saying that we are in the business of transformation. We're using this technology because either we've got a problem we couldn't solve together before or we want to re-engineer a process that we think is broken or isn't serving as well today. So actually a process design and the way that you manage the process end to end. But then also integrate back into other parts of business flows or other parts of the way that customers or businesses are engaging with you has to be as seamless or as good, if not better than what is the benchmark within the industry. You know, I often see that there's a challenge around when we use tokens or when we use cryptocurrencies or whatever that might be. There is a learning gap or there's an experience gap between wallets, hot and cold. Public and private keys. You know, it's got to be at least as usable as your online banking experience. Then imagine that it from an enterprise context if you're starting to use those sorts of capabilities. How do we make that really easy for the Treasurer or the CFO? Such that it doesn't feel like an unfamiliar experience. We're weaving it into business as usual, the fabric of the rest of the value chain insofar as we're creating value. But we're not creating new pain points.

Krystal: Yeah. And you know, we've got this great saying that we have at IBM that the last best experience anyone has anywhere becomes the minimum expectation for the experience they want everywhere. And we have to realize that our industry benchmarks, while useful, we certainly need to be to be better about those that people bring their human and their consumer experiences to work. And they expect that out of their processes and their products and the things that they do at work every day because they walk around with an iPhone in their pocket and they know how easy it is to have a great experience. And we're doing our users and our networks and our organizations a disservice if we're not taking that into consideration, because it's not any harder to do it in a human centered way. Right. It's just making a commitment to do so.

Anthony: Brilliant. On behalf of the humans of blockchain. I'm really grateful for you having taken the time to to share some of your experience with us today. So much in that some really, really interesting concepts around governance, around the business case for blockchain, around the experience design, around networks and bringing a human aspect to all of it. I learn so much every time I'm with you, Krystal, and I'm sure hopefully the audience will as well. Thank you for being on the show. Thank you for sharing your knowledge. Before you go, tell us what's going on in your life. Where can people find you and what else are you up to for the next few weeks and months?

Krystal: Yeah. So I will be traveling around the world meeting with our clients and I also have a few speaking engagements coming up. If anybody's going to be around, I'll be speaking at the Gartner Symposium around supply chain in Orlando in May. So certainly if you're attending that, please do look at my session. Would love to see you there as well. And then for those of you who may not be attending some conferences, you can always follow me online so you can find me on LinkedIn. Krystal Webber, Krystal with a K, Webber with two B's and on Twitter @krwebber1.

Anthony: Awesome. Thank you, Krystal. Good luck on your travels. I'm sure our paths will cross in the not too distant future. And keep up the great work. Thank you so much.

Krystal: Thank you.