How a Futurist Looks at Blockchain Technology - Lars Thomsen, Future Matters

Transcript

[Music] hello and welcome to the blockchain and us we're pioneers and thought leaders talked about their journey in blockchain technology crypto assets and a token economy and I'm your host Manuel stutters this episode has support from no official sponsor but from my very own the blockchain and us newsletter get an email from me every two weeks with a very short summary of new podcast episodes so you can immediately pick those interviews you'd like to listen to to stay up-to-date just visit w-w-w and ask on and sign up today my guest today is lars thompson lars is

a leading futurist and founder of future matters who has been working with over 800 companies on strategies and business models for the future his main focus areas are the future of energy the future of work and mobility lars is also a frequent keynote speaker and a member of several think tanks and the world future Society in Washington DC and now to the interview hi Lars and many thanks for taking time today good morning we spoke already several times about blockchain technology and also about digital transformation more generally today I want to focus on blockchain technology and also related to other

technologies that might have a big impact in the future but first in your view what role do you think blockchain technology will play in the future well I believe that blockchain will be the underlaying technology for a lot of transformations that will that we will see both in the monetary system as well as on you know society issues until now we have seen a very inefficient way of transacting money currencies or even information and we are on the verge of a new paradigm how we are using a new technology that is now you know

evolving to reorganize quite a lot of systems that we see in the world what kind of system I mean you you spoke about financial financial system finance more generally but you also mentioned information so where do you see it is technology play a role and in many spaces we see that we need a more efficient way of dealing with data currencies and even contracts I mean when we're talking about smart contracts for example when we look in into logistics and you look at the whole logistics chain from the first point where we are mining some materials until

it is consumed and then recycled we have so many points that we have contracts that we need to have tax forms that we have monetary transactions in all these things and we have just analyzed one basic chain just for food production for example and we see that there's 13 to 15 different points where you need to have a paper whether it's a customs form or whether it's a an invoice or a pro forma invoice and all these things and if you can just use the blockchain to to get rid of half of that you would not only

respected of paper but also time and effort and often times when we talk for example about smart contracts it's all about trust that everybody is on the same page or has the same information and it will or it will increase the efficiency of quite a lot of systems and for example logistics is just one small example of where we can see this technology bringing real benefit in the future do you often get clients who approached you with questions about what blockchain technology can do for them it is starting I believe that the community

that develop the blockchain over the last years is a very close community until now and my experience at the moment is that most of our clients are very much in uninformed about the possibilities of the blockchain so it is used quite a lot in some key nodes and in in in in talks but if you are talking to for example executives from the banking industry or the logistics industry or any other they know the term but they couldn't describe what blockchain really is all the benefits of it but it's starting to become more mainstream I mean there's even conferences you see quite a lot of

conferences where blockchain is now being discussed in in some sessions but I think that we are still in the early stage of comedy commercialization but you have lots of clients who ask you what technology can do for them in the future in their lines of business so how important is the term blockchain technology in these conversations or or do they look more at you know other technologies to improve their processes well the funny thing is most of them are still talking about digitalization and I often roll my eyes and say well you know this is not the megatrend of 2018 digitalization has happened over the last 30 years that we did utilize quite

a lot of things because their last interview right now we are getting to the point where we see that okay we have all the data in digital form but how we are going to use them on a system or on a level that we can interact and exchange this data you know whatever it is whether it's a patent application that you can store the blockchain and it's you know proven that that is there whether it's transferring money or assets or storing contracts and and now we are just beginning to realize that the next step after digitalization is

both on the one hand having an under underlaying technology that helps us share this data more effectively and more securely and the other thing is that we are implying more and more artificial intelligence to automate processes now we have seen optimization in the production of goods over the last 30 to 40 years and now we are starting to automate processes services communication and blockchain is very important to that but I still believe that well we probably need

