Over the last 12 years, Aman has worked with a variety of startups and has been on both sides of the entrepreneur-investor table. With a background in strategy, operations, and deal-making, Aman focusses on blockchain applications and the supporting ecosystem including expertise in the business and regulatory implications of tokenizing assets. He is a strategic advisor to executives and boards on creating new business models for fintech, media and entertainment, and identity management to name a few recent engagements. Currently, Aman is a mentor at the Singularity University and a board member at KeraCel, a solid-state battery company. Previously, Aman co-founded Applied Protein which was acquired by Pivot Pharma. He holds a B.Tech in Electrical Engineering from the Indian Institute of Technology, BHU and an MBA from the Tepper School of Business at Carnegie Mellon where he was named a Swartz Fellow for entrepreneurship. In his spare time, Aman enjoys teaching photography to his kids.
This episode we talk about:
- Why does it seem like it is taking so long for blockchain adoption to take place?
- What is the difference between enterprise blockchain and the blockchain the is used for Crypto like Bitcoin?
- What’s happening with the SEC and Initial Equity Offerings?
- Past and Present regulations and decisions the SEC has made?
I would like to thank Brett Bunnell a corporate attorney focused on Technology and Blockchain who made this introduction allowing today’s interview to happen.
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Pre-intro 00:00
You’re listening to the Silicon Valley podcast.
On today’s episode, we sit down with Aman Johar, who over the last twelve years has worked with a variety of startups and has been on both sides of the entrepreneur investor table with a background in strategy, operations, and deal-making. Aman focuses on blockchain application and the support ecosystem, including expertise in the business and regulatory implications of tokenizing asset. He’s a strategic advisor to executives and boards on creating blockchain New Business Models for FinTech Media and Entertainment and Identity Management, to name a few of his recent engagement.
On today’s show, we talk about why does it seem like it’s taken so long for blockchain adoption to take place? What is the difference between enterprise blockchain and the blocking that is used for cryptocurrency like Bitcoin? What’s happening with the S.E.C. and initial equity offerings and past and present regulations and decisions the S.E.C. has made? The unbanked, the future of currency and much, much more on today’s episode. And at the very end, we mentioned a gift that Aman is willing to give our listeners. So, let’s begin the show. Enjoy.
Intro 01:11
Welcome to the Silicon Valley podcast with your host Shawn Flynn, who interviews famous entrepreneurs, venture capitalists and leaders in tech. Learn their secrets and see Tomorrow’s World Today.
Shawn Flynn 01:28
Aman, thank you for taking the time today to be on Silicon Valley.
Aman Johar
Well, thank you, Shawn. It’s a pleasure to be here.
Shawn Flynn 01:33
Aman, you’ve had an amazing background. Could you just tell us a little bit about your history up to this point?
Aman Johar
I grew up in India and I was a like all good Indian kids, went to the I.I.T., trained as an electrical engineer and came over to the US to work in semiconductors and did my masters at the University of Illinois. When I graduated, it was probably the worst time to graduate from a semiconductor background because everything was being shifted over to China. So that’s when I started my first company was in the software space. We were doing EDI interfaces for media management companies and that led me to business school at Carnegie Mellon, came out and started to dip my feet in private equity and mostly working on turning around companies that had either stalled or they were a little bit to further ahead of their times or there were management issues and so on and so forth. So, while I was doing that, I started to get more and more fascinated about blockchain technology around 2016 or so, the last three, four years.
I co-founded Proteum Capital and been working in this space looking to build an ecosystem where this New Age technology can be rolled out into the markets. And I guess when you live in the Silicon Valley, you kind of have to reinvent yourself every few years. I never planned it this way, but my career, it’s been very horizontal across a wide mix of in that space, from healthcare to fintech. Little bit about film financing in Hollywood as well. So, it’s been all over the place.
Shawn Flynn 03:08
Now, I am definitely curious about that Highwood financing. But let’s go back. So, you’re in private equity. What type of companies were you working with? Types of problems that they have. And how did you go about helping them?
