S3E23 VeChain: The future of Blockchain in the real world.

hi sunny thank you so much for joining us 
today thank you sunny it's great to see you   uh it's been quite a while since we last met 
in shanghai so let's kick start by introducing   yourself and your background and journey to v 
chain sure um hello everyone my name is sonny liu   and i started reaching roughly in 2015. before 
that i was acting as a cio of louis vuitton china   and i start to know blockchain like in 2012 or 
2013 and i was fascinated about this technology   and started to think about do something about 
it and two years later i made a final decision   to quit the job as a cio but started reaching 
starting from then and since then vision has been   devoting ourselves to enable blockchain technology 
value to transform to be let's say business value   to serve different enterprise level applications 
uh to help the different enterprise whatever the   big corporations or small startups um to easily 
build and adopt and embrace blockchain technology   and find the value out of it so um that's 
basically what we have been doing and we just   been doing one thing and i think we have done 
pretty well very interesting very interesting   you work at at the louis vuitton and they 
came up with the idea to launch the business   for blockchain right so your background you i 
mean that you work at the louis vuitton did that   i mean does that help you come up with the idea 
to launch the blockchain for example i understand   that luxury good has a lot of fake goods right so 
everybody asked about i mean how can we identify   how can he check the real product any product yeah 
sure of course um actually that's uh that was one   of the major reason i decided to uh start the 
blockchain company since then um you know i i've   been studying about the blockchain following 
the trains everywhere for two years um two or   three years and i find that very interesting 
phenomena at that time in blockchain space   most of the people players in the crypto space 
are technic technical guys you know right very few   people have let's say a business mindset or they 
don't know how to let's say connect the technology   to the business but actually that was that was 
the major job as a cio you know we're building the   bridge between business and technology you always 
find how the technology can serve the business so   create the value so i thought you know that was 
my chance i know blockchain very well and i i know   how to do a cio job i know how enterprise think 
about the technology how to use that how to adopt   that so that's why i made a decision to uh to to 
start with that yeah and also in the beginning   of v chain you know for sure i use my 
old connections in luxury industries   i have friends all over the place and um 
start to connect to them that that actually   bring brought us you know uh the first decline uh 
givenchy um one of the brand in uh in every match   and we start with a very small sku and just 
you know start to manage um like the supplier   manufacturing process but right now we cover like 
100 of leather goods uh globally and uh manage   like the entire supply chain yes so i already 
see that you already have a lot of international   partners and as you mentioned the solution 
right now it would be really nice if you could   explain the business model of a company step by 
step that would really help us to understand um   sure um actually uh if we talk about the business 
model of each and actually we need to talk about   let's say we need to start with what blockchain 
application is you know um obviously we have been   in this space for for quite a while we see 
some misunderstanding in this space from the   markets you know when people and especially those 
enterprise executives when they think about okay i   need to embrace blockchain technology because it's 
cutting edge you know represent for the future   um so i i i need to find a blockchain team or 
blockchain startup or blockchain company whatever   right but actually it's not right because 
when we talk about the blockchain application   maybe 80 of the job is not really linked to 
the blockchain itself it's really linked to   the business innovation business process change or 
the new business value could create it because of   the value or because of the feature of blockchain 
technology so um that's why our strategies to uh   collaborate with different partners uh there are 
some big partners like dmv um a very big global   tic certification body in the world and also like 
a private water house coopers one of the big fours   actually the biggest one so they have quite 
in-depth you know industry know-how they   know how to um you know go through the business 
processes with clients and do the analysis do the   consultancy and in the end they also could help 
us how to integrate the blockchain technology into   the enterprise systems as well and eventually you 
know build up the blockchain applications so our   business model let's say is bring the solution to 
the different clients whatever the big and small   um and also collaborates the partners so actually 
there are there are several different type of   collaborations sometimes the clients will go 
to let's say our partner like the pwc or dmv   ask for a total solution and then 
we provide the technology to the   partners and eventually to our clients or 
some clients will go to us you know like   most of the enterprise users they were like okay 
we need to find a number one in the blockchain   space so they they came to vchem but we usually 
ask them like a hold on um you might need some   professional service providers whatever like uh if 
you are talking about a certification or business   or authentication you might need something 
from dmv or you might need something from   pwc or even a small company uh small startup as a 
partner they could have a very dedicated uh let's   say vertical expertise in some areas like uh like 
the suzhou v trust they have been dedicated on   public safety and um uh you know fighting 
against the kova 19 helping the governments   so our our partnership actually uh help us to 
ease the process to lay down the application   based on the needs of the clients even 
sometimes they don't they don't have a   clear um thinking like uh what the application 
really wants they just say i i want a blockchain   but going through some details going through some 
you know business updates we need professionals   yeah agree agree and uh actually that i 
interviewed a couple of the entrepreneurs who   are the running business base and the blockchain 
idea but i came to have questions uh like uh   yeah a blockchain by itself it it is immutable and 
