Application Comparison for Analytics & Visualizations for New Ventures

Blog 4

Blockchain Business Applications

Overview

In 2008 a paper was published by an unknown author, Satoshi Nakamato titled “Bitcoin: A Peer-to-Peer Electronic Cash System” essentially giving rise to the blockchain and blockchain technology (Mougayar, 2016). The paper outlined the concept of a decentralized distributed ledger that could be used for electronically transferring funds in a secure and reliable environment (Mougayar, 2016). The concept has revolutionized currency, creating decentralized secure currencies; termed cryptocurrencies. In January 2009, the first digital cryptocurrency that used blockchain technology, Bitcoin, was issued and was essentially worthless (Google, 2016). In only two years price rose 200% to $13 USD/bitcoin (Google, 2016). Currently, as I write this paper, 1 single Bitcoin is worth $855.23 USD (Google, 2016) with a market cap of $10 Billion USD (CoinMKTCap, 2016). The entire Crypto Currency Marketplace has a market cap of $ 12,859,325,645 (CoinMKTCap, 2016) and there are currently over 600 different types of digital currencies that run on blockchain technologies  (Cointelegraph Media Partners, 2016) that are available through online exchanges. Blockchain technology has demonstrated substantial growth that only originated from a concept that was introduced less than a decade ago. However, the application of blockchain technology is still in its infancy and many more applications will arise as the technology matures/develops and as entrepreneurs acknowledge its true potential outside of the cryptocurrency stream. In order to determine potential avenues for the implementation of blockchain technology an understanding of the underlying technology is essential.

Introduction to Blockchain Technology

Blockchain technology is based on three fields; game theory, cryptography science, software engineering, (Mougayar, 2016). Game theory ensures the ability for a decentralized distributed ledger, cryptography allows for both traceability but also for privacy, and software engineering is the infrastructure that supports the cryptography and game theory aspects (Mougayar, 2016). In order to understand how blockchain works,  one must understand how bitcoin, the first product to exploit this technology, operates. Bitcoins exploits cryptography within the blockchain (Mergenovna, 2016) by utilizing complicated encrypted algorithms, termed hash, to identify every single transaction and user (Extance, 2015; Franco, 2015). This creates a decentralized distributed ledger containing all the transactions and balances of its users throughout its entire history of existence (Franco, 2015). The ledger is termed the Blockchain. Each block contains the hash from the previous block, the hash for the new transactions, and another “magic number” which creates the new hash (Extance, 2015). These blocks are added together to form the block chain. The block chain allows for the complete tracking of any bitcoin but also makes it impossible to double spend (Franco, 2015). Users of Bitcoin have virtual accounts termed wallets that allow them to transact but remain anonymous (Franco, 2015). The use of Blockchain technology offers obvious benefits but also has evident drawbacks. In order to understand it’s applications for business ventures the benefits and potential issues should be investigated.

The Benefits and Issues with Blockchain

Benefits

The benefit of blockchain technology is that it acts as a decentralized distributed ledger. As a point of clarification the ledger could be modified to have central oversight and still utilize blockchain technology. However, for the scope of this paper it will be assumed that the blockchain technology that most companies will use will be of a decentralized or at least distributed in nature. The benefit of having a decentralized distributed ledger that is automated is the ability to remove the middle man.  In comparison, most ledgers that exist at financial institutions, government institutions, central banks and other party service providers involved in currency transfers have centralized ledgers. These ledgers require maintenance, monitoring and oversight to ensure security, avoiding double spending and acting as a broker between the sender and the recipient. All of these aspects require personnel and infrastructure, in terms of both digital and physical assets.  Personnel and assets can be costly and are usually continuous. The costs of the centralized ledger are offloaded onto either the sender or the recipient in response to the service. Alternatively, the blockchain contains a record of every transaction allowing the ledger to be essentially costs free, with no costs associated with maintenance/monitoring of the ledger (However, minor costs are associated with the electricity it costs to run a blockchain network).  Furthermore, since every transaction can be traced, even if funds were stolen they could technically be traced and potentially recovered.  The traceability and the allocation of assets without intermediaries is the real strength of blockchain technology. However, it is still in it’s infancy and more benefits may be realized however blockchain is not without its issues.

