I’ve known Jeremy Epstein for years going back to his days at Microsoft. But over the past couple of years he’s been one of the leading voices in the blockchain space, working with a variety of startups focused on bringing the technology to a host of industries. So I try to touch base with him from time to time to see how things are progressing in the space and what implications are starting to emerge. And of course one of the areas I’m keeping a special interest in is how blockchain could impact CRM.
Blockchain and CRM
I recently caught up to Jeremy, and I mean literally caught up with him, as we recorded a conversation while he was walking in the forest near his home. So this was definitely a different kind of conversation, but a fun one in addition to being extremely informative and insightful. And we cover a lot of ground as Jeremy Epstein touches on the current state of blockchain development, how the number of tech startups has grown roughly 20X over the past couple of years, the industries being impacted the most, and his future prediction of how blockchain will disrupt CRM as we know it today.
Below is an edited transcript of our conversation. To hear the whole interview watch the video or click on the embedded SoundCloud player below.
Brent Leary: Give me a high-level, overview synopsis of where, and particularly where the enterprise and the tech enterprise… Where are they in terms of blockchain adoption? Is this early days? Have we even begun the game yet? Just tell me where we are with it.
Jeremy Epstein: Okay, well, I’ll put this in terms that I know you can understand. We are well past kickoff, and we are into the first quarter. There’s a few points on the board, no major touchdowns, a couple field goals maybe, but the way I would substantiate that claim is as follows. Two weeks ago, we conducted what we call our Blockchain Marketing Immersion Day for OMD, as I’m sure you know, one of the world’s leading agencies. We had the entire C-suite there, top-level strategy, account planners, probably 75 people in the room for a full day, and we helped them understand, or we just shared our knowledge about, what we see happening in the intersection of blockchain technology with the marketing function.
On top of that, we had seven curated and hand-picked vendors, who are sort of the leaders in the space. And what was really interesting to me is, at the very beginning of the day, our client sponsor there surveyed his colleagues, and he said, “How many of you have either had a conversation with your clients or have had a conversation that your clients initiated about how to potentially use blockchain technology to reduce ads, ad fraud, increase transparency, improve billing reconciliation, improve loyalty, all types of things like that?” I would say that maybe 10% to 15% of the room put their hands up.
Now, you could say that’s not a lot, but I would say that two years ago, the answer would’ve been zero.
Brent Leary: Wow.
Jeremy Epstein: And so, the most important thing, I would say, is we’re seeing validation on the demand side from agencies, from brands. We’re talking with multiple innovation marketing leads at top-50, top-100 brands about how to use these technologies, and we’re trying to advise and help them understand the market because the second part of this story is the explosion of vendor offerings on the supply side.
We have this thing which we borrowed liberally from our mutual friend Scott Brinker (chiefmartec.com) called the Blockchain MarTech Landscape. We started tracking all the vendors in the space. Two and a half years ago, or three years ago, when we did the first one, there were 22. We just released version four this month. There are 415.
Brent Leary: Wow.
Jeremy Epstein: And so, the vendor space is exploding as people start to say, “Wait a second. How do we use this distributed technology? How do we use cryptographic tokens? How do we use all these new capabilities to improve the operational efficiency, the transparency, the trust, most importantly, of the marketing function?”
Brent Leary: Is it mostly driven by marketing blockchain tech, or are there other categories that folks are getting in on?
Jeremy Epstein: Yeah, great question. So, for the most part, we copied the Brinker landscape. We’ve since added a few that are unique only to blockchain. The biggest categories are, not surprisingly, programmatic advertising, things like that, because you don’t have to be an expert in advertising to know just how screwed up that ecosystem is, and it has blockchain written all over it. So, that’s where the heaviest concentration is, but if you look at the landscape, you’ll see that it’s really covering a lot of parts nicely, and it’s been very exciting to literally watch this industry get born and start to mature.
Brent Leary: All right. So, it sounds like… Like you said, we’re… Are we into the first quarter, moving into the second quarter? Is that where we are with this?