another two or three years before most of the executives really see the benefit of this technology in their particular space somebody I spoke to recently mentioned a term blockchain theater and with that he meant you know people want to somehow also show that they're on board with what blockchain can do I understand but they actually the application is still a little bit fuzzy yeah and I would agree with that statement the I believe that you know when we are going back and we are looking at the Internet and in the first few years after Tim berners-lee invented the world wide web or Marc Andreessen built its

first mesiah Krauser or all the other the first netscape browser on that it took probably five to six years before people could really understand what this technology could really do you know back then we said yeah last night I spent two hours surfing the internet yeah so what you didn't order anything from Amazon you didn't you know chat in your community all these things weren't there at the moment so we had to play with this technology for a little bit and and to be honest even you know even I had problems in the mid mitts of the 90s to imagine what we could do with this platform and even when Amazon started selling its rest books I couldn't

imagine that there are households in us who are getting Amazon deliveries twice a day for for most everything they they consume in their household so yeah we have to start small we have to find some killer apps or some applications that really work and and inspire people to to go further but to compare it with the Internet I think we've just seen the first netscape browser when we are compared to to the blockchain technology mm-hmm and this is something to compare this technology to right I mean that didn't exist exist with the Internet then it was totally new now I mean I often hear this analogy right we're in a

year 94 in you know terms of the the Internet where blockchain is today so that may help yes what about crypto currencies crypto assets tokenization is that also a topic that clients of yours deal with yeah absolutely I mean that has become very mainstream with a Bitcoin rise and falls and you know and it's it's been covered in almost every medium now so everybody is trying to figure out where this is going to and I believe that yes cryptocurrencies are also a in the very infant stage of our

our everyday lives right now they are very speculative currencies I believe that there will be more than just bitcoins I think that we will have a very you know technologies that are very incremental that can be used not only true to trade currencies like dollars or Euros or something but also currencies that have the same security that that the Bitcoin offered on the blockchain but it needs to be much faster and much more scalable than right now and so for example when we are looking and again

when we're looking for logistics for example there are some truck companies right now there they're trying out this technology where they are platooning trucks which is basically the case there's one truck breaking the wind in the front and then there's four or five trucks just using the lower drag behind the the the other truck so that they used twenty to thirty percent less fuel now how do you pay the first truck driver and and you cannot pay that with a credit card you cannot pay it with Bitcoin but if you have like notice where you can have very small fractions and you can you can you can

make that contribution to the first driver every every mile that would be that will encourage quite a lot of efficient new ideas how we can share resources how we occur we can how can we you know how someone can be paid or valued for something that he does with others and I think if if we are moving into a more liquid system where we can easily exchange yeah some values that that that are valuable for us we will see totally new economies and new ways

of using the blockchain and cryptocurrencies the example that you just mentioned with the truck platooning the trucks is this the project that you are currently researching yeah we're researching that and we are also working with companies on the use of cryptocurrencies and and the blockchain in various applications but again right now we are helping companies finding pilot projects that they can trial out we we try to calculate the economic benefits in that and so for example even when we are looking at for example the energy system we are seeing that more and more people have a solar system on

their roof they have a battery that can store energy they have an electric car they are connected to the grid so we have like four different interfaces you know towards the house towards the car towards the grid towards the neighbors where we have to have a new way of selling this energy storing the energy in and finding the right price at the right time so for example when the shot the sun is shining the pv the photovoltaic system is producing too much power so the price goes down but if a cloud comes the price goes up so we have to have and that's what we call a

liquid liquid market system and we know that the more efficient we can regular regulative measure the more efficient the market becomes so the most efficient market is where the price drives demand or up or the other way around demand price the price and that is the most efficient way of using scatterings gas resources so for example for energy something so I believe this technology is also bringing forward the energy revolution or the the use of more renewable energy and this is to say that