Aman Johar
It’s been about 12 years that I’ve been in this space. So, we’ve done maybe about 30 different kinds of deals. And the problems have been a mixed bag. Right. Like I said, and some were related to teams, some related to execution. Some were just companies that were just a little bit earlier than their time. Some were bad business models. Some were just wrong markets or mis steps taken in terms of going to market. So, let me give you an example. I mean, I’m on the board of a company and we are really making antennas right here in the heart of Silicon Valley where no hardware company exists really. You’re right. And this is a 40-year-old company. Interestingly, at its peak, these guys were regarded as the Rolex standard for antennas. And then one fine day, the founder just passed away. It was an older guy and he didn’t leave behind a succession plan. So, like, what happens when founders leave, right? There is a big void in terms of the capabilities or in terms of vision, in terms of how the strategy needs to go. Then this company was on autopilot mode for almost four, five years. Right. All of their customers just came back to them with no external marketing, no external sales teams. They were just calling them and saying, hey, just ship over these parts and we need them. And that’s how the company survived for a few years. Then when I started to get involved, we started to look at, well, what can be done with the legacy products that we have? And then looking forward to what’s happening in the Antenna space, sure enough. 5G is starting to make some noise. And what does that mean? It means we are going from maybe one base station every two miles to maybe hundreds of base stations every square mile. And that communication requires antennas. So now we are starting to not only have passive products, but also diversifying the product mix into active products, indoors and outdoors, distributed antenna systems, things like that. So I guess the point I’m trying to make is that there’s a ton of problems when you acquire some distressed assets, but then you kind of have to understand what the next horizon is and how you steer towards that. And that’s how you get over those problems.
Shawn Flynn 05:40
What about when you’re working with a company that had an amazing product, amazing technology. And it was just too far ahead of the market just to advance for its time?
Aman Johar
Well, the good thing about that is that you get to see the market evolve and you get to understand what the catalysts will be for something like that get adopted. But while you’re going through that process, it’s very, very painful because it’s like a death by a thousand cuts. Every time you go out and you’re preaching to new people and your kind of thinking about how to position this company so that people really try to get their heads around the technology or get to understand the business model that’s being changed. Or just in terms of adoption, are people really ready for it? As a consumer of the product. Right. So, I’ll give you another example. Maybe about four or five years ago, we invested in this company is in the home automation space. Now, everybody at that point was doing some sort of a point solution, whether they had like a camera, tiny little camera that like a ring outside there, doors. They were doing security systems or alarms and things like that, or just even light bulbs, remember the Philips Hue light bulbs, they just change in color. And this company can really come out with a light switch on the wall, a touchscreen light switch that you could just install very easily inside your home. It was a DIY installation completely. And then you could control almost everything in your home through that. And they had the mesh network integrated into it. It was a product, again, too far ahead of its time because the market condition was just not right. People did not really wake up to the idea that, oh, I, there will be enough devices that need to be controlled or that need to be managed. Right. And sure enough, we talked to a lot of home builders. They were just not ready for it because their supply chain cycles and their lead times into installing these kinds of things were just a little bit to further down the road and to do it as a DIY. There was a big education component for users that needed to get in there. Those were some of the barriers. Looking back and then in hindsight, I mean, there could have been some security issues or Providence issues about how you pair these devices together. But maybe the technology wasn’t fully baked in at that time. But now it is ready. And now you see so much more happening in the connected home automation space. But still, I mean, if I compare it to five years ago that the company was far ahead of its time, we even took it to Google and launched it at Google IO as an integration partner. And it was fully integrated with Alexa, Google Home, and all of that a couple of years in a row that CES. They won the best device award in the home automation category. It was a little early for the adoption cycle.
Shawn Flynn 08:38
Aman, going back to what you’d mentioned or alluded to at the very beginning, you had a little bit of time in Hollywood Investments or with Hollywood. I got to ask you to go into more detail on that.
Aman Johar
Yeah, that’s actually funny. So, one fine day, I just got an email, a one-line email from a Hollywood producer and it just said, call me back here. It’s my number. I just gave it a call and I just give it a try before I knew it, I was kind of involved in this whole new age of film financing based on a blockchain. So that’s how it all started. But then over the period of another year and a half that we started to work together, and we started to hash out the details of what exactly are we, first of all, trying to build. It became very clear that, you know, in Hollywood, there’s two problems for investors, even if the film is a blockbuster, makes a billion dollars at the box office. A lot of investors do not ever recoup their money. So, there is a liquidity problem or investor, and that happens only if you’re lucky enough to be able to access a deal on which you can actually, first of all, go out and invest your money. So, it’s a very, very Hollywood specific problem where access to deals is almost impossible to get. And once you’re in, there is no liquidity for you. So, it’s a trap. So that’s what we are trying to solve. From an investor’s standpoint on how do you really do this? So, I think we ended up creating the first equity Token model or the studio. Guys went out and raised about one hundred million to go out and make movies, and I’m sure we’ll hear more about them in the coming years.