Issues

Blockchain has significant issues regarding its technology, security and regulatory.  Although Blockchain technology has been in development for many years with numerous vendors it still requires extensive technical expertise to set up. Furthermore, many companies still have not addressed the difficulty with interacting with blockchain technology. For larger corporations it is cumbersome to take legacy infrastructure and adapt it to blockchain technology (Graham, 2016). Blockchain itself is designed to be robust in its security due to the cryptography and traceability, but it still has demonstrated security issues.  Recently, the DAO which operates as a chain off of the Etherum blockchain recently witnessed a $60 million dollar hack.  Interestingly, the hack itself was not on the blockchain but on the contract but still reveals potential security issues blockchain technology may face in the future. Furthermore, if a single user owns/utilizes more than 51% of the blockchain it’s possible for this user to rewrite the blockchain. This scenario is unlikely as most networks are too large to own 51% but this could still be a potential security threat in the future. Regulators are also scrambling to adapt and develop policy for the blockchain with even some jurisdictions restricting our outlawing cryptocurrencies (Andrianova, 2016). The reason for increased regulatory scrutiny is the potential anonymity of the product.  Users (wallets) often have identification that is difficult to decipher (i.e. 19HGYRCyHFHbsM…) and can be associated with an IP address that is masked making it difficult to ascertain the wallet holder. In addition there is not oversight to determine true identification of the wallet holders (Mergenovna, 2016). This is unlike other financial institutions where valid identification must be proved to set up accounts due to regulations. Due to the anonymity blockchain, specifically Bitcoin, has been associated with criminal activity including money laundering, the black market and many other criminal activities. Although technology, security, and regulatory hurdles are still apparent, there are more and more users and companies utilizing blockchain every day and are therefore signalling that the benefits outweigh the potential issues with this technology. Furthermore, this signals that blockchain technology can have viable business applications.

Potential Applications for Blockchain Technologies

 

The main benefit of the blockchain is the reduction or the elimination of needing intermediaries in any process of transacting an asset. Currently, intermediaries provide services such as oversight, facilitation, and insurance. These intermediaries charge a price for their service and it can be significant. Western Union can charge anywhere between 5-10% on transferring funds internationally and have capitalized on this, generating $5.5 billion in revenue annually. Blockchain allows for these transfers with little to no costs.  Blockchain is not necessarily restricted to currencies/funds but can be applied to any type of asset. The most interesting application of this technology is for the media (film, television, music, art) industry. Currently, the industry is rampant with pirating; furthermore, intermediaries take large percentages of revenue from the artists. By allowing artists to use blockchain technology they could securely sell their content without the risk of piracy and losing funds to an intermediary.

Conclusion

In conclusion blockchain technology, although new has transformed the internet and value transfer processes. It allows for assets to be sent securely, cheaply and is traceable. Although issues are apparent with technology, security and regulations these issues will be resolved as the education and the awareness of the technology becomes more mainstream and apparent. Blockchain is mainly used for the financial industry with the transfer of funds however there is still many other applications to utilize this product for transferring assets. Interestingly, media could greatly utilize this source to help content creators get a greater proportion of the revenues. Overall blockchain technology is revolutionary and will alter the marketplace significantly in the near future.

 

 

 

 

Bibliography

Andrianova, A. (2016, April 27). Bitcoin Users Would Face Jail Under Russian Cryptocurrencies Law. Retrieved June 14, 2016, from Bloomberg: http://www.bloomberg.com/news/articles/2016-04-28/russian-law-would-send-bitcoin-users-to-jail-as-cybercriminals

Cachanosky, N. (2014). The Mises-Hayek business cycle theory, fiat currencies and open economies. The Review of Austrian Economics.

Cointelegraph Media Partners. (2016, June 15). BTC Map. Retrieved June 15, 2016, from Map of Coins: http://mapofcoins.com/bitcoin

ECB. (2012). Virtual Currency Schemes. Frankfurt, Germany: Eurosystem.