you know blockchain is just more than an economic tool or a it is also a very important tool to save our planet and that's in that sense when you look at the full spectrum of the technologies that you did your research on behalf of your clients where does blockchain and blockchain technology and crypto assets where does that fit maybe on order of importance you know is it one of the most important or somewhere in the middle oh no it's not it's not even in the middle it sits below the middle of importance what we are experiencing right now with our clients is that they are overwhelmed by the dynamics of innovation that we are facing we we have

a staccato of news coming in to every industry whether you're working in banking or in transport or in energy and what we are experiencing right now they are following some mega trends they are trying to find new business models how to compete on a global scale in the future how to reorganize work or how leadership shot should function in the future but I believe that in terms of importance the blockchain is not the most obvious thing that the companies see even in banking where we would say

you know this is proud this should be one of your top three pair our priorities too to think about that we experience that when we're talking to executives who really have the decision power where to put efforts talents and money blockchain is not on that top three I don't know probably because we are in a stage where there's quite a lot of confusion within established companies they're trying to defend their whole business model and and blockchain is basically questioning very much the essence of their business model but on

the other hand I believe that we will see players both in the banking or the insurance industry or even in the logistics that focus on blockchain technology are actually building upon blockchain technology and they will be those disruptive players in the market where we are not talking about incremental innovation where we are just adding to the existing model but we'll be taking a clean sheet of paper and say okay how can we solve the the problem or the business proposition that we had using a new technology base and well I believe it'll take another probably two

or three years before we actually see new global companies working on that base but on the other hand I mean we're when we do an essay two to three years many will probably think oh this is a long time we're talking about a hundred to one hundred fifty weeks and that's not not a long time so by 2020 2021 we will see blockchain based insurance blockchain based gistic companies blockchain based providers of energy or decentralized energy to the solutions but it'll probably take another two or three years will those be new entrants or will those be incumbents who just reorganized most

likely there will be new entrants we see quite a lot of activity in the startup scene around blockchain we see quite a lot of activity in venture capital and capital and localization that go into this technology so it's easier to found a new company on a new paradigm then to try to put a new business paradigm over an old incumbent and the way that the world works is that the incumbent needs to then decide whether to buy the the new company and/or the start-up or to

trust that their customers will never buy this new service a product which often is a good recipe for failure mm-hmm interesting so you said the many of your clients see this technology or this cluster of technologies of ranked very low in order of importance but for you personally you know with a 50,000 foot view where do you see it on a scale of importance but for me I believe that we have quite a lot of problems that we can only solve then when we are using a new paradigm in a new yeah a new paradigm in technology and I would order blockchain technology

with in my top five important mega trends that we are looking at right now one is that we are calling it one mega trend is what we often call as the end of superior T which is basically artificial intelligence helping us to transform many aspects of our lives and businesses where we have pattern recognition where we have self learning systems where we have the ability to understand complex things much faster and then I ranked number two is probably our conversion how we are dealing with

scarce resources and energy and and in all these things and and then blockchain would probably come in number three at the moment but for itself it it is a very very important platform to enable good things in the future and I still believe that most of our biggest problems that we are facing as humans for the next 50 years can easily be solved if we are just creative enough and use the technology are the tools that we are that we have created over the past years and blockchain will transform that on the other hand I see that there's quite a lot of resistance coming from old industry players that

are not very fond of this new technology and because of its disruptive nature we will have quite a lot of lobbying and forces trying to to slow down this process as far as as much as I can I want to ask a few questions about your approach to to doing these consulting projects with clients let's say an a big incumbent comes to you so how does such a project unfold well the basic question is how are we are going to earn our money in 10 years from now who is going to pay us for what and how we are going

to process how we are going to deliver to to produce it to believe to deliver our products and services we're also looking at the changing of customer behavior so we see some mega trends that that are very easy in their essence we always say that if you're going to if you have a technology that enables to enables us to do something that we used to have better cheaper more efficiently safer well easier then eventually it will be adopted by quite a lot of people