Shawn Flynn 10:42
That’s amazing, though, that there is an actual problem to recoup your money. And it’s hard to get these deals. I can’t see why anyone would even consider invested in making movies
Aman Johar
Well, people like to be associated with the glitz and glamour of Hollywood. So, having your name pop up on film like The Social Network that’s huge
Shawn Flynn 10:44
You’re right. OK. So, raising money. The token offering. I got to go back to the corporate governments of company’s structure for companies, say, back in 2017, who did or plan to do all these initial coin offerings. ISO’s. Can you talk about kind of what happened to those companies? Because they were also in the news quite a bit.
Aman Johar
So, that is actually a very fascinating topic, because if you go back and look at all the companies that when the ICO were out and you plot them out on a whatever data analysis tools you want to look at, one thing that pops out immediately is that there were a lot of companies that were just very only interested in venue shopping. So, they were incorporating their companies all over the world. It came in small to all the tax havens and there was a few in Singapore, Switzerland, all of that. But another fascinating thing that pops up is almost a third of all of those offerings were actually stateless. Well, and what that means is these companies only existed digitally and virtually they were not responsible to any jurisdiction. So, you couldn’t apply jurisdictional laws to these companies. And surely Telegram started that way as well. But I think there’s been an evolution since then. 2017 was all about the fear of missing out. And my partner Rakesh and I we were always constantly looking at these tokens and we were like, well, these things are going up and up. That’s got to be something backing these things up. Sure enough, from a securities law’s perspective, it just did not make sense. So, every company that we talked to in 2017, we would just advise, hey, guys, and just do it properly because you’ve got to comply with regulations. And sure enough, nobody wanted to talk to us. We spent the entire 2017 on the outside twiddling their thumbs. And by 2018, things had changed, and they wanted to come back and talk to us about how to be compliant with jurisdictional laws and how to bring back go in and send to decentralized world. I think most of those companies could not make it back because there were structural flaws in how they had structured themselves, how they had put in their own corporate governance models in place. What they were selling and love Those sales were just paper where there was no business model behind it. There was no real technology behind it. There was no real reason to invest in those tokens at all. So, the only thing people were selling you well is going to change the world. And lo and behold, 2018 is the year when John Lennon’s Imagine will finally be adopted as the world anthem. Right. And that’s the utopian dream. But nobody thought about how are you going to scale these systems? The only answer you got was, well, there’s plasma coming out and there’s shouting coming out. And technologically, we are all really there. And, you know, three years down the line, there’s nothing like that in the market today. So there was a deep flaw, not only structurally how the governance was in, but how those models were chosen based on where the technology was and people were just not paying any attention to the limitations that they were going to face coming into the market.
Shawn Flynn 14:05
What about the technology itself? The underlying technology blockchain? There was so much promise for it and still is how come It’s not being adopted as rapidly as a lot of people expected a couple years ago. Or maybe it is. And I just I’m not seeing it.