Extance, A. (2015). The future of cryptocurrencies: Bitcoin and beyond. Nature.

Franco, P. (2015). Understanding Bitcoin – Cryptography, Engineering and Economics. West Sussex: Jon Wiley & Sons Ltd.

Google. (2016, June 15). Google Finance. Retrieved June 15, 2016, from Google: https://www.google.ca/finance?q=CURRENCY:BTC

Mainelli, M. (2010). The eternal coin – made from real money: risks in fiat currencies. The Journal of Risk Finance.

Mergenovna, D. (2016). INVESTIGATION OF MONEY LAUNDERING METHODS THROUGH CRYPTOCURRENCY. Journal of Theoretical and Applied Information Technology.

Richter, C. (2015). Virtual Currencies Like Bitcoin as a Paradigm Shift in the Field of Transactions. The International Business & Economics Research Journal.

Sauer, B. (2016). Virtual Currencies, the Money Market, and Monetary Policy. International Advances in Economic Research.

The Economist. (2015, May 9). The next big thing; Blockchain. Retrieved June 15, 2016, from The Economist: http://search.proquest.com.ezproxy.lib.ryerson.ca/docview/1774865652?pq-origsite=summon

Wagner, A. (2014, August 22). Digital vs. Virtual Currencies. Retrieved June 14, 2016, from Bitcoin Magazine: https://bitcoinmagazine.com/articles/digital-vs-virtual-currencies-1408735507

 

An Approach for an Effective Social Network Strategy for Start-Up Agrilyst

Joe Mersereau

June 19, 2016

Background

The human population continues to steadily grow and so has the demand for food. World food demand is expected to grow 70% from 2005 – 2015  (UN, 2009). In addition to growth in the human population, there has also a trend towards urbanization. It is predicted 70% of the world population by 2050 will be living in urban areas (UN, 2009). Food security will be strained in these growing densely populated urban centers as their reliance on food from external sources grows (Corbould, 2013). However, this strain has allowed entrepreneurs to develop and create new approaches/solutions into producing food for urban settings. One of these approaches is urban agriculture. Urban agriculture, specifically urban greenhouses, proposes to create food within the city by utilizing rooftops and underutilized space for growing. The idea is that, these urban farms could create produce within the city, and reduce transportation costs and increase freshness while also of greening urban centers (Geographic, 2016). However, the industry is still relatively new but growing. The world’s largest rooftop farm only opened up in 2010 and was surpassed in size by another only two years later (Wikipedia, 2016). It is apparent that the urban agriculture industry will continue to grow due to both food security and environmental reasons. However, the growth this industry or any industry will also lead to a growth and creation of complimentary and supporting businesses. These businesses are needed to help urban agricultural facilities increase production and efficiency. Agrilyst is one of these companies that aims to improve urban agriculture and specifically for indoor operations.

Company Overview

 

Agrilyst is a tech start-up that provides data analytics for urban/indoor farming and greenhouse operations. The start-up is relatively new only launching their beta platform July 2015  (CNBC, 2015). The initial idea was founded by Alison Kopf the CEO of Agrilyst, who has previous experience with indoor farms/greenhouses, (SuperCollider, 2015). Through an interview with Medium, Kopf has stated there is a significant need for analytics in large scale indoor farming operations (SuperCollider, 2015). Agrilyst platform is designed specifically to provide analytics for indoor farming operations. The software provides data integration, farm management, real time analytics, and provides recommendations to increase efficiency (Agrilyst, 2016).

The indoor urban farming market is relatively niche. Indoor Agriculture is currently ~$500 Million dollar industry in the US (KERSLAKE, 2015) with predictions of growth to ~ $9 Billion.  Agrilyst aims to provide the farm management provided for every new and established indoor farm (SuperCollider, 2015). Currently, the industry itself is small and for Agrilyst to survive the indoor farming industry will have to continue to grow. Therefore, Agrilyst, as a start-up, will not only have to secure business but also attract investors and investigate other avenues where their product could be utilized. Agrilyst strategy should therefore focus on awareness of their products to potential customers, attracting investors to establish financial stability, identifying potential alternative avenues for their product while also promoting the industry to ensure continued growth.

