Sunny Lu CEO of VeChain Tweets: "VeChain is Positioning to Become THE #1 Blockchain, and Here's Why - A Systems Analyst's Perspective"
I wasn't going to post this since the front page has been inundated with VeChain shills lately, but after Sunny Lu himself tweeted saying my post was the closest thing he'd seen in the community regarding the true vision of Vechain...
So far, that’s what I read from community closer to the true vision of VeChain. Thank you, NTSpike, stay tune for more professional actions - Sunny Lu
https://twitter.com/sunshinelu24/status/949466550838296577
I'm going to put it up once more, but with an additional section of my thoughts on the use case and I tried to proofread it a little better this time.
After the recent shill posts I’ve seen that focus almost entirely on the price or merely gloss over what I believe to be the MOST IMPORTANT aspects of VeChain’s hype, I decided to write this up.
This is my perspective as a software analyst at a Fortune 50 tech company, with a background in Industrial Engineering, with the experience if implementing information systems, LEAN, and total change management. This is what I understand of VeChain's strategy, and why I believe they will succeed.
This is going to be long, and will include a TL;DR at the bottom.
Disclaimer: I am heavily invested in VeChain. I’ve been watching VeChain since it was $0.30 but I had bought heavily into REQ from 0.05 and couldn’t justify weakening my position. I started buying VEN at 0.80 and have been loading up ever since. It took months to reach this point but I finally pulled the trigger and sold off half of my portfolio (All of my REQ, ETH, XMR, ENG, ENJ, OMG) to go deep into VeChain.
The Strongest Team and Business Fundamentals In Crypto
While my portfolio has steadily grown with solid picks like ETH and XMR, my biggest wins have come through the smaller cap coins I’ve picked with strong business fundamentals.
VeChain reminds me of REQ, but on an entirely different level. REQ was the first small cap crypto I bet hard on because of my own intuition rather than Reddit shilling. I put in 30% of my portfolio in at $0.05. REQ just made sense. YCombinator backing meant the team had been vetted by a startup incubator that looks through thousands of teams. Winning the ING startup competition over 60 other teams reinforced this. The team was relatively unknown, but they had previous success with Moneytis and were delivering in their weekly updates and on their roadmap. This wasn’t just hype, the team had true value and the market hadn’t caught up to it. I’ve had a few other small coins recently go 7x+ with smaller investments by using a similar criteria (strong use case, team, and execution) in PBL, HST, and ENJ, and I feel this same way with VeChain.
VeChain’s team is incredibly strong. The CEO of VeChain, Sunny Lu, was the CIO of Louis Vuitton China. This is different than simply ex-Google, ex-Facebook, ex-whatever; not everyone in a given organization is truly exceptional. Sunny was the top leader of a globally renowned company's entire information technology portfolio that dealt with the problem he's now creating a solution for. Sunny Lu is one of the strongest CEOs in the crypto space, as he brings with him invaluable global business leadership experience, industry connections, and the technical ability to create new technology. Besides the CEO, the team is 70+ strong and has offices around the world. Their dev team is 40+.
Moving on, I don’t think VeChain’s status as a PwC portfolio company (http://ift.tt/2fEwGgP) is taken as seriously as it should be.
Quoted from that press release on PwC’s site:
“This incubation programme will help VeChain to accelerate their development, by providing the company with access to the Hong Kong and South East Asia markets and strategic advice leveraging on PwC extensive global network.”
PwC is a monster in the accounting industry. Their revenue is 37 BILLION dollars annually. Google PwC right now. The Google summary of PwC lists Ramund Chao as the chairperson of the PwC China branch. You can find a picture of him with the Co-Founder of VeChain at the signing ceremony in that link.
I have no doubt Sunny Lu has been able to leverage the PwC branding and gain valuable contacts to create these partnerships, and PwC in the future will push VeChain as a solution to their clients. Whether PwC is actively working VeChain or not, the stamp of approval matters in gaining the trust of other business entities. VeChain is PwC's blockchain play to beat their competitors in this space, and it makes sense for them to invest in its success in the future. VeChain directly enables their accounting processes by providing the information and data they need. Through PwC, VeChain potentially has a foot in the door of their entire client base, which literally spans almost the entire Fortune 500.