Aman Johar
So blockchain tech companies, for them to be successful, they have to triaged between three things. One is obviously, like you said, technology. The second is the ever-changing business models that are being now enabled, just being enabled by using the technology. And third is regulations are uncertain. And all of these three things feed into each other. You can’t have a technology without knowing what kind of regulatory environment you are going to be operating in. So, for example, the SEC takes a very hard line stance on issuing tokens. Everything has to be a security. So, if you’re creating a company in the US, you’ve got to have your tech and your business model choices based on the fact that this is going to be a security token. And then if it’s going to be a security, there are things that you can and get there, things you cannot do from a business model perspective. Triaging between these three areas that I think most entrepreneurs have a hard time right now, figuring it out because entrepreneurs are coming in from very specific domain knowledge of what they’ve been looking at or the problem they are trying to solve. And they have no idea about what is required for the entire ecosystem to be able to adopt it. And the foundational infrastructure is just not present either. So those are things that are preventing some of these New Age business models to come out. That’s only on the for example, the public blockchain side of things, things that are being built on yttrium and so on, so forth. So, I straight off a little bit on the engine. But outside of the regulatory environment as well, there is just a lack of ecosystem. So, if you think about the public blockchain side of it. Compare it to the most prominent applications today, which are in the fintech environment. One thing to realize is that the financial world you and I know today that has been cobbled up together for over a period of 100 years and there have been regulations that have been imparted in there to protect consumer safety, to protect your money from being used nefariously. There are regulations that are required for money laundering purposes are, you know, just making sure that your money is legitimate. And that has built a lot of trust in the existing system. Nothing like this exists on the blockchain or the crypto side of it. The idea that you can use your Bitcoin. Yes, you can use Bitcoins for payments, but it’s probably not going to be as fast as you are using your Visa and MasterCard, because Bitcoin is probably not designed for it. But then you take it, too. OK, I can make can I use other currencies? Yes, you can surely use them. But how do you even make sure that those currencies are a store of value, which is necessary, Because if you’re using it as a mode of payment and if your currencies are fluctuating and they’re volatile in value, are you incentivized to use it? Then, I think from an adoption perspective, if you look at come back to the enterprises and the corporate environments that we live in today, I think one of the bigger barrier to adoption of blockchain technology there is just the depth of talent is shallow and not necessarily because they don’t have the resources. It’s that most enterprises haven’t spent enough time, talent, energy, building those capabilities up. I mean, they have fantastic engineers, but they are just not utilized in. Me is another barrier to adoption. I was actually talking to a Fortune 100 CIO a few months ago. And the when I say that enterprises haven’t really spent enough time, this is exactly what I mean. I mean, I was talking to this Fortune hundred CIO. He was very confused about public and private blockchains. And then in his mind, he was thinking about if well, if it’s all open source software that you’re using, then how does the private permission networks come into picture? So, if enterprises and these are large enterprises and if they are not clear about the technology’s tag that they need to be building on, then it’s a tough road for adoption. And I was also talking to another. This is a little funny, right? Is this being a pretty well-known bank in Europe. And I was talking to their chief innovation officer. He just had a hard time understanding non fungible tokens in his mind. He was always equating it with, well, money is always been a fungible thing. So how can non fungible digital tokens have any value when you can’t even exchange them for anything? Right. So, the whole idea of going from a very set corporate structure in which people have been used to working in and adopting a completely tangential financial infrastructure is alien to most people.
Shawn Flynn 19:30
You mentioned blockchain for payments. You know, maybe Bitcoin, it’s not structured versus your Visa card or that. Can you talk a little bit about the difference between the enterprise blockchain and maybe the blockchain used for crypto like Bitcoin?
Aman Johar
Yes. So, if you think about the Bitcoin blockchain, which is the original idea anyways, at its core, it’s a distributed ledger that records transactions between all the participants on the network. And the way it works is that for recording all of these transactions, the participants are paid in the digital currency. That’s what Bitcoin is. So, it’s kind of aligns the incentives of people to be on that blockchain. And the beauty of Bitcoin is that it’s a completely transparent network. Right. And it’s an open system. Anybody can join it. All you need to do is download a code and run it on your computer and you’ll be fine. And you can run a node by yourself. You can partake in that economic activity that is being generated off the Bitcoin blockchain. Nobody can stop you. It’s sensor proof. It’s immutable record of transactions and all the good things that go with it. So very transparent, open system. On the other hand, enterprises do not like that kind of a system because now you think about, say, for example, you’re a Walmart. And you are sourcing the same product from two different suppliers and your supply chain. You’re sorting different quantities from them at different prices, but you don’t want them to know about it. So, if you have a public open recording system, those things can be figured out analytically. So, enterprises need a system which is private, which is permission. You only get very little visibility into the entire network and only for the stuff that you’re responsible for. So, that’s the system that enterprises like. And that is where most enterprises have gone down directionally and align themselves with the system called hyper ledger that championed by IBM. Conceptually, it is similar to the recording transactions in a distributed manner. But you only get limited perspective and you have a permission environment where you can do nothing more than what you are explicitly permissioned for. And that’s in contrast with Bitcoin, which is completely open and transparent, and anybody can join.
