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The race to future-proof the economy: Navdeep Bains on the state of innovation in Canada

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Financial Post | James McLeod | Feb 9, 2019

The Innovation, Science and Economic Development Minister gives the Financial Post an early look at Ottawa’s report card on innovation that will be released next week

Navdeep Bains wants Canadians to know that things are happening. Lots of things. The Innovation, Science and Economic Development Minister has a big job on his hands, hauling Canada’s economy into the 21st century by embracing artificial intelligence and a panoply of digital technologies to boost productivity and keep us globally competitive.

But the federal government’s innovation agenda is still very much a work in progress. One of its pillars, the five marquee superclusters spaced evenly across the country, is mostly just an idea at this point, although $950 million in funding is beginning to flow. Does Canada feel more innovative than it did four years ago? Are we future-proofing our economy and seizing the jobs of tomorrow?

Bains certainly thinks so and that belief will probably be part of the Liberal’s pitch to voters when the country goes to the polls later this year. Next week, he will release a 100-page government report called Building a Nation of Innovators that mostly serves as a collection of the various policies, programs, plans and funding mechanisms the government has undertaken under the auspices of innovation.

See:  Fielding high-performing innovation teams

In advance of the report’s release, Bains sat down with the Financial Post to talk about innovation and the economy.

FP: With the Innovation Nation series we’ve been doing, one of the themes that is emerging is that Canada has a real opportunity to seize the future economy. But we may be missing that opportunity if we’re not really proactive. We could be falling behind. As a country, are we innovative enough?

BAINS: Well, I beg to differ a bit. I think we have turned the corner. I think we are starting to create this culture of innovation in Canada where we have an economy that works for everyone. The key part is that it’s benefiting the many, not just a few, and it’s creating good quality jobs. And we’re really focused on making sure that it’s also inclusive, that it benefits people living in rural Canada, that it benefits young people who are getting coding. That’s really our goal.

FP: In reading through Building a Nation of Innovators it seems like it’s mostly looking back at the last two or three years since the Innovation and Skills Plan. Is this an election (campaign) thing?

BAINS: This is a report back to Canadians. In 2015, we said, look, we realize the economy is struggling. We put forward a plan and said we’re going to invest in a set of policies and programs to really benefit many Canadians and have it work for many Canadians. And so this is a report to Canadians on what those investments look like. What does it mean for Canadians living in Toronto, or if you’re in Red Deer? It’s telling Canadians, we made these investments. We ran on a campaign to invest in Canadians, to invest in their skills, to invest in companies so they can grow. We’re highlighting those in tangible ways in communities across the country.

FP: That does sound like campaigning.

BAINS: No, it’s a report card, because people need to know as a government you made promises, are you living up to those promises? And what does it mean to them, to their communities, for their own prospects and for their kids’ prospects? The speed and scope of change is phenomenal, and that creates anxiety and concerns that Canadians have. And we’re dealing with that and saying, look, we want you to succeed.

FP: How do you manage that pace of change? The people who are losing their jobs at the Oshawa GM plant are not going to start coding iOS apps overnight. How do you make sure people aren’t left behind as you make the shift?

See:  Passion For Banking Innovation Fueled By Fintech, Big Tech Disruptors

BAINS: Well, that’s a key part. It’s really about making sure the economy, as I said, works for everyone. We’re promoting lifelong learning. Coding is an example to teach young kids critical skills, problem solving, how to work in teams, understand and develop digital literacy. But we also have programs for individuals mid-career. If there’s a change in their work, they can go to school through a grant, they can go to school with an interest-free loan and get the digital skills that they need.

FP: But do you actually believe that the people who lose their jobs to automation or shifts in global supply chains will take up coding and pursue those kinds of jobs?

BAINS: It’s not about coding only. That’s just one example. We recognize that all these sectors in every region are going through a major transformation. It’s about making sure people have the broad skill sets they need for those job opportunities.

FP: Why is the government’s responsibility so broad in this? It’s striking in reading the Building a Nation of Innovators report that there’s money for fundamental research, incubators, scale-ups, every stage along the way. Why does the government need to be dragging the economy into innovation? Can’t we just get out of the way and let this happen?

BAINS: We’re in a race. We’re competing with other jurisdictions. We want to level the playing field. Do you think China is getting out of the way? You think Europe is getting out of the way? You think the United States is getting out of the way? No, they’re all playing an active role. Why would we take a hands-off approach? The Conservatives clearly presented that as an option in 2015 — that laissez-faire approach. But it’s about creating the conditions of success for Canadians to get more job opportunities and, more importantly, for companies to grow and stay here in Canada.

