Will Global Corporate Barons Need To ‘Crypto-Coin’ Their Own Money Soon?

In history there are times when members of the ruling elite got big enough to start printing their own money. Are we to see corporate cryptocurrencies like CokeCoin, BigMacCoin or GoogleCoin soon?

According to James Ricards last time (in 2008) the central banks could bail out the banks but next time those central banks will be the ones to save. In his new book ‘The Road to Ruin‘ he claims that in the upcoming financial crisis the IMF will be the only one with enough credibility to bail out the central banks and hence save the global financial system.

Could it be that to the problem of the ‘too big to fail’ commercial banks and to the centralised debt of central banks the solution is more centralisation of debt by the International Monetary Fund? Well, it could, but what if…

In medieval times when the treasury (the royal mint) went too far decreasing the gold content of coins and the barons were influential enough there was another solution to the problem of centralised debt:

Bigger medieval barons started to mint their own coins and accept payments only in that new form of money.

Today our global financial system is sailing unchartered territories with its unprecedented amount of debt. And today global companies are larger by size, influence and local presence than ever before. This situation enhanced by digital payment methods might reinvent the ancient solution of alternative money printing.

What if a global currency crisis wipes out the traditional currency units (USD, EUR etc.) and as a reaction McDonald’s or Apple Inc said: “…We had enough, we will not stand by watching our immense pile of cash melting away!..” And they introduce their own cryptocurrency (e.g. BigMacCoin) pegged to their flagship products (e.g. 1 BigMacCoin = 1 Big Mac).

Couldn’t some interchangeable corporate cryptocurrency bring ‘balance to the Force’?

Crypto assets of international corporations that would be locally accepted and backed by intrinsic value of their services or products could serve as cash and also as store of wealth.

Yes, this is a brand new possibility but very feasible. The tech environment (smartphone penetration, blockchain, fin-tech, etc.) for such phenomenon has never been as ready as it is today. So this will eventually happen in some form one day. And let’s ask: Why wouldn’t a global corporate crypto asset be popular? Who wouldn’t keep some money in CokeCoins in a world where inflation or deflation, Trump or Brexit could come and go but a can of Coca-Cola steadily stays what it is: a form of peaceful continuity in a hectic world.

As a sales consultant of emerging markets I can tell: most international brands are already more trusted than the local currencies.

Yes, there are global crypto assets like Bitcoin already but none of them is backed by global brands. And still having a look at the success of current cryptocurrencies with shady or unknown origins I am sure that there is a big community that cannot wait to put some savings in such corporate crypto assets once they start to exist. From a crypto investor’s point of view it is very hard to find any safer and still liquid financial haven.

So summing it up: there are a long list of benefits of issuing corporate crypto assets but big brands are famously slow to move. So who knows? May be a global financial turmoil would call the attention of global businesses to embrace the crypto asset possibility…

more on crypto assets

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Blockchain for Sales Motivation and Company Financing – WHITE PAPER DRAFT

An employer issued crypto asset can motivate the salespeople to work harder, to have high sense of ownership and to become more loyal to the company during and after the employment. At the same time such distributed ledger technology based system can provide cheap credit for the company.

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The audience of this white paper

This document is for VCs, angels, board members and CEOs who are facing challenges in sales motivation and/or short-term company finances. The involvement of blockchain technology can provide new solutions to some old issues specifically in IT related and startup environment.

Typical problems in sales motivation

There can be many issues in sales staff motivation but let me highlight three major problems with salespeople that managements are facing today in sales:

  1. Short-term thinking
    Most salespeople are motivated by tangible motivators such as base salary, commissions, target related bonuses etc. For them the best money is the quickest money even at the price of later disappointed clients. Most salespeople would close a deal as big as possible without considering the long term interest of a client since there are no long term considerations in his motivation system. In high-added value services it often takes a longer period of time for a client to realize that the service sold to him was overpriced or oversized. But when such realisation happens the client relationship suffers an irreversible damage or ceases to exist.
  2. High sales staff turnover
    Depending on the industry it is safe to say that usually the highest staff turnover is in the sales department. Without a deep analysis let’s just say that the average sales job requires less qualification and more depressing workload than other positions at a company. And these circumstances (among others) lead to high HR fluctuation among salespeople.
  3. The lack of sense of ownership
    If an internal employee doesn’t have some sense of ownership that can have a short-term impact on team spirit, reliability, careless usage of tools etc. Such internal attitude is damaging but easy and quick to detect, isolate and solve. But if a salesperson does not have the necessary sense of ownership that can have a long-term impact on client relationships, customer loyalty, brand recognition and revenue. There are many sales communications that are hard, illegal or impossible to quality control. Such as personal meetings, phone calls, instant messages etc. Hence it is hard and long to detect, isolate and solve damages done by demotivated salespeople who does not have regards of the company’s future.