Shawn Flynn 22:03
So, Aman, we’ve had a couple of past guests Osama Batur, Marwan, their episodes. Episode, I think twelve and eight when they talked about the un-bank and Blockchain kind of being a solution for this problem. So right now, there’s two billion people without bank accounts in the world and this problem that they’re trying to solve as they’re solving this. Are they missing anything? What’s the whole landscape of this problem?
Aman Johar
So, providing financial services to the unbanked population of the world is a noble goal for sure. The problems of the un-bank people are enormous, and the lack of capital and access to credit keeps people from participating in the economic activity and from realizing their true potential as well. But the problem is that there is a lot of rent seeking that goes on in this area. Right. And that’s a problem that can be solved by blockchain. But even if you use blockchain, it’s just a tool, you still have to bring in the elements of incentives that will bring people into the network. That is a harder problem to solve. So, the problem is that the market conditions are tough and there are very few people who are actually doing it. The market and the ground realities are very different. There is no Internet connectivity. There’s lack of access to just the infrastructure that makes it possible. So, yes, you can provide a digital experience, the unbanked people. But if they don’t have access to smartphones in the first place, how do you do it? Are these smartphones are actually dumbed down so much that there is no security layer on it? How do you do it? That’s the issue there. But on the flip side, I think when you look at it from take a step back and you look at the entire world. Yes, there are two billion unbanked people, but then there are five billion bank people as well. And they have the same problems too, access to capital is a problem. And there is a lot of rent seeking behavior that goes on with big banks. Now, imagine sending 100 dollars over to Philippines. And on the receiving side, you only get 70 dollars. That’s a 30 percent rent that you pay every time. Can that problem be solved? I think those are opportunities where the world is headed towards in terms of solving. When you think about it, Ripple is starting to make some dents in that space. And then there is a whole movement behind decentralized finance. So, if you look at it today, there’s probably over a billion dollars, one billion dollars logged in smart contracts and that are pledged as collateral for loans and complex derivative instruments and things like that. So, I think that that is going to have a huge impact in bringing financial services, efficient financial services without rent seeking behavior, even to the bank populations of the world. And if some of that trickles down or to the unbanked population, I think that’s where you would really start to turn the wheel of fortune for those at the bottom of the pyramid. So as to say
Shawn Flynn 25:15
so, Aman, let’s pivot away from the unbanked. And I’m curious about the S.E.C. I’ve just done a little research on initial exchange offer. Can you talk about kind of what the S.E.C. is? kind of your opinion and, you know, this, your opinion of this and that whole arena right now?
Aman Johar
So, if you look at it from the US regulatory perspective, it is the same scam as an ICO was from I think the SEC has made it pretty clear that, NIU is no different than an ICO. And it certainly should not be. I think what happened here is that there was just a little bit of a word consolidation. Previously, the issuers, they were minting their own tokens and they were paying a lot of money to these exchanges to list them. Now, in the issuance dried up, these exchanges were looking to still expand on their business models. And what they started to do was have this notion that, well, we’ll mint the tokens for all the issuers and then we’ll just listed on our exchange going forward as well. Now, what the incentive for the exchanges was that they would buy these tokens at very, very low prices from the companies that were supposedly the issuers and then or they sold it for the exchange. There is a huge profit margin that. So, I think the S.E.C. does not take a good view on those pump and dump kind of schemes. Right. So, I think IEOs are exactly in the same line and ICO.
Shawn Flynn 26:47
Do you agree with all the past decisions that the SEC has made in this area?
Aman Johar
Well, I’m not in the business of regulating the trillion dollars’ worth of the securities market, so I like to stay in my lane. But having said that, I understand. Well, where the SEC is coming from and it is basically this, that the tokens are securities and you should bring the security laws into play when you’re trying to regulate them. Now, this is a little bit of a different take here. Is that. Well, the SEC also said that the token is decentralized enough. That it’s not a security. So now what’s really happened is you’ve kind of created this Catch 22 kind of this classic situation where the entrepreneurs world starting to launch a non-security token, they can only launch it if it is decentralized enough so that the SEC doesn’t think that it’s a security. But then when you’re launching it, you don’t have the decentralized network. So, the moment when you launch it, it is almost a security. So, I don’t know how to navigate that. It’s a very peculiar problem that we are trying to grapple with here.