FP: Something as simple as educating businesses on the importance of intellectual property — teaching them that if you’re going to exist in the 21st century, you need to have intellectual property — seems pretty basic. What do you think it says about the country that we need something like that?

See:  Quebec needs new innovation strategies to level the playing field for domestic tech

BAINS: It really is a partnership model. It’s not about us dictating this. It really reflects what we heard from Canadian businesses, academics, researchers, different communities from across the country before we came forward with the Innovation and Skills Plan. Our objective is to really help those businesses understand the value, because for every company that promotes IP, for example, they on average pay 16 per cent more to their workers. For us, it’s about better-quality jobs.

FP: But if the preponderance of our small and medium-sized companies don’t understand IP, if the culture just doesn’t get that, isn’t that a massive problem?

BAINS: That’s the thing we’re trying to accomplish, really create this culture of innovation, saying we want a country full of innovators.

FP: We’ve been looking into the superclusters as part of our Innovation Nation project. They have been in the works for quite a while, but, still, I don’t think a lot of people really know what these things look like. And in a couple cases it’s a bit of a mess …

BAINS: It’s about jobs. It’s a job magnet, and it’s about the jobs of today and the jobs of tomorrow. And really, fundamentally, what did we do? We used our convening power to bring businesses together — large, but primarily a lot of small businesses — breaking down the silos, promoting collaboration and saying, look, work together to solve problems.

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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org


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FINTECH FRIDAY$ (EP24-Feb 8): Re-imagining Philanthropy with Daryl Hatton, Founder and CEO of ConnectionPoint/FundRazr

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NCFA Canada | Feb 8, 2019

Ep24-Feb 8:  Re-imagining Philanthropy with Daryl Hatton

About this episode:  On this Episode of the Fintech Friday's Podcast, our host Manseeb Khan sits down with Daryl Hatton the CEO of Connection Point. They chatted about microprojects, saving little girls and puppies and how to get hooked on Philanthropy. Enjoy!

  • Focus on value and avoid the complicated terminology when growing new innovative markets
  • Branding customer segment-focused funding products, white labeling collaborative uses cases
  • Crowdfunding for good at the intersection of technology, people and impact

Host: Manseeb Khan, NCFA, Fintech Fridays show host

Guest: DARYL HATTON, Founder and CEO, ConnectionPoint / FundRazr (linkedin)

BIO:  Daryl Hatton, CEO of award winning international crowdfunding company FundRazr and of the innovative sponsored crowdfunding company Sponsifi has founded multiple start-ups and helped bring one to a successful NASDAQ IPO in 1999. He actively serves as board member or advisor to handfuls of other hot companies in Canada. In addition, he is a Director and Crowdfunding Ambassador for the National Crowdfunding Association of Canada. As a social media guy and frequent public speaker, his Twitter tagline includes words like “#KingOfGastown, entrepreneur, cardiac survivor, foodie, whisky nut, philosopher, mentor, father and friend.”

* Senior Business and Technology Executive
* Proven Corporate / Product Development Execution
* Collaborative Leader / Corporate Strategist
* Experienced in Tech Mergers and Acquisitions
* IPO (OPTO) on NASDAQ 1999
* Successful sale of OPTO to EPAY April 2008
* Successful sale of Backstage Technologies to Real Networks 2010
* Multiple private buy/sell transactions while at Optio
* IPO (Modatech) on TSXV 1987
* Multiple successful software startups with Angel / Private Funding
* Mentor / advisor / board member of multiple startups
* Successful, deep partnerships with PayPal, Facebook, Twitter, Google

Subscribe and tune in each Friday to check out the latest movers and shakers in fintech.

Listen to more Fintech Fridays podcasts: Season 1 | Season 2


Transcription of Interview

Intro: Welcome fintech Friday's a weekly podcast brought to you by the National Crowdfunding and Fintech Association of Canada and partners.Covering all things fintech block chain be AI and alternative finance.

Manseeb Khan: Daryl thanks so much for sitting down with me today. I mean I'm super excited to jump right into it.

Daryl Hatton: Happy to be here. We're going to have some fun.

Manseeb Khan: Awesome. So, could you just for the audience give us a little bit of who you are and essentially who and what Connection Point?

Is sure  well I'm Daryl Hatton founder and CEO companies call connection point. We're best known for FundRazr which our  enterprise crowdfunding platform is. I'm a serial entrepreneur, startup company took a public on Nasdaq way back in nineteen ninety-nine and we had one of the fastest growing companies in the U.S. that year. Fast forward a bunch of years and I left that and said gee do I want to do business again. And I started Connection Point six months in the day after I left the other company. And along the way we started to do fundraising. We learned a whole lot about the market. And here we are.