Failing traditional solutions in sales motivation

There are certain traditional ways of solving problems in sales motivations. Below there are some of the most common approaches to tackle sales motivator issues:

  1. MLM-like intangible motivators
    MLM systems are infamous of creating motivation systems made of hypnotizing intangibles. MLM systems make you believe that you can make it if you work hard enough. (Presenting wealthy role-models who made it, celebrating the top achievers in sports arenas, exhibiting your future bonus Ferrari, promising double payouts over sales targets etc.) There are special prerequisites (sales team size, company size, etc.) to create such motivation systems that are unavailable for most companies.
  2. Generous compensation packages
    Money is not always a good cure and often it is contra-productive offering huge compensation packages for salespeople. If the compensation is significantly beyond the average needs of a sales colleague the abundance of money statistically takes away the drive. On the other hand the ever-shrinking margins limit the management’s ability to overcompensate its sales team. (Not to mention that it is not proven that short-term money alone could create the necessary sense of ownership and loyalty towards the company).
  3. Shares, stock options
    Since ancient times the best motivator of the workforce is ownership or at least the promise of it.
    If a salesperson is shareholder of a company he cares about the future of the company and his investment in it. He wants the best things for this company: long-term relationship with its clients, good team spirit and the best use of its market opportunities. Today many companies offer stock options for their salespeople as a compensation of achieving targets. In this case stock option means that the sales invests their work today and the result of the work could qualify them to become future shareholders. This requires partly compensated hard work today, long term thinking and patience (which means trust in the future of the firm). For publicly traded companies this is a way to go.
    But for small companies and startups before an IPO stock options or even upfront shares are shaky promises. There is no or limited market for their shares and definitely no secondary markets for the stock options of such company. (Not to mention the fact that administration of ownership changes of a private company’s shares or stock options require expensive and extensive legal and notary services.) So from the salesperson’s point of view what could be the benefit of holding a microscopic fraction of a company’s stock options or even shares if there is no feasible way of trading? Moreover IPOs are few and far between and it is impossible to predict when they could happen or would happen at all. Anyway most sales people could not care less of a could be IPO 5 years from now. If we want our sales to work hard today we must give them the sense of ownership today. If there is no feasible financial way out (quick exit), then our promise of ownership, the motivator, weakens and fails.

Blockchain and the sense of ownership

Many companies use point systems to measure and motivate their sales team. Such points can be achieved by closed deals or the sales of preferred portfolio items, etc. and can be lost by time or not meeting certain quotas… etc. These points can be regarded as IOU tokens of those companies where the point-system administration depends on the company. Hence trading and secondary markets are limited or restricted.
With blockchain technologies a company can issue a crypto asset based point system that represents certain quasi-share like promises of the company. Since all related characteristics of a crypto asset can be made transparent a trustless environment can be created. (quantity of issued tokens, number of holders, market price, trading history etc.).

At each period of payouts salespeople can be offered the choice of receiving their due commission in cash or in a quasi-share like company IOU. In the days of negative interests and unpredictable bluechips many salespeople would take the opportunity to invest (leave their money) in a company where they can actively influence and benefit from the success of that enterprise. Beyond having the most means to increase revenue salespeople have the most information and the most accurate estimation of any possible revenue growth of their own company.

Beyond creating the sense of ownership among our sales staff the crypto asset issuing company can get cheap financing for its operations.

Use case (example)

Acme Inc (fictitious entity) had 1 million USD revenue last year. Acme Inc has 10 salespeople and quarterly 5% of its revenue is paid to the sales team as sales compensation (commissions, bonuses etc.).

Acme Inc issues (1 million) Acmecoin, a token of IOU, that represents certain promises of Acme Inc toward any holder of the coin (crypto asset).