the tamper-proof and then traceable great idea but   when we applied that idea into the real world i 
mean they we may have some issues and challenges   to sort out right for example physical good can 
be compromised for example in china i unders i   remember that we i read the news a few years ago 
milk baby milk formula pal powder is a lot of fake   and foraging so that is a simple idea why don't 
we apply the blockchain technology to give that   trust i mean bridge the gap the thing is that we 
can put the qr code whatever in order to trace the   i mean logistic process and then origin of 
the product but still some people can't uh   compromise the physical good even uh i mean even 
even without touching the qr code whatever right   that's that real world challenge challenges 
for in many cases also i remember that   ibm and with a couple of global logistic 
companies shipping company in germany   they came up with the consortium to provide 
a solution based on blockchain to the for   the account i mean international the account 
receivable financing right actually because i   i'm from the banking and finance a lot of people 
try to i mean the i mean when you played and then   or the duplicate financing so they received 
based on the one single document and   transaction they tried to receive money from 
the corporate bank that kind of incident keep   happening in the real world so i thought it is 
great idea if you can sort sort out that issue   but i think that story has been in the market many 
years but i haven't heard any dramatic changes   thanks to the blockchain technology for the 
that kind of incident in the account reasonable   international trade financing so can you share 
the what are the biggest realistic challenges   to overcome and serve the uh i mean solve when we 
apply the blockchain technology in the real world   yeah sure um well firstly like i mentioned um 
blockchain technology is is still a baby you know   it's just uh growing let's say starting from 2009 
but for the first almost 10 years you know it's   basically um focus on how to make the technology 
more strong or more let's say compatible or even   more scalable but you know right now i would say 
the the challenge to the entire blockchain space   is about how to integrate or how to find the 
business value or how to let's say um solve the   real problem but also like i mentioned blockchain 
cannot like acting as a loan you know it's not a   superman you cannot you know fly and ride they 
should come up with the recipe recipe right   yes and they usually they need to work with other 
technologies right especially like iots or ais   um like you mentioned about like you know 
the physical goods can be tempered or can be   compromised you could use iot to help that i 
give an example we have we called fragile nfc   or fragile ifid could attach to the outside of 
the box of the goods so when you open the books   uh you know box the the chips will be broken so in 
order to do this kind of uh you know verification   but again also again no technology can solve 100 
a problem but even they could increase like five   percent even one percent of efficiency or accuracy 
you know that could give us lots of um let's say   improvements to to solve the problem bit of a bit 
or year by year um also i would say um you know   working with other technologies very essential 
um because but also our challenges yes give an   example when we started like in 2016 we tried to 
find a iot provider to work with us because we   we have expertise in blockchain but not the others 
right but obviously at that time no one would   understand what blockchain is or winning investing 
into this space so you know what i did i acquired   iot team at that time using maybe like almost 
like half my assets in the company to do that   but right now we have sensors we have chips 
multiple different shapes like hundreds types to   to to you know to fit different products whatever 
the luxury goods or medical bottles or wines you   know lots of different use cases and also most of 
the time you need to work with a big data you need   to work with ai because when you think about data 
tampering or record tempering 99 of the chance it   happened it will happen like afterwards so for 
most of the enterprise you know they do business   as usual no one will start like okay i want to do 
something evil and then i start the business right   most people don't do that so they usually do like 
business as usual and most of the time they have   like unexpected events happen whatever it's a 
human error or like something you cannot control   it just [ __ ] happens so they were like okay 
maybe i can do something to change a little bit   so i can get over with it okay i can get away from 
that just once and then they could have this kind   of a you know behavior or habits or whatever um so 
what blockchain is doing is like they they could   make the business activities records and you 
know in a daily basis it's it's not like you just   do a once a year for example when you do uh 
you're in the financial sectors right if a   listed company or public company they 
need to do a financial artist once a year   right and also if you do like business audits um 
to prove your quality of products or to prove the   contribution of sustainability something like 
that you you you usually hire experts to do   audits once a year so the experts who are flying 
over do some interviews do some sample testings   collecting the data and write a report say you 
pass fulfill that's the usual auditing phases   but with blockchain you could recall the 
business activity on a daily basis and approve   that happens at that time and then 
from the big data point of view   you can analyze you can find a problem very easily 
you can save lots of costs you know from those   auditing companies from those uh certification 
bodies they don't need to send over the experts   everywhere to the client side they can just look 
at the data even the ai will look at the data and   the experts just you know do some uh just watch 
the warnings or notifications and then they can   look into deeper if something not right that kind 
of thing so you could save like i would say more   than 90 percent of the cost of this that's i i 
believe that's also the reason why we have the   two shareholders you know dlv and the pwc they're 
representing exactly the industry i'm talking yes   shall i uh ask the next question so uh what's the 
biggest challenge for you scaling your business is   it uh the talents or money or sales or marketing 
anything you're you feel like you lack right now   well um i would say the biggest challenge is 
always um like let's say most of the startups   uh you know when you try to create a startup or 