Manseeb Khan: Awesome. So, what made you kind of switch. Like so why crowdfunding ? Like this was I'm assuming this is early 2000s, right? Like you said you were essentially one of the OG's entrepreneurs out here. Yeah. Why crowdfunding ?

Daryl Hatton: It was actually 2008 and one of the things that we were looking to do is like I want to start this new business but because I was under an intellectual property rights deal with my previous company actually couldn't think about it really. And being careful about it didn't want to think about it while I was with the other company. So, six months in a day I now get free and out and I said OK what can I do. And it took from about September of that year until January to really figure out that I wanted to get into the social funding space. And the reason I was doing it was I was coaching a lacrosse team and I was looking for ways to get paid and to raise money for my team. So, I collect some fees and take some donations because we had a 50/50 turnouts and all that kind of stuff. And I had a little epiphany. I was trying to also get the guys out to practice and I was sending out emails. Nobody was showing up, but I started a Facebook group and posted the date, time of practice and I had a 100 percent attendance. The first time I did that, and a light bulb went on and said Hey can I get them to pay their fee like that. And FundRazr was born. So, it really was all about trying to scratch my own itch and in the early days as we developed the idea of paying the fees really didn't take off very well. But the idea of collecting donations went nuts and that's what we built the company around.

Manseeb Khan: Awesome. So, could you still sticking on the early days I know on our call before we  even started the episode you compare like the early days of crowdfunding and how it's very parallel to now the early days of crypto and Block chain. Could you just go a little bit more detailed about that?

Daryl Hatton: Oh, for sure yeah. I mean when we started crowdfunding no one knew what to call it. And I even had the opportunity to buy crowdfunding dot.com as a domain name and was given some advice by a bunch of people in the industry going I never nobody ever wanted to call it that. Yeah right.  Oops. So, you know the interesting things that happened at that time, but we were really struggling in the beginning to try and talk about this intersection of social media and of finance technology and of marketing technology all into one platform that becomes a crowdfunding campaign. So, we used the word crowdfunding a whole lot. And if you went to the crowdfunding conferences everyone was talking crowdfunding and to the people who were not in the industry, they would come in they hear us and they're going. What the hell are you guys talking about. Like you're not making sense. All you're doing is dropping these buzzwords all the time and one of the things that I hear going on now at crypto conferences and block chain and the whole area of the new innovation and fintech around this is the same thing. There's a ton of terminology. Ask an entrepreneur what they do. And they'll have you know they'll talk about how they've got this unique twist on what they do with block chain to do Dut, Da Dut, Da. One of the lessons we learned from the crowdfunding world is can you explain what you do without ever using your buzzword. Can you explain the value of your business to somebody and have them get it? Why it's important. And why you're going to win without ever using the words. So, for any crowdfunding or any sorry crypto or block chain entrepreneur right now can you tell me why your business will be successful without ever using the words crypto or block chain or any of the terminology around it. What's the business value that you're delivering to the customer. And why is that really important. It may be a technical function that you're delivering but there's a business reason and they're not just a technology reason. And the companies that win are the ones that figure out how to communicate that business reason and build the technology to solve it. Big learning what we had over that time is just you know kind of buzzwords are cool and let make you feel like you're in the crowd but stop it. Start talking about your business and the value and the customers may see a little bit more boring. But it's got a way better higher chance of success.

Manseeb Khan: No, I absolutely agree with you. And I guess I mean like you took a misstep and you said crowdfunding. I think crowdfunding is still in that same conversation. Now you want to be able to kind of give the elevator pitch with like your industry jargon. Right. You want to be able to like to go to like roll up to any random person at Starbucks and kind of like hey this is actually my business does sound like a good idea right.

Daryl Hatton: Yeah. And you know it's easy to stumble into. I mean as I just did it you know it's a shortcut for us to try and take a set of concepts that we have in our head and communicate more easily to other people who also have similar concepts. And it’s just good practice to try and do it without that. Yeah. Absolutely. It's  kind of fun once you get into it because you get to laugh at yourself a lot. Keep taking a shortcut.

Manseeb Khan: Yeah. I can absolutely see that see that. So, you guys focus on an enterprise crowdfunding could you just explain a little bit like why is that different than the Kickstarter's and the Indigo's goes out there.