Acmecoin promises

  • The number of issued Acmecoins are always limited to the amount of last year revenue of Acme Inc. (preventing diluting the value of the crypto asset)
  • Annually each Acmecoin holder receives the proportionate amount of Acme Inc profit – a sharelike – dividend payout feature. (Even if Acme Inc has a very weak EBIDTA margin of 5-7% that is way beyond most available market ROI for small-investors hence it is likely that most employees go for such investment opportunity with their surplus income.)
  • Quarterly Acme Inc offers to purchase back Acmecoins at face value.
  • Sales people can freely decide if they want their due quarterly commissions paid in Acmecoins or in cash.

Ways of trading Acmecoin

  • Salespeople can earn Acmecoins by regular sales activity as the quarterly commission payouts can be partly or fully in Acmecoins.
  • Salespeople can freely trade their Acmecoins among each other or with any third party at any given price.
  • Anybody can buy Acmecoins from any Acmecoin holder who is willing to sell on crypto-markets or OTC.
  • Acmecoin can be exchanged for anything that the two parties can agree upon
  • Acme Inc purchases Acmecoins at each quarter by offering face value price, this would offer the minimum of 90-day free credit for Acme Inc.

Summary of benefits

Such sales motivation crypto asset system can create:

  • the necessary sense of ownership among salespeople
    (long term thinking, loyalty, interest in smooth operations, team spirit, interest in sales team development etc.),
  • stable passive income for asset holders at a verifiable profit rate that they can positively influence by working harder and most efficient,
  • short-, mid-, and sometimes even long-term finances for the company
    (if 20% commission is paid in Acmecoin that is 1% revenue worth of free credit for the company at the price of 1% profit),
  • a first hand feedback for any board about the reliability of sales forecasts,
  • disciplined ex-employees (as long as they remain asset holders they maintain their interest in the success of Acme Inc)…

Crypto assets

Crypto assets are blockchain based unforgeable, tamper-proof digital tokens that can represent any promise of an entity. (Such as a bond or a share or any type of IOU.) Easy, fast hence cheap to trade or exchange. Easy and fast hence cheap to check their quantity and velocity (number of issued tokens, number of holders, trade history etc.) Basically a crypto token based company IOU can offer all the benefits of an IPO without all the expenses and fuss.

Further considerations

There are many variables and decision points in such blockchain based sales motivation system that must be structured and fine-tuned during a consulting project before the launch:

  • Blockchain readiness – assessment (IT culture, legal concerns, HR survey etc.)
  • System introduction to sales team (internal PR),
  • Suitable crypto 2.0 platform selection,
  • Jurisdiction compatible naming conventions
    (investment vs reward system, loyalty points vs. crypto assets, dividend payouts vs. revenue share, etc.),
  • Secondary market regulations,
  • Fiat currency vs. crypto asset exchange facilitation,
  • Best and most feasible ways of revenue share / dividend payout,
  • Introduction of a fiat pegged crypto asset for trading in crypto-exchanges with 24-7 exchangeability,
  • General risk assessment,
  • Cyber security,
  • etc.
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4 pieces of advice on: How to sell a blockchain project?

Either Goldman Sachs, or the US Department of Homeland Security or the Russian National Settlement Depository no matter where you look, everybody agrees that Distributed Ledger Technologies (DLT) are here to stay. But let’s go beyond enthusiasm and see why DLT companies starve to death after the seed-funding is gone?

Eager venture capitalists can jumpstart any blockchain business still excited leads won’t pay the bills but properly convinced clients…

Focus on B2B

By today it is obvious for most crypto businesses that it is not the B2C crypto market that supports the business. Bitcoin’s price volatility brought consolidation to crypto exchanges, wallet services and mining pools all around the world. The time of B2C will have come one day but not quite yet.

It is B2B, staff accordingly

You can easily run a porn site with two mid-aged, fat guys in a garage but if you are about to run a strip club you will need pretty girls. Since we agreed that blockchain is not for B2C, face it, even the best cryptographers and C++ developers will need professional B2B sales people with the proper consulting selling skills. Get B2B selling pros for your sales!

Target well

As a B2B sales diagnostician I have seen too many times that with the wrong lead profiles DLT startups will continue heading South. If you are not ready (by size, networking, references etc.) to target international financial institutions, just don’t! No matter how well your blockchain solution would fit their needs. It just won’t happen. Find you target market by analysing your strategic position!

Do it right

If you have the right sales force targeting realistic B2B prospects they will still need to follow specific protocols for selling blockchain solutions. After helping several blockchain businesses I can safely say that selling DLT is a knowledge transfer process. Such sales processes must be dominantly consulting driven. Don’t forget, talking about something disrupting means that most of your leads won’t have the necessary vocabulary to understand your blockchain related messages. So you have to build their blockchain vocabulary during your sales communication.

