The world seems to be fascinated with blockchain of late, and since its creation in 2008, it has attracted a fair amount of attention and a rapidly expanding list of use cases.
Blockchain gives users a high level of transparency by recording and tracking transactions through a network of computers, and as a result, records cannot be changed without affecting other records (or blocks) in the chain.
The popularity of blockchain is debatable — whether it comes from the meteoric and controversial rise of Bitcoin (and the greater cryptocurrency market) or the need for increased transparency as a result of governments and corporations being shady with our data depends on who you speak to.
We think the rise of blockchain ties into a trend of increased transparency and ownership, not just in the financial space, but also in the organisations and brands we choose to interact and spend our money with. We wanted to delve a little deeper into how it may affect organisations and how you can survive in a decentralised world.
In Episode #9 of OneMoreQuestion Ross spoke to entrepreneur turned venture capitalist, Yossi Hasson, about blockchain, being guided by your values, and how to build a brand when you’re dealing with decentralisation.
Decentralisation and branding
The term ‘decentralisation’ was first coined in 1820, and was later used to describe how the French Revolution began — it’s not a new process, we’ve just been paying more attention to it over the past few years.
Decentralisation is the process of taking power away from a central core in an organisation or group. It removes an overbearing state of authority and distributes power.
It’s been happening in brands and organisations for a while, albeit in smaller waves. A jump in decentralisation came with the proliferation of social media.
It’s been said a million times, social media allowed everyone to become their own little publishing house. We’re pinning this as a small wave of decentralised communication. The advent of social media meant that organisations didn’t need to pay media houses to put their messages in magazines or on TV — they were able to create their own content and post to Facebook or Twitter. On an even smaller scale, individuals weren’t forced to just listen to the messages that brands were putting out, they were now able to talk back and brands were forced to listen.
Traditional brand communication was flipped on its head and brands had to listen and adapt or risk a backlash.
Some brands got smart and rode the wave of decentralised communication by utilising User Generated Content (UGC) — a great example of this being GoPro.
GoPro gave its customers a sense of ownership in their brand by taking user videos and building their social media channels around them. Doing something cool? Record it, tag us, and we’ll share it on our channels.
- It was a cheap, highly effective way of creating content
- It showed the usability and durability of a GoPro
- It showed that GoPro was listening to its users and gave them power in brand communications
- It allowed GoPro users to feel part of a greater community
It’s been such a great recipe, that GoPro still uses it today.
So, where to from here?
As decentralisation gains more traction, we’re seeing customers examine the brands and organisations with which they choose to do business. It’s no longer just about your product, it’s about the wider impact you have on the environment, your stakeholders, and the greater community.
We live in a time where it’s very hard to have some kind of truly unique offering, with the wave of competition and technological change, that’s not the thing that’s going to keep you differentiated.—Yossi Hasson, One More Question
Customers want to know that you’re staying true to your purpose and that your values are aligned to theirs. With a wealth of choice in almost any product on the market today, the best way to differentiate yourself is to draw a line in the sand — this is who we are and this is what we stand for.
We are going to see customers taking greater ownership in the brands they use. This may not be in the extreme of owning a stake in an organisation, but we’ll surely see a rise in stakeholder involvement and organisational transparency.
Here’s where we think we’re some of the most noticeable change will come from:
Customers will want to know what is happening with an organisation at all times (and at their leisure). This doesn’t mean a press release per day, but it does mean that organisations will need to keep open lines of communication, from sourcing to pricing, and news surrounding the organisation. Don’t surprise customers with unannounced organisational change or a poorly handled crisis.
Driven by values
Customers will look to support organisations that align with their values. Organisations will need to openly state their values, stay true to them and prove that they live them, or risk losing support from what could be their core market.
We’re moving into an impact economy where organisations will have to show the difference they are making. This may align with organisational values, or it may speak to the change that you can bring about when dealing with clients — it’s about working for the betterment of the environment, your customers, or your community.
All of this speaks to co-creating and participating in an organisation and how it operates. Though they may not be an investor or play an active role in decision making, it becomes important for customers to feel that they are supporting, and part of, an organisation’s journey.
When it comes to brand building, decentralisation isn’t something to fear, we think it’s quite the opposite. It’s an opportunity to open your organisation to its customers and a chance to build stronger relationships. As long as you remain true to your purpose and values, your organisation should have the ability to benefit through the transparency decentralisation creates.
Preparing for survival
To survive, we see three concepts that organisations will need to come to terms with. The level to which organisations can commit to these will vary, and smaller, more agile organisations may stand to benefit the most. With that said, larger organisations can take lead form these and implement them on a less radical, more manageable scale.
Transparency leads to authenticity
Decentralisation is going to open organisations up to stakeholders. As organisations become more transparent, there will be less and less room for those that don’t deliver on their promises. Organisations will need to accept that they are no longer closed systems and that it’s no longer just about selling. Authenticity becomes key.
Everlane wants the right choice to be as easy as putting on a great T-shirt. They partner with ethical suppliers, use high-quality materials, and don’t design to trends (avoiding fast fashion), to ensure they create clothing that lasts.
They also believe in radical transparency — showing you the true cost of every product they make, from materials and labour to duty and transport.
Authenticity builds loyalty
To ensure that they don’t stray from their stated path, organisations will need to have a clearly defined purpose and set of values. These will serve as a guiding light in all decision making. Purpose will lay the groundwork for why an organisation exists, and values will dictate how it operates. By measuring themselves against their purpose and values, organisations will be able to achieve a heightened level of differentiation and build a base of loyal customers — this should also keep them from competing on price.
Patagonia has always been guided by its purpose and a clearly defined set of values:
- Build the best product
- Cause no unnecessary harm
- Use business to protect nature
- Not bound by convention
Cause no unnecessary harm and Use business to protect nature perfectly align with their decision to donate their $10 million corporate tax cut to groups protecting air, land, and water and finding solutions to the climate crisis.
In December 2018, Patagonia updated its purpose — We’re in business to save our home planet — as recognition of the urgency of the current climate crisis.
Listen and co-create
In a decentralised system, stakeholders will naturally want a say in how the organisation behaves, especially if they are loyal customers. By listening to their customers, organisations will be able to build a more loyal customer base. This can be taken a step further through co-creation, giving customers a say in how and what the organisation creates.
Ikea, leaders in practical, well-designed furniture are also leading the way when it comes to co-creating alongside their customers. They understand that their customers are the experts in their own lives and that they may have unique solutions to developing products.
As a result, they have given their customers the chance to see what projects Ikea’s design teams are working and involve themselves to help find the best solutions. Customers can view project updates or find a project to contribute to.
Moving power away from a central, authoritative core will also provide benefits over and above just keep an organisation afloat.
- By giving your customers agency to influence the direction of an organisation, you allow them to become personally invested in a brand, which inspires more loyalty
- Dispersal of power creates a sense of equality and may safeguard against decisions previously made in an ‘echo chamber’ — a small group of people are not necessarily the only ones responsible for the success of the organisation
- By opening up your brand to a community and finding customers that align with your values, you have the opportunity grow through recommendation (word of mouth still trumps most marketing) and leverage the power of their networks, in which you will find like-minded individuals
Blockchain and decentralisation are set to affect far more than just the world’s financial markets, and if we’re brave enough to open up and accept a dispersed model of ownership and creation, brands stand to not only differentiate themselves more effectively but also build loyal followings that help them build products and services and take their next steps to grow.
Remember, it’s about clearly defining your purpose and nailing your values to a mast — these act as a guiding light and a signal to those that align with your mission. More importantly, for us, it makes the whole process of work more fulfilling and fun.