you are you are doing a startup uh three things   as a ceo you know you keep the three things in 
mind all the time the thing like the strategy or   the executions what kind of thing you're going 
to do what kind of products you want to push to   the market and then the people because you need a 
team you cannot acting alone you need the people   to do that and especially uh in the faster growing 
industry like a crypto like a blockchain usually   the business will grow faster than your 
people then you find a gap right and you   need to either make sure your team is growing 
as the same speed or you find the better people   always and then third is money i always say least 
you need to concern is about money but still   the resource i think it's it's more than 
just about the money but also the resource   the business connections um you know um the 
the the government relationships and prs   marketings always linked to the resources um 
you know could help you to act through that um   but besides the three things um very challenging 
for sure i think the biggest challenge into   uh to blockchain not only to vegan itself but also 
to let's say the entire blockchain space is still   the adoptions like how to solve the real problem 
with the technology features other than just try   to make some quick cash that's that's actually 
quite common in the past few years and um you know   try to let's say resist this kind of temptation 
is very challenging but so far we have been doing   quite well and we're being you know insist on uh 
how to transform the technology value to business   value how to continue to build and deliver um but 
yeah it's it's very challenging yes i like your   answer yeah most popular answer is money in fact 
fundraising which is a very very tough right but   i mean based on mine out of the all of the 
challenges i would say making money maybe the easy   is the same yeah yes if you do the things right 
i mean the right business model with right team   money will chase you right yeah yeah for sure yeah 
if you chase money it's very difficult to catch   yes yeah but understanding your background you 
work and the brand company brand owner right   and then now you're providing services right to 
help with who has a brand and business model or   whatever right so very different uh i mean side 
so my some question is that i mean have you   thought about that i mean launching a blockchain 
business model by yourself instead of providing   services helping the blockchain-based business 
model um well i i think we're doing the bose   we're doing the most firstly vechain has quite a 
well-known reputation in the entire world i mean   in the crypto and blockchain space and even out 
of blockchain space i give an example recently   we just close a very big client in china and 
um you know i i i i i know ceo a little bit   but not very well maybe a couple of launches 
but when his team to bring up the solution   and name up the v chain and then he 
say oh i know this um it's from sunny   so i only say i think one thing i learned from 
um you know the experience in louis vuitton is   branding is also very important um you know you 
need to show to the public you need to show to   the people especially for something new like 
a blockchain people and also very complicated   people will find it's very difficult to understand 
or to you know at least not the first uh gallon so   first catch right so you got to have a well-known 
reputation and branding and people could trust you   and trust your expertise and trust your 
professionalism so they could you know   congratulate you to do um you know to help 
them to do the blockchain applications   um so i think we protect that pretty well we never 
brag anything out we just you know make sure even   something um some let's say some of the people 
from blockchain community they were they were   sort of like oh you guys are too quiet you guys 
are like like like no marketing something like   that but actually it's it's just normal saying 
normal marketing and for most of the enterprise   you know building up application with the new 
technologies especially with new technology   it's going to take time but in 
the blockchain space they always   wish you know something could happen in 
one day or one night yes it's unrealistic people are selling uh something too high 
level right yeah too fancy too fancy right   yeah so i would say like we we like to pay 
you know very solid foundation we want to do   step by step because we hold long-term vision i 
believe blockchain technology can can really shape   the world like internet did like 40-50 years 
ago um so i'm looking for at least like a 20   or 25 years career ahead it's not like us three 
years uh i'm going to retire the kind of a thing   so uh okay so uh what is uh on top 
of your mind for the next system   um well actually it's pretty much the same 
since the beginning um you know our vision is   to make a v chain so blockchain platform as the 
most used platform or creating most business value   uh blockchain platform so we never changed that 
uh just you know we for sure the strategy or the   executions we could have a different target from 
time by time right now we're focused on polish   our tools and services along with the platform 
itself to make to enable different builders   you know whatever big enterprise most 
startups can build blockchain applications   very easily super easily um like in two 
weeks or one week with a very little   entry investment but grow with our clients so 
grow our with our users that kind of way yes   it feels like you're providing great solution to 
the market because many people who are running the   business based in blockchain talk about they're 
selling under something very high level right   about the fancy things about the blockchain but as 
you mentioned is a blockchain as a new technology   it is a very powerful but still has a lot of small 
detail issues and problem in the ground right   so you're providing to trying to putting together 
the i mean combine the solution to help with the   business based on blockchain that's great idea 
yeah i have a question uh this is very specific   oh should i buy v chain and how do you see the 
market price right now like you should buy one no no well honestly i never give anyone 
even including my mom or my dad before   you know i never give them the suggestion 
well financial advice about that but uh but   i what i can tell you is like i 90 of 
my assets are still invention for sure   because i'm doing it thank you so much for taking 
time to introduce the v chain and then it feels   like you provide a great solution to the market 
yeah thank you thank you very much thank you

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