Shawn Flynn 28:04
So, we just did this great interview with Ben Bartlett, who talked about micro bonds in the conversation he talked about because of blockchain technology, the transaction costs are now negligible. Are there any gaps that you see with this solution? What problems might still need to be solved?
Aman Johar
So, I think it’s a robust environment that governments are starting to issue micro bonds on a blockchain. And the key advantage like that, transaction costs are negligible. That’s all pretty good. So, there’s a solid case to be made about this. But on the other hand, I think, like I said previously, your kind of now competing against the established financial infrastructure. So, what would happen in the previous days was that these municipality bonds, they would just go to an investment bank and do the underwriting and boom, everything starts trading on a trader’s screens. Right. And nobody needs to understand. Well, where is the custody of these bonds? How the funds are being utilized? Because the underwriters did their job as supposedly. And everybody’s happy. But now when you’re issuing a on blockchain, that is where the issuers need to do a lot of that heavy lifting there. They need to be transparent about what are they raising the money for? How is it going to be used? That’s just the beginning part of it. Then they have to create this ecosystem where their potential buyers of those bonds. How do you make it easy for them to acquire these bonds? I mean, it’s not like you can go on to E-Trade or Bloomberg terminal, research about it or buy it or do something that’s been done forever. Now you have to create an onramp for these buyers to come in and buy your bond. When buyers are the customers are buying these. The question now is, if you own a financial asset, where is this custody? If there is a security breach, is it insured? Who has control over these digital wallets within which these financial assets are part? If there is a compromise on the private keys, who gets to own what? And do you lose everything? So those are issues that I don’t think have been solved yet. Although a lot of companies are working on point solutions again. So, people are working on wallets. But then the wallets are not integrated into an issuing environment. Issuing environment is not integrated with municipalities. So, you’ll see a lot of these proof of concept, as they say. But there is nothing that’s replicable at any scale right now that this thing can become mainstream.
Shawn Flynn 30:45
Now, you’ve had the opportunity to work with governments around the world. What has been your experience working with these governments? Can you share some of it?
Aman Johar
Yes, so I’ve had some interesting experience with EU regulators and some state governments in India as well. And it has been a very steep learning curve for me. It is easy for, I think, to look from the outside and rail against the government and say, well, they are just too slow to react to ongoing developments. But then when you start working with them, you realize that their intentions are good. It’s just that how it all comes out into the market, that’s a disaster. Right. But I have become a bit more sympathetic to the officials. And I know they are doing they’re in a tough spot in this day in and day out. But some of the genuine concerns that these regulators have is that, well, yes, we can enable a financial ecosystem that can compete with legacy architectures. But are we enabling terrorism financing? Are we enabling money laundering? So, they will want to have double and triple assurances that those things have been sorted out completely before they will even take a look at it. I mean, I was at a conference in Spain last year, and one of the things I was advocating for was to say that, well, we don’t need a standardization process right now because the technology is in a flux. It’s changing so rapidly that even if you come up with a standard or set standards to this, they will all be obsolete before you come out with your first draft. And some people on the other side, they kind of took it that I was advocating for no regulations at all, which wasn’t true because standards and regulations kind of are separate in a way. And also, anecdotally, I mean, I was meeting up with the innovation ministry of a European country as well. And we were just brainstorming blockchain ideas, and they were kind of in different industries from financial services to banking, energy, carbon credits, things like that, every idea that we put on the table. It was very swiftly discarded because either it’s too tough or there’s no talent or there is no political will. Or so many different reasons. Everything was just shut down right there. And it came to a point where I just had to stand up in the middle of the meeting and say, hey, guys, we are the Ministry of Innovation here. So, we’ve got to find a solution. It can be that we can we just get bogged down by all the challenges. But for innovation to prosper, you need some champions. All of a sudden, that brought in a very different perspective to the meaning. And the guys were like, yes, we understand the challenges. But then let’s try to figure out how do we overcome them. So, there’s a lot of willingness, I think, on the government to learn more and as things percolate down and as the ecosystems get built out, I’m sure they will jump on board. Be very supportive of DLT Blockchain Technologies or even cryptocurrency. I have my hopes up.
Shawn Flynn 33:58
So, let’s go to the future a little bit, say people become more involved in virtual worlds. How do you see virtual currency and real currency interacting with one another?