From PwC's own website:
In the last year, we have helped 419 (84%) of the companies in the Fortune Global 500 list, and 423 (85%) of those in the US Fortune 500 list.
Regardless of how involved PwC has been in VeChain's operations, the association to them is a game changer.
Partnerships/Deals
I won't go too far into this as they sell themselves. The Chinese government with Gui’an (The extent of this "deal" is unclear, nevertheless it is very promising news). The recently announced Healthcare Co. is a $1 billion dollar company, and they’ve agreed to put 20 million chips a year into the VeChain system for 5 years. Partnerships with the largest RFID chip producer and #1 and #2 NFC chip producers in the world. The car manufacturer Renault. DNV GL, a classification company with revenue $23 billion. News that there are several NDAs with their largest partnerships dropping imminently.
Ask yourself, what would happen if even a single of these announcements dropped for a similar sized project? That a $1B retailer was using REQ, for example? Investors would come flocking.
NEW - The Psychology of Authentication and Developing Relationships with the Consumer
It took me awhile to fully understand this but the genius of VeChain is in the way it combines the cold hard practicality and usefulness of data transparency in supply chain logistics and stopping counterfeiting, with the ability to develop unique relationships with the consumer and in some cases market in new ways. Here is an in depth video talking about VeChain's use case from the man Sunny Lu himself.
https://www.youtube.com/watch?v=38Mid9B6D0o
When companies in an industry adopt VeChain, they're immediately given a killer edge over their competitor in front of the consumer, while also saving money on their logistics and preventing counterfeiting. The amount of value VeChain adds is incredible at such a low cost.
Imagine you're not sure if you want Nike or Adidas shoes in a store, but that you can scan your Nikes with your phone and know they were authentic and exactly how it traveled to get to you? By suddenly having the information, the consumer will feel something lacking when they compare it to another product, and subtly the lack of trust will push them towards the products with VeChain.
It's like seeing a brand you don't know and Googling it and finding nothing. You naturally would trust less that it was an authentic product. People will begin to feel this way with products without VeChain authentication, not as connected and more aware they are simply trusting a third party that the product is genuine, similar to how we feel when we realized we don't truly own our assets in our fiat system.
Imagine applying this in the health food market. If you go to Whole Foods and one brand of organic food has a blockchain guarantee that it's absolutely genuine, that product would be the obvious choice for something you're consuming. With wine, which VeChain is planning, there's even an identity and a persona around the story of wine in, as it's important to know exactly where it's from and know exactly where in Italy your wine was made. Suddenly what was just a logistical advantage turns into an emotional advantage when marketing to consumers. Especially in the luxury market where you're buying an identity, having the peace of mind that your product is authentic and knowing it's journey to get to you can be a very personal experience.
This idea can fundamentally change the way we view products.
VeChain Rebranding as a dApp Platform and Why Difficulty in Transition Change Management Will Push Enterprise Adoption
In the AMA the other day Sunny announced that VeChain is no longer just supply-chain logistics and counterfeit protection, but a fully fledged Enterprise dApp platform, with scalability up to 10,000 tx/s. With a development team of 40+, previous experience as a CIO leading tech, and overall delivery on everything thus far, let’s just assume it will be a fully capable network. Proof of authority and a more well defined set of use cases adds to the feasibility.
I believe the price has been slowly growing and hasn't broken out as people still think of VeChain as a supply chain only solution, and not the enterprise dApp platform they are becoming. I answered the question of “Why would companies choose VeChain over NEO/ETH/ADA/etc?” the other day, and I think it deserves further exploration.
I have a background in Industrial Engineering, the practice of engineering processes/systems for maximal efficiency, but work in IT software implementation at a large tech company. I’ve worked in the implementation of several different software systems, for several different organizations. Transitioning businesses onto new technology is INCREDIBLY difficult, and re-engineering technical processes is a difficult decision for businesses to make.
Most people simply don’t understand the amount of work it takes to set up an enterprise information system. When you go to work and you hate that piece of software that never works just right, some team of systems analysts like myself, developers, and business employees probably spent months customizing it to fit the workflows of the business. These systems don’t work out of the box, they usually need to be painstakingly configured. People need to be trained. You need support staff.