so for example back in history there was a time where traveling on a horse was the most efficient way of getting around and it took some time before we are starting to move away from the horse and using whatever kinds of transportation that we have today and that is what we call a tipping point now in the past we have always adopted technology that makes things easier because we strive for a more comfortable life so when we are working with clients we have trying to look at first levels of first level reasoning how we are calling it to try to remodel business models to to rethink

how you can reach customers how you can find efficiencies in your processes and yes we are also putting our focus on on new paradigms like blockchain oftentimes you know this is one of if a couple of disruptive opportunities that we are having and oftentimes then the the actual possibilities are explored by special debt specialists or or or some other consultants that go much much deeper than we do what are processes that you use I mean first is

the you know the problem definition maybe and then you you come up with some ideas to explore but but how exactly do you go deeper there let's take a quick break for a message from our sponsors this episode has support from no official sponsor but from my very own the blockchain and us newsletter get an email from me every two weeks with a very short summary of new podcast episodes so you can immediately pick those interviews you'd like to listen to to stay up-to-date just visit w-w-w and ask aaahm and sign up today what are processes that you use hmm well most of it is common sense and it's most

of it when we are do consulting we we have this hardest to describe first when we are looking at a trend and you're just following the trend line you're you're basically not seeing the whole picture what you're trying to do is to understand a bunch of trends that have interaction that have what we call cross impacts that have a different dynamic than the world around us you know the the most trends that really transform industry or our lives are much faster than our normal life so understanding the dynamics of a system

is one thing and the interaction between trends and technology the other thing is to get a deep understanding on how technology works once you know how a machine works you can easily imagine how to improve it and the same is true with monetary systems or economies you know all these things and the other thing is you know implying fantasy and intuition and creativity to think what could be possible when using this technology and the funny thing is well we are very creative when we are young you know when

you're talking about two to a four year old or five year old I mean they have a great fantasy you know to imagine things and over time this decreases and oftentimes we find it hard for managers even engineers to have the freedom to think the unthinkable or to really think new on and on technology so sometimes we're just encouraging people to be brave enough to imagine something that is not there yet but that is not a you know just continuation of what we know to

give you an example I mean even ten years ago if people would have said yeah everybody will have a smartphone even our children and they will have a basically a TV studio built into it and they have their own TV channel that they can reach millions if they want to with their you know with their videos or a podcast of you know whatever even ten years ago people would have said it's that's too crazy to think and today we think it's totally normal yeah you know you can do that and so when we're talking about blockchain and saying okay yeah yeah you have an automated backbone for all your contracts information

payment systems and everything that you need to exchange in a secure way will be taken care of I mean it's just working people coming to us no no no no just look at our our office it's full of paper it's you know it's it's a total mess and it's it's very hard for people to close the picture that they used to know and to open up a new picture what could be in the future and so that's the third part of our journey and it's just enabling or encouraging people to be creative and using their fantasy what is usually an output of such a project that

differs oftentimes we are we are disappointed right after a project because when we are working with a client we have internally quite a lot of discussions what we would do and what we can should suggest and and how we are going to you know build this fact or map and the future map that we are working on then and then when we are working with clients about 90% of that is just in abandoned or tell the the client says no we don't need that and why is that they don't believe it or their technique it takes some time to get used to new ideas and the first reaction often is no

yes it's not very common that people say yes to every new idea but over time and this did this idea is in your head and a diverter develops and when we go back to clients that we have consulted like three or five years ago it's it's amazing you see all you know even to those things that they said no to they say well we have a new business unit that is doing just that and you know it's just a great thing that we've done that nothing often they think they they even say you know that was our idea well in the short term we are disappointed and in the mid and long term oftentimes you

see that magic is happening and I'm I have to get used to the fact that well if there's something new you find just a very small percentage of people who are saying yes to it at the first time but over time once you seed an idea into a one's head it becomes yeah it eventually grows mm-hmm interesting point I mean I remember you mentioned something like this last time where you made a whole concept for one of your clients how they could save you know fifty or sixty percent on certain processes and and they just didn't do it because it would have threatened what