Distributed Ledger Technology is a great B2B sales challenge it deserves to be approached professionally.

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Only Blockchain Businesses Survive

According to an Accenture slogan from 2014:

…every business is a digital business…

and it is very hard to argue with that statement. Now how does it sound to say that in the future…

…every business will be a crypto-asset business…?

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Few years ago there was a young gentleman who, intentionally or unintentionally hard to tell, but changed online content management forever. He made a whole generation to become photo-reporter, editor and publisher in one. He was Mark Zuckerberg and his tool for his accomplishment was Facebook.

What if someone told you that in few years from now everybody will be his or her own central(!)-, and investment bank and a brokerage in one? The crypto/blockchain 2.0 technology for such a change is just as ready today as all web 2.0 tech was ready on Feb 4, 2004 (the day of Facebook’s official and humble launch).

Actually most online service companies already are digital asset/currency-issuers we just don’t look at them like that. For example when we top-up our pre-paid mobile phone balance we exchange our fiat-currency to a fiat-currency-promise (IOU) of the mobile carrier. We can pay with the balance for the given mobile service we can even pay with our balance for certain services like parking, online games or a lottery-ticket etc. in the form of a text message (SMS).
And there are only some, though major, differences between a typical crypto-asset (like bitcoin) and a mobile phone pre-paid balance from conceptual point of view:

  • mobile balance or air-mile is typically a one-way street – we cannot withdraw our balance back to hard-currency,
  • we cannot transfer our balance to somebody else / to another prepaid card or frequent flyer,
  • and we don’t know much about the technical details of how our balance is secured.
  • (of course there are a thousand more technical differences I just cherry-picked some for the sake of the conceptual point of this article)

All in all today there is no secondary market for most of our online balances (like mobile balances or air miles or other loyalty points). But there are some new promising cracks on the old legacy systems that supports the direction toward new ways. There are some pre-paid cards and loyalty systems where you can transfer the ownership of the card (or trade with your balance) if you find buyers for it on a typical secondary market like eBay or you can pay for certain services (ex: VPN) with your loyalty-cards’ balances.
Now, if you have a look at some crypto 2.0 systems like Ripple, NXT or Counterparty(and there are others too), it is safe to say that the tools and the techs and the foreshadows are all there for a financial paradigm-shift.

And if Chekhov’s gun is already on the stage all we need is a good script ?

I am a sales consultant so I can’t talk about any other aspects of the coming crypto 2.0 revolution but the sales implications:

Do you know why you call your sales reps – representatives?
Because their job is to represent your business, right?

But why do you need people on your payroll to represent your business?
Because without being paid for it nobody would do that!

Could you image your revenue having thousands of eager sales representatives of your company? (and none of them being on your payroll!)
That is what an initial crypto asset offering (ICO) can deliver to you.

Have you ever wondered what makes most bitcoin-bugs so bullish about Bitcoin’s future when they talk to you?
They are all aware that the only thing that makes their holdings appreciate is more and more buyers-holders-users-believers of bitcoin. Their well-understood financial interest makes them enthusiastic and bullish when they talk.

Now, why don’t you create your own enthusiastic crowd to represent your business?
If your company’s dominant lead sources are either word-of-mouth (WoM) or personal recommendations you should consider the following 8 steps:

  1. Start following some crypto-asset projects
    (on Twitter and on their own websites)
  2. Get involved in one or two crypto assets of your choice by some micro-investments (with some small amounts)
  3. Study their project structures
    (communications to asset holders, revenue/reward distributions…etc.)
  4. Issue your own crypto-asset (token, currency, equity…etc),
  5. Set a policy of frequent cryptocurrency distribution to all holders of your crypto asset
  6. Set a policy for some value guarantees of your crypto asset
    (Ex.: by accepting it for your services/products at a fixed price)
  7. Market heavily to find buyers/holders of your crypto with the right profile
  8. And finally watch and see that all holders of your crypto with the right profile will turn into eager advocates of your business having a common interest of raising your revenue and their share of it.

Issuing a successful crypto-asset sounds just as simple as building a strong Facebook community by having interesting content and engaging interactions on your Facebook page. And it is just as complex and hard and expensive. But at the same time managing a good crypto asset issue (Initial Crypto Offering – ICO) is just as beneficial as having an active social community if it is done well.

…in the future every business will be a crypto-asset business…

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