Jeremy Epstein: Yeah, I would say we’re in the first quarter because the third part of this triad, if you will, is the pilot and the case studies. So, for example, there’s one company called Lucidity. I should disclose I’m an advisor to Lucidity, so keep that in mind. But they did a A/B test with Toyota where it was for a campaign designed to drive test drives, and the A team had all the traditional infrastructure, everything they were doing normally, what have you. The B team used… They weren’t the B team meaning they’re less good. They were just the second team. They used Lucidity to basically simplify the backend process.
When all was said and done, the reconciliation, the insurance, the assurance that the ads were being delivered where they had been purchased, all that kind of stuff… when it was said and done, they had a 21% improvement in business outcome, not in click-throughs, in business outcome.
Brent Leary: Wow.
Jeremy Epstein: And we’ve seen a bunch of those from people like Amino and other players who are now really starting to get some traction and demonstrate the value of the solution.
So, increased interest on the buy side, increased supply on the vendor side, and most importantly, actual true measurements of value delivered in the pilot and initial implementation phases. Still early. We’re probably one or two drives into the game, but I can see just from the people in the room and the conversations that we’ve had, more and more people are taking this stuff seriously, which… It’s going to be great for a lot of people. So, it’s good to see that.
Brent Leary: Last year, didn’t see that much discussion from the CRM vendors about blockchain. This year, I’m seeing it. Salesforce did a real big rollout in terms of blockchain, CRM, and they had a use case with higher education about being able to leverage centralized data from these participating colleges and universities because, let’s face it, there are people, there are students that take courses and classes at multiple colleges, and it’s kind of hard to see their total transcript because it’s hard to get them from here and there and over here. So, they roll out this use case of being able to have an agreed-upon, common, universal transcript that the colleges, universities have participated and bought into, and then Salesforce, being able to provide a tool that leveraged that centralized data and marries it with what they have on the CRM side.
So, you’re starting to see these use cases of CRM data being leveraged alongside of decentralized, blockchain data, and it’s basically use cases that are industry-driven. All right. That’s the one use case that I’ve seen across the board. But when I talked to, and when you talk with CRM Evolution, that’s not the CRM blockchain scenario that you’re focused on. All right. So, I can set the stage for you.
Jeremy Epstein: That is-
Brent Leary: Let me get out of the way and let you talk about what your vision is for CRM and blockchain.
Jeremy Epstein: Right. I’m either a total visionary or a total idiot who should be put away into an asylum. So, we’ll find out in a few years. Look, the stuff that all those guys are doing, it’s nice. It’s the kind of thing that will make data cleanliness less of an issue because, as a former CMO, I’m very familiar with those issues, and that’s fine. That’s great. It’ll make marketing operations more efficient, but that’s not where the innovation’s coming from. So, as long as you have a centralized database, it’s not really… that’s under the control of anybody, or even a small group of people, it’s not really a blockchain.
I’m a purist in the sense that there’s distributed ledger technology, which will help all these colleges and universities, but a blockchain requires a native cryptographic digital asset to pay for the services that the network provides. Now, in order to do that, by definition, for it to be of value, it has to be outside the control of anyone else. And so, these data stores have to be decentralized.
The future that I see when it comes to CRM, and it could be 20 years away… I have no idea. The future that I see is going to be one where people have their identities stored on a decentralized blockchain. It’s under their control, and then they can give access, permission, which can be revoked at any point, to other entities that might want to pay for it, rent it.
And I think in that world, CRM will not be about who has the most data in their data store. It’s, Who can take advantage of the data that’s available? Who can analyze the behavior of these anonymous wallets and these transactions in order to deliver value without knowing anything about the actual person aside from just that information? Because the fundamental premise of CRM companies is we need as much data as we possibly can get. The fundamental premise of decentralized networks is, “We don’t want any of your data, and we make it impossible to take it.” And those are two entirely different worldviews, and I think… and maybe this is wishful thinking on my part, but I think there’s a slowly growing zeitgeist that people are becoming increasingly unintended leery of trading their data for “free” services, and some people are starting to make the transition… trade-off of privacy instead of convenience.
Now, it’s early, and most people are not willing to do that, but as decentralized networks become faster, better usability, people will start making those choices in large numbers, and then existing companies will be faced with the challenge of having decreasing data about their customers. Now, there’ll always be some, but I think the future of CRM is about understanding how to deliver value without the need for capturing, storing, and oh, by the way, making exceedingly vulnerable to hack, theft, abuse, and misuse the limited data that’s available on public networks.