they're currently doing so how do you deal with this tension between that you know that come incumbents often have between their current business their current sources of revenue and potential new streams of revenue well personally I really have to tell you I am oftentimes when I come back directly from the where we what we often do is future laps where we are taking our time two or three days and just working on future concepts and when I get home I often tell my wife you know it's so frustrating but on the other hand I have I'm right now starting to learn that I

have to be more patient with our clients the other thing is it is far more easier for a startup to to work with a new idea and to put their total focus on on a new paradigm and to build from that then to then trying to rebuild an organization with a new idea and and that is a natural process and I often compare it if if you are looking into a forest yes they are old and big trees that that have been standing there for 200 years

but eventually they give way for new plants that need the light that actually comes and in grow big again and the chances of having a company that survives more than 50 years in business are only about you know 20 percent so if you look at the history of companies about 80 percent died over time only 20 percent survive along a period in the 50 years so the odds are against the incumbents although we always think no but you know history shows it is what about incumbents that may not see

themselves as incumbents companies like Apple Google Facebook what about their business models well that takes quite a lot of leadership and and I believe that as long as you have someone at the top of a company that still has the intrapreneurial spirit who is still driven who is still paranoid about other companies that drive the drives those company most of the incumbent companies that I would call incumbents are led by managers and not the founders of the companies and they're just looking at their shareholder value they are how

they're going to make the quarter and they don't have the vision anymore oftentimes big companies even outsource the vision or the creation of the vision oftentimes to an advertising agency I mean okay come on what can they do to improve the vision of the company so when we are looking at companies like you know Amazon Google Tesla they are still people at the top who still work on their vision and who still improve their leadership by thinking ahead and oftentimes they have a very strong core

value so when you look at Google for example I mean their mission is not completed yet - - - to make the information that the world creates accessible to everyone you know to the benefit of an individual or society or whatever yes I mean and not to be evil what they say actually their success and their innovation is the biggest problem at the moment because they are still striving for this very simple goal in more and more aspects of our lives and society but still there you know a company like Google for example how

ripe for disruption is such a company by a new technology like the blockchain well you know there will there will be always small startups who have a much higher dynamic than a big incumbent and that is probably the biggest challenge for those who are you know they'll say the semi incumbents that we've been talking about the last minute how you can encourage creativity and also the strive for new opportunities from Ace idealistic team

and well the bigger you get and the older you are the more stuff you have to carry along I mean the more people you have to inform the more departments you have it gets it's pretty pretty crazy mm-hmm but do you think Google will still be around in five to ten years yes I would think so yes Google and other companies now what I really like about some of the companies that have grown to such a size like Amazon or Google or probably even Tesla in the future is that they are still hanging on still

still in there to change the world and as long as you have this ambition you will do that you will not do succeed in every field but and and I say if you really sum up the things that they've done and the errors that they've made I think it's still a positive outcome although there's quite a lot of criticism but there might be companies that have the size of Google in ten years from now that it not even found it yet so we are living in a time where you can you have access to information to people to talent and to money and you

can found a company within a few weeks and you could be you can be a global player within two years and you can be dominant in an industry within five years that's never been the case and so I believe that there will be companies besides Amazon besides Google besides Tesla that we don't even know their name yet and they may eclipse what Google currently is maybe um I mean you really think about the blockchain and you you would find a a company that really solves well just one or two problems in in transaction whether it's with customers or among businesses or

with money or contracts or whatever just imagine I mean while we are talking here every second there there are there are hundred thousands per second that are still being processed in the old-fashioned way and if you can just grab a you know 20 percent market share from that and you can you know just you know if you'd earned just a tenth of a cent on every transaction I mean you would be richer than the biggest oil companies today you also think a lot about the future of work and we spoken fight a lot about that in the past today already a lot of people are working in