Social Networking Strategy

Using social networks can be a cost effective approach to marketing, brand awareness and increasing exposure. Most social networking tools are often free or have relatively low costs and have exposure to large and diverse audiences, ideal for start-ups. However, start-up cannot just use any social networking platform but should be selective ensuring they spend their time effectively. The social networking strategy that Agrilyst should employ should be focused to ensure engage and reach their target audience. The social network approach can be divided into three strategies. The first is targeting customers, the second is attracting funders, and the third is promoting and providing awareness to the urban agricultural industry. Each strategy should utilize different strategies due to their different objectives.

 

Attracting Customers

The size of the indoor farming industry will be a real limitation for the sustainability of Agrilyst. Agrilyst will have to capture a large portion of the market in order to survive. Social media can be a great avenue in identifying and engaging their customers while also demonstrating their product. LinkedIn would be the ideal social network for these objectives. LinkedIn is the social network for professionals (Lee, 2015) and therefore would be the ideal location to identify and attract customers. The overall strategy would to be to create a LinkedIn profile and connect with as many indoor agricultural companies as possible. This has two benefits it allows Agrilyst to have a better understanding of current indoor operations and also gets them closer to contacting the companies. Agrilyst has stated that part of their strategy is to customize software and the farm management to their unique customer needs (SuperCollider, 2015). By accessing consumer information via LinkedIn they can develop a customized demonstration to potential customers, which could help in increasing sales and landing contracts. However, it is also essential that Agrilyst has a strong LinkedIn page with videos that demonstrate their platform. 52% of consumers stated that their confidence increased in a company and their product when company sites include videos (Borgini, 2014). This will validate their product while also allowing customers to come to them. Success for this social network can be determined with the following KPI’s: percentage of traffic (i.e. views), number of conversations (i.e. leads) generated through LinkedIn, and # of conversions (i.e. sales) generated through LinkedIn.

 

Securing Funding

The market growth of indoor farming provides both benefits and barriers. The increased growth allows for Agrilyst the potential for increased sales. However, with growth comes increased competition and increased customer expectations.  At various times throughout business lifespan of Agrilyst they will need to adapt to the growth of the market.  As a start-up, Agrilyst will have limited revenues/cash and therefore will rely heavily on funding from investors to survive. Therefore, Agrilyst will need to attract investors both to survive and obtain the capital to grow with the market. LinkedIn is the ideal platform to attract investors. In a recent survey out of 1300 millionaires it was found that 41% used LinkedIn regularly (Lee, 2015)). Furthermore, Angel Investors and Venture Capitalists also utilize LinkedIn to identify start-ups (Gravagna, 2016). In combination, twitter can also be used to boost Agrilyst profile and attract investors. It should outline innovation and the securing of funding to attract investors (Chang, 2015). This will create a buzz for the company and increase visibility to investors. The KPI’s should be the following; percentage of traffic (i.e. views), number of conversations (i.e. leads) generated through LinkedIn, and # of conversions (i.e. sales) generated through LinkedIn, Retweets, Followers – Twitter/LinkedIn.

Raising Awareness

Agrilyst is a complimentary/supporting service for the indoor agriculture industry. It therefore, relies on the growth on the industry to maintain its operations. Furthermore, it has stated that part of their strategy is to target new operations (SuperCollider, 2015). It is therefore, Agrilyst responsibility to support and develop this industry. They should post links and start conversations on social networking sites that have a large and diverse audience. The material that they post does not need to be directly associated with Agrilyst but should be related to promoting the indoor farming movement.  Facebook and Reddit should be used to raise awareness.  71% of online adults use Facebook (Pew Research Center, 2013), while Reddit has a unique large scale community space with over 36 million users (Lee, 2015). Both of these avenues will allow access to large communities and the corresponding exposure to urban agriculture to raise awareness and to attract customers and investors into the industry. KPI’s would be difficult to measure in this space but could rely on Followers and amount of activity on Reddit.