Why am I bringing this up? Blockchain is an emerging technology, and getting companies to adapt their workforce to it is going to be a challenge for any business. As a side note, I believe Sunny Lu's previous CIO experience makes him uniquely qualified to lead VeChain and guide the CIOs of other companies to adapt to their blockchain.
As I said earlier, I work in a Fortune 50 tech company with products you likely use on a daily basis and even we have incredible difficulty migrating onto new software and workflows, and supporting the system. I recently implemented an IBM product earlier in 2017 and we are still working out the kinks.
Ease of Implementation and Minimizing Risk in the Enterprise
I’ve been part of the selection process of what information systems to implement to solve a problem, and our selection process isn’t necessary “what system is the best?” What tends to rule the day is the product with the highest cost/benefit ratio, which hinges on ease of implementation, and confidence in the vendor. If I'm a Fortune 500 company looking for a blockchain solution, who am I going to pick? I'd have one team, VeChain, who is being directly championed by PwC, a long-time partner and trusted force in the business world, or the shiny, technically strong blockchain solution that I have no previous connections to? IT implementations are costly and projects failures are devastating. Business will go with what they know to be safe.
VeChain is already grabbing billion dollar partnerships left and right, and will continue doing so in the future. These companies are all migrating onto the VeChain blockchain, and will have to go through the growing pains of expanding their IT capabilities to support VeChain. They will need to create processes to manage their VET/Thor Power tokens. They will need to train their people and hire outside consultants to assist. It will be incredibly challenging.
Now tell me, imagine these same companies are looking to implement a blockchain solution to solve another business problem. Do you really think companies are going to want to go through this same process with another ecosystem when they’ve adapted their workforce to support VeChain? VET/THOR will have to be adapted into the company's bottom line, their IT, their finances, their taxes, etc. Many clients will invest in the ecosystem by buying VET tokens to generate their own Thor Power. The path of least resistance (cost and time) is going to push these enterprises to continue using the fully capable dApp platform that is VeChain, and for others to develop dApps on it as well, possibly for sale for others. This is going to compound over time as the initial trust in VeChain will grow as other trusted enterprise businesses (not small bootstrapping ICO teams) build dApps on the platform.
Enterprise Blockchain as a Service (BaaS) - How Logistics/Anti-Counterfeiting Use Case Will Ensure dApp Adoption
Hype comes and goes, but ultimately money goes where there is true value being created. VeChain is so exciting to me right now because with these strong fundamentals, it is hardly a cryptocurrency, but rather one of the first Blockchain as a Service (BaaS) ecosystems with overwhelming evidence of future enterprise adoption. This is different than something like the Ethereum Alliance, where many enterprise players are interested in the development of the technology, but you don't see Samsung or Microsoft with explicit plans to buy Ethereum and develop dApps on it.
Businesses in every industry with physical products will enter VeChain’s ecosystem through the incredibly valuable and efficient logistics/counterfeit protection arm, then stay within it for the entire offering of services provided. This is the only cryptocurrency I feel has a compelling case for success even without blockchain mania, as it's logistics use case will guarantee it's dApp platform gaining adoption. Once VeChain gets off the ground it will be nearly immune to the crypto crash we all fear, as it will be an enterprise eco-system being used by billion dollar players in almost every industry, and not fueled solely by rampant speculation.
For all these reasons, I’ve essentially gone all-in on VeChain for the time being (The other half of my portfolio is XRB). I have never seen such strong fundamentals in another blockchain project with real world evidence that real business is occurring. When players begin expanding upon the network transactions with dApps on top of the logistics transactions, I can't imagine how high the price could go. I could see current day Ethereum marketcap in 1-2 years.
I invite you to look deeper as well if you haven’t already. These next two months will be pivotal in the future of Vechain, and if you're going to join in it's in your best interest to get in before the rest of market catches on. This is the first time I've seen a convincing case where a dApp platform has an incredible way of pulling business into it, the right people to pull it off, and seems to be executing thus far.
TL;DR: VeChain has one of the strongest teams in crypto, led by a CIO in a global brand who dealt with the exact problem they are addressing. They have secured some of the strongest business relationships and deals in this crypto space, and have delivered every step of the way thus far. As a dApp platform, VeChain will flourish as massive players enter through their logistics/counterfeit protection services and stay within VeChain after they’ve adapted their organizations to support the system.
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