Brent Leary: To me, it will be kind of hard to see this from a traditional CRM vendor . So, you’re thinking that it’s probably going to be somebody coming from out of nowhere who doesn’t already have the CRM infrastructure built, because It’s kind of hard to let that go. Now we’re going to basically change our whole platform to allow users who are in our databases…” basically allow them to say when they take back control of their information. And that is a big paradigm shift, and I think it’s going to be really hard for vendors to control. What do you think?
Jeremy Epstein: Dude, I mean, you and I are old enough that we’ve seen this movie already. It’s Barnes & Noble. It’s versus Amazon. It’s Blockbuster against Netflix. It’s Craigslist against the classifieds. We have literally seen this movie many, many times. So, you’re right.
Marc Benioff is a bajillion times smarter than I am and certainly a bajillion times richer than I am, but I think it’s going to be just challenging absent what… If I were Marc Benioff, I would probably take some of my venture capital fund and go put it into buying tokens in some of these crypto-CRM networks. That’s what I would do if I were him in order to hedge. He probably won’t do it, and he doesn’t really call me that often, so whatever, but absent that, I think it’s going to be tough for them to change their paradigm.
And you don’t want to get so full of hubris that you just assume the world’s going to continue because 20 years ago, he was the disruptor. And this is how it happens. Man, we’ve seen this… in our own lifetime, we’ve seen this, let alone going back hundreds of years of innovation. So, I think you nailed it, bro.
Brent Leary: What industry do you see blockchain going mainstream in first?
Jeremy Epstein: Well, that’s a great question, but there are multiple answers.
Brent Leary: Okay.
Jeremy Epstein: And it depends on the sector and the geography. So, first of all, financial services is an obvious one, remittances, but it’s not going to happen in the U.S. or any Western country. It’s going to happen in South America, West Africa, Caribbean, places where there’s been a demonstrated lack of confidence in their central bankers, in their governments, and when there’s a huge expatriate community of people who are paying 18% to send money back to the Dominican Republic or whatever.
Brent Leary: Wow.
Jeremy Epstein: So, that’s one use case. If you live in Atlanta, Georgia, you have no idea what it’s like to wire money to Lagos, Nigeria unless you’re Nigerian.
Brent Leary: No.
Jeremy Epstein: Number two, we’re already starting to see the growth of something called decentralized finance, which is basically co-op funding for startups. There’s already a billion dollars… And keep in mind, this is an industry that didn’t exist last year. There’s already a billion dollars locked up in networks where people are loaning their money secured by smart contracts in the blockchain, no bankers, no brokerage, nothing. So bonds… I mean, you can earn 10% interest right now on dollar-equivalent deposits if you do it in crypto, and I’ve been doing that. So, there’s that, number two. Number three… Not enough, but whatever.
Number three is gaming. I think gaming is a big area because what gamers are… they are already very technically savvy. They have a high tolerance for new stuff and buggy stuff, but what’s also interesting is, if you think about Fortnite, two billion dollars on Fortnite, but when you buy all those digital assets, when you quit the game, you lose them. Imagine being able to take them, resell them on the open market, trade them for something in World of Warcraft or Call of Duty. How awesome would that be if you’re a gamer? Well, that’s possible.
And then, another one that I think is kind of a little bit of a dark horse is artificial intelligence because right now, AI is the province of really, really big companies. You need huge data scientists, but imagine having an AI data marketplace that anyone who’s a small businessperson can say, “Oh, I would love to have an AI for this.” You’d go in, make a request. Someone’s built a little thing. You rent it, and they get ongoing residuals because their ownership is secured by the blockchain, and that’s what SingularityNET provides.
And then I’d say the last one, if I’m going crazy, is this idea that I mentioned before of decentralized, autonomous organization. I mean, there’s a building in Prague, for example, that’s managed on the blockchain. The whole governance and bylaws is on the blockchain. It’s people who… they vote. There’s no… all that back office stuff. We’re talking orders of magnitude cheaper. I call it decentralized ERP. It’s orders of magnitude cheaper.
This is part of the One-on-One Interview series with thought leaders. The transcript has been edited for publication. If it’s an audio or video interview, click on the embedded player above, or subscribe via iTunes or via Stitcher.