Aman Johar
That’s in more of a philosophical question today than a real answer that I can provide, because, I mean, take it the entire world runs on the US dollar. Every forex transaction is based on the US dollar. The Swiss franc is pegged to the US dollar and global trade is dominated by fiat currencies today. Well, let’s go back. Maybe a few thousand years ago, barter system used to flourish. But the problem with barter was that it wasn’t scalable because the distances that you could do a barter trade was very small, and then you had to find people who had the exact wants and needs that you had in order to make facilitated trade. Now, if you apply a similar concept to the digital and the virtual currencies, so we probably don’t need 10000 different currencies. But can we have ten thousand different markets places that can flourish? I think that can be the case as more and more physical assets are virtualized and digitalized. You will see those marketplaces spring up and bloom. That’s I would say if I look at the future, we will be trading maybe loyalty rewards from American Express or loyalty rewards or hotel chains or use them in an ecosystem that is much more convenient and much more transparent than what it is today. Yes, I know you can use loyalty rewards today, but what is the price you are getting and can appeal to trade even happen. Today, It’s not possible. But on the end of blockchain will, it is possible. And somebody will create a marketplace for it to make that happen.
Shawn Flynn 35:55
To continue with the virtual world, what will happen to hardware? Will the hardware interact in the virtual world? Or I mean, is hardware even ready for it?
Aman Johar
Well, the hardware will have to adapt. Right. And we’ve already seen the early phases of it with, you know, Oculus was a great example where now creating these virtual worlds. Now, the logical next step is what do you do in these virtual worlds? Well, in the virtual worlds, you are probably doing the exact same things that you’re doing in the physical world. For example, you’re buying a property like in these central lands. You’re using tokens to pay for virtual gaming accessories. So how is all of that enable? Well, you have your headsets, or you have your other hardware that needs to adapt to those kinds of situations. Why only just headsets? You’ll see a lot of that happening or connected devices. And when I say connected devices, they can be everywhere. You have autonomous cars. You have health care devices. You have industrial IOT systems. Can all of their interactions now be virtualized, Tokenized? So, that you are creating an ecosystem within which, like I said previously, there is a virtual currency that settles the trades that are happening in that environment.
So, the hardware will have to adapt. And the more you go into applications like economists, cars, self-driving, well, now you have a data center on wheels. So, your entire car needs to adapt to that environment. How does that happen? So basically, you are making real time decisions while travelling at 65 miles an hour on a highway. So, one concept is, are you are consensus mechanisms fast enough to be adapted to that environment or not? Now, this is where the choice of blockchain, like I said previously, you have to triage between what is the business model, what is the technology and what is the regulatory environment under which you are operating. So, autonomous car is a perfect example of that how do you choose your technology in that kind of an environment. Not everything can be done fast enough in software. So, you’ll need best hardware processors that can perhaps simulate consensus in real time. So, those things will have to catch up. I think we are still ways off.
Shawn Flynn 38:27
And then for every year, there seems to be new hot technology, artificial intelligence, virtual reality, smart homes. Normally I ask our guests what they think the next hot technology is. But I want to ask you, do you think the school systems or education system preparing people for the needed skill set for all these different areas of tech? Or do you think that they’re lacking?
Aman Johar
Well, that’s a good question. So, the way I would answer it is to say, well, if you look at the whole blockchain universe, nobody really learning about blockchain in at school. They just picked it up, reading articles on medium interacting with like-minded folks on Twitter are just tinkering with stuff themselves. And I think we are going to see more and more of this happen. So, schools, colleges, universities, they need to adapt to this kind of environment where all of a sudden there is some sort of a disruptive trend in coming in from the tech environment. And how do you create a skilled workforce to be able to adapt to that. And this also goes back to my previous comment about, well, even at the enterprise level, the depth of talent is pretty shallow. So, enterprises also need to constantly train and retrain their workforce to look at how technology is evolving. And I think all of these online mass online courses, they will play a big role in how the next generation of workers or even entrepreneurs are being trained and what they are learning. And they’ll probably go down the path of being more vocational than degree oriented or degree centered.
Shawn Flynn 40:14
And then I also have to ask you the next hot technology, do your opinion of it.