Examples from the Competition

The indoor farming industry is a niche sector and the data analytics for indoor farming is even a smaller industry. In the research conducted for data analytics for indoor farming there were very few competitors. Currently, there are some large players such as IBM, John Deere, and smaller players such as Farmers edge, Farmlogs, Onfarm systems, Kisanhub, Peytec. The majority of focus for all these companies is agriculture and not specifically indoor agriculture but they offer a comparable product. The large players have well established social presence, while the larger of the small players have LinkedIn profiles with a variety content including videos. However, the smallest players have limited to no content. Since, Agrilyst is competing with these smaller players it is essential for them to start posting content to help differentiate them from their competition.

Sample Content – For LinkedIn

Conclusion

The indoor farming industry is going to continue to grow as global and urban food demand increases. Agrilyst is strategically posed to support this industry with their data analytics platform. As a start-up it is essential for Agrilyst to identify/attract customers, secure investors and raise awareness of the indoor farming industry. Social networking platforms can be utilized to obtain these objectives. Primarily, the use of LinkedIn will help attract customers and secure investors, while Facebook, Reddit, Twitter will allow for increased industry and brand awareness.

 

Bibliography

Agrilyst. (2016). Agrilyst. Retrieved June 4, 2016, from Agrilyst: http://www.agrilyst.com/

Borgini, J. (2014, April 1). 10 Ways to Improve Your LinkedIn Company Page. Retrieved June 9, 2016, from Social Media Examiner: http://www.socialmediaexaminer.com/make-linkedin-company-page-useful/

Chang, L. (2015, June 30). Twitter is the newest investor platform for startups looking to share relevant info and attract VC funding. Retrieved June 17, 2016, from Inc.: http://www.digitaltrends.com/social-media/twitter-investor-platform-startups/

CNBC. (2015, September 15). Technology. Retrieved June 5, 2016, from CNBC: http://www.cnbc.com/2015/09/24/what-won-the-day-at-tech-crunch-disrupt-agriculture.html

Corbould, C. (2013, Novemeber 1). Feeding the Cities: Is Urban Agriculture the Future of Food Security? Retrieved June 17, 2016, from Future Directions: http://www.futuredirections.org.au/publication/feeding-the-cities-is-urban-agriculture-the-future-of-food-security/

Geographic, N. (2016). Urban Farming is Growing a Green Future. Retrieved June 5, 2016, from National Geographic: http://environment.nationalgeographic.com/environment/photos/urban-farming/#/earth-day-urban-farming-chicago_51626_600x450.jpg

Gravagna, N. (2016, June 17). Use Social Media to Attract Venture Capital. Retrieved June 17, 2016, from For Dummies: http://www.dummies.com/how-to/content/use-social-media-to-attract-venture-capital.html

KERSLAKE, N. (2015, March 23). Six Mega-Trends in Indoor Agriculture. Retrieved June 5, 2016, from Agfunder: https://agfundernews.com/six-mega-trends-indoor-agriculture.html

Lee, J. (2015, December 15). 12 Social Media Facts and Statistics You Should Know in 2016. Retrieved June 8, 2016, from MakeUseOf: http://www.makeuseof.com/tag/12-social-media-facts-statistics-know-2016/

Pew Research Center. (2013, December 27). Social Networking Fact Sheet. Retrieved June 17, 2016, from Pew Research Center: http://www.pewinternet.org/fact-sheets/social-networking-fact-sheet/

SuperCollider. (2015, December 1). Agrilyst: The Operating System for Indoor Ag. Retrieved June 9, 2016, from Medium: https://medium.com/@SuperColliderHQ/agrilyst-the-operating-system-for-indoor-ag-d376b5007f8c#.6w1i8az5u

1. (2009). FAO. Retrieved June 8, 2016, from http://www.fao.org/fileadmin/templates/wsfs/docs/Issues_papers/HLEF2050_Global_Agriculture.pdf

Wikipedia. (2016). Urban Agriculture. Retrieved June 4, 2016, from Wikipedia: https://en.wikipedia.org/wiki/Urban_agriculture