decentralized way in a sense right they work maybe in their own business they have their own company a one-man company sometimes or they work you know from home home office in that kind of way but how do you see work change even more in the future yeah it will it will change even more yes and and that is the reason why we are we are exiting the Industrial Age the the past 150 years were basically very much influenced by people working together with machines in the takt or in the in there in the way

the machines would be able to to be more productive over time and we have something like you know 40-hour work weeks we have a measurement how much time we are spending within a building you know for an employer or something and that is changing quite all right dramatically right now in the future we will not pay for time but we will pay for talent or for problem solving capability and that that also changes the metrics for example payment giving an example I mean I'm working as a futurist and I'm spending about six to eight hours a day I'm just learning about the future studying things that I I didn't study

when I was young and trying to get an and new insights and then connecting the dots basically now nobody pays me for that I have to be repaid in my projects when somebody asks me okay how much do you cost I say you know I'm not being paid by the hour because you know the the hourly wages could never pay these six to eight hours that I spent every day to gain that so I would rather be paid by my problem solving or capabilities so so we are actually telling our clients we are not

calculating with hourly wages or days that we are charging we are calculating what we call value-based pricing so it is finally if we are able to solve a problem in a day and somebody else needs a hundred days to solve the problem our day can be hundred times more expensive than the other ones actually more expensive than a hundred times because we are faster so and that is a very big paradigm shift in how we are measuring work how we are varying value and we're looking at experts at the moment so when you are an expert in in blockchain or an

artificial intelligence I mean you can basically choose where and how you're gonna work and and who for you're going to work and the other thing is that we will have quite a lot of artificial intelligence that was going to do the routine work that is comprising right now to 70 to 80 percent of what we are is answering emails is doing our tax returns it's you know just routine stuff that can be done by artificial intelligence so I believe in a few years from now we will not be talking about

40-hour work weeks we will talk about weeks where we spend time learning time helping others with our knowledge yeah getting smarter you know every one for its own sake but the change that that work is experience is experiencing right now is it has a big shakedown to the economies that we are experiencing today and I believe that even when you look at developments in politics and then democracies over the last two or three years you can already sense what is coming people are scared of this change the technology is

moving faster than society can adapt and that is one very very important thing to watch over the next year's how we are taking along the people with the capabilities that technology provides us what are skills that people need to make the most of their talents in the future curiosity is one of the most important skills to be able to use their creativity and fantasy to imagine you know actually when you're when you're doing future research or you are

planning something it is very simple it is totally simple and it's something that is very common in our lives so for example if you're thinking about where do you want to spend Christmas this year you are coming up with pictures in your mind and trying to imagine what would be the most satisfying scenario for you so you're imagining something that has not happened yet that is in the future and you start to and you're starting to communicate with others if they want to come along and you're renting a cabin in the in in on the hill and all these things and and

that is common to us but in business if you're asking a business leader if he's using fantasy to go to come to a point where he says hey this is great he's not doing that he's looking at numbers from the past and that is quite sad because one of them unique things about humans is that they can create in their mind a state where they want to end up or where they want to go and a valid picture of the future and the possibilities that we have helps us to find the way into the future it doesn't help us to look at the data of the last 10 years because when we are looking at disruptive things you cannot find the

disruption in the past you find it in the creativity when thinking about the future and so I believe even in management and in an executive search we would should we should probably look for other types of leadership and management to enhance this capability within companies - to just - to ensure their survival ok let's hope that will that will happen soon and as always when we speak it's very fascinating we could go down much deeper on any of these topics that you touched on and hopefully we can do this in the future as well but for now I really appreciate your giving us this

insight about what you think about blockchain technology and the future and I really appreciate your taking time today thanks so much for joining us today more info on our guests and our sponsors isn't the show notes of this episode and on the podcast website the blockchain and ask.com to help people find this podcast it's important that you download subscribe and give it a top rating and review on iTunes or on the podcast platform of your choice I'm Manuel staggers and I thank you very much for listening [Music]