Aman Johar
So, we are focused in three different areas. One is connected devices. Like I said, and the writing is on the wall. Everything is getting connected, whether it is from a hardware perspective or creating the networks that go in, how these devices operate. Those are going to be big areas. The second is, like we talked previously as well, Fintech applications. Open banking. Open API standards that connect not only the bank to people, but also can that extend to the unbanked population as well. And I think we’ll see ecosystems evolving where both sorts of populations are in the mix. And the third is media and entertainment. And because that’s where all the virtual reality, everybody wants to be entertained, we are all humans at the end of it. So, we will devise new forms of content, new forms of incentivizing people to watch our interact with that content. And that’s where we are focused on to
Shawn Flynn 41:20
And Aman what else are you working on?
Aman Johar
So, like I said, blockchain requires a real ecosystem or it to be able to flourish. And increasingly I’m finding that that ecosystem also needs to include ancillary technologies. So, for example, blockchain is just a piece of software if you feed garbage data to it. You’ll get garbage results. So how are you collecting your data? Who is ensuring your data security? And when you are collecting that data, it means necessarily means that there is going to be some sensors or some connected device that is pulling in or measuring real world data and putting it into the blockchain. So how do you make sure that that is provisioned properly? It has the right credentials. It has the right security things. And that leads us back into the world that we are in today and all the hot technologies that we are talking about, A.I., 5G, sensor-based systems. They are going to be huge. And if they’re not already and they’ll play a big role in enabling blockchain as well and vice versa. So, what I’m really interested in is creating an ecosystem where both startups scale up opportunities can be connected into real world enterprise and deployment solutions. Because one thing that I’ve learned from my private equity experience as well is, well, if you don’t take the products to market in any scalable fashion. Building successful companies is not going to happen. And it requires those kinds of partnerships. And when you look around the talent that is there, every company cannot build its own AI engine. Every company cannot build its own blockchain or starting from the protocol to the application layer. Every company cannot have its own security solutions. So you need to be able to work in an environment that you trust with partners that are capable of understanding not only the knowledge that is being provided, but also enabling each other to go to market with a much better value proposition. So, when that happens, that really required. I mean, the way I look at startups getting out today is that these companies need to be able to build their own ecosystems in which they will play. And these ecosystems can then dominate whatever market verticals are where they’re functionally or industrially. They want to focus on. And that is what will be the go-to market strategy of the future. You can’t go to market all by yourself. Your customers are distributed, your technology is distributed. So why do you think that you can do it all yourself? It’s not going to happen.
Shawn Flynn 44:10
How are you working to solve this?
Aman Johar
That’s the interesting part, because in a lot of ways I am that centralized origin of myself today. But we are now really actively working towards partnerships not only in the US, but now we have a global presence. We are. Last year we opened an office in Barcelona. We have actual presence in about 23 countries where we can enable things very quickly and for whatever stage these startups and scale up opportunities are. Right. And that has value. I think.
Shawn Flynn 44:45
Aman, I have to thank you for your time today, and I also have to thank Bert Bernell, who made the introduction that allowed today’s interview to happen, his information the company works for will be in the show notes. But Aman, if anyone wants to find out more information about you, find what you’re working on. What’s the best way to go about doing that?
Aman Johar
Thanks for having me on the show, Shawn. It’s a pleasure. And to all the listeners, I would say just to log on to proteum.io and get in touch. I’m also on LinkedIn and Twitter @WonderingScapes. I also do a weekly newsletter. So, if you’re on proteum.io list. Send us your e-mail and you’ll get a newsletter every Tuesday at 07:45 in the morning.
Shawn Flynn 45:29
And Aman was generous enough to mention before that if our audience writes a review and shares this this amazing episode, he’s willing to tokenize some tokens for you. We won’t go into detail about that or the value which street value currently zero and will forever be zero. But it’s a good novelty item. So, Aman, thank you for that offer for our listeners and everyone out there. Please write a review and iTunes and stay tuned for next week’s episode, where we bring you amazing content here from Silicon Valley. All right. Thank you. Bye.
Aman Johar
Goodbye.
Outro 46:01
Thank you for listening to The Silicon Valley Podcast. To access our resources, visit us at TheSiliconValleyPodcast.com and follow our host on Twitter, Facebook, and LinkedIn @ShawnFlynnSV. This show is for entertainment purposes only and is licensed by The Investors Podcast Network. Before making any decisions, consult a professional.