Daryl Hatton: Well yeah it might help to kind of hear the path we've got to with that. And so, let me give you a little bit of background. When we started our crowdfunding platform, we were all about personal funding. Helping people raise money because they had cancer, they had a tragedy, they had a car accident something happened in their lives and they needed emergency funds. And the best way to do that was to talk to the friends and family and get them to the money to help because those are the people, we're most invested in helping you. And it worked, it saved babies and it helped people recover from car accidents and then help people deal with medical bills especially in the United States and along the way. You know we one of the ways we had to communicate was to use Facebook to share and as we were doing that some non-profits came along, and they said you know we love this kind of toolset but it's kind of weird to use it as a person. So, could we use it under the name of our organization. So, we start. Or the name of our charity. So, we added features in to make it so that you could do a personal campaign or charitable campaign. And that ended up you know giving us a whole new set of requirements but a whole new set of customers. And then Kickstarter the time was doing a good job and Indiegogo was starting to do more in funding of entrepreneurial style projects or creative projects. And we ended up getting asked hey can we find our project with you because you guys seem to be really good at social sharing. So now we've got three constituent groups of customers personal, nonprofit and now entrepreneurial or creative and over the period of time as we built out all the features for all of those it started to become what we call an enterprise crowdfunding platform. And the reason for that is that we're solving a lot of the problems for those customers at a much more deep level about things like team` communications around running your crowdfunding campaign. Can you have a lot of people on your team both as managers. Which is pretty easy for most apps to think about but then also as things like promoters. Can you hire somebody on to the team whose job it is to go in and promote you to influencers in the industry and track the results and help figure out whether or not they're helping you raise money for your campaign. So, we call it an enterprise crowdfunding platform right now because the basics of what a crowdfunding campaign are have morphed into. In our case over 10 different ways to do campaigns and some of them are very charitable focused. Some of them are very personal focused and some of them are very much a business focus.

Manseeb Khan: I LOVE THAT! I kind of want you to tell the story that you told me over the phone of that father reaching out to you about as a little girl and like how the example that you use like some people create a business to create a business. Some people kind of fall into the business. Can you can you tell that story a little because I loved it so much.

Daryl Hatton: Yeah. You know one of the things people look at us with FundRazr and there is we've got the different brands we'll talk about this a little bit as well is that there's different ways to do crowdfunding. And when people look at our technology, they get confused by it. So, we actually give it different brand names to help separate the customers apart from each other. Funny enough. But the story that you're referring to when we first launched in it, we kind of have to do a relaunch of the platform in July of 2010 after surviving a near-death experience with Facebook kicking the chair out from underneath us and we'll talk about that maybe too. But basically. So, when we started the campaign and we're focused on these personal donations and my goal in starting this was to build a business. I wasn't trying to go save the world. I wasn't trying to raise money for charitable causes and that was because it was a good thing to do for the planet. I was trying to build a business and we were really struggling. Trying to help ourselves understand why customers were using this and what they were really trying to do. And it feels now like we were just so totally naive about what was going on. But so, we launched in July of 2010 and we're going along we're watching this incredible growth happening. All these people are using these campaigns and we're really focused on how we help them raise more money but not really thinking about why they're raising more money. And then we got a Christmas card, the Christmas card was from a family that had been living off the grid in Hawaii. I think there was maybe people living on the beach kind of thing. He got out of the U.S. military they'd hooked up as a couple they'd had a little girl and you know so they didn't have. They were kind of dropped out a little bit to the system. I think they didn't have health insurance that kind of thing. And they discovered that their little girl had been diagnosed with childhood leukemia. So, in the race to try and figure out how to save her again no health insurance in the US there for that. They found out that the military hospital in San Diego would take her because he'd been in the military, but they had to get the girl there A.S.A.P. because childhood leukemia is a very fast-moving disease. So, they put up a campaign or a FundRazr and they raised that I think it was thirty-five hundred dollars. They needed to get the flights. Like you know right now and given the low accommodation when they hit San Diego and they took a couple of days and they got her there and when they got her there the doctor said if you hadn't got her here today or tomorrow, she probably would have died. And so, they sent us a thank you card saying thanks for helping save our daughter's life. We didn't I mean that just smacked us hard. We had no idea that really that was kind of an end result if you will. The business value of what we delivered wasn't raising money. It was helping save somebody's life or helping save a puppy dog or helping someone recover from an accident. Those are the things the real value we're delivering it wasn't collecting money in a social environment. And so that epiphany just really changed how we looked at the business. And you know we still are a profit-making business, really low on the profit side because we're trying to scale it and it's a harder market than people might think. But it is you know there is that nice benefit that we actually have this big business value. That's a very personal value in a very charitable value in the background and that's a fantastic way to come to work every morning and think about what you do for the day is you help people save probably dogs and little girls.

Manseeb Khan: Yeah, I mean that's probably the best customer testimonial I've probably ever heard possibly ever if not in a very long time. You did briefly before you jumped in the store you talked about how you broke down your business in to different kind of brands could you talk a little bit more about that and how that ties it to you guys scaling because like you said you guys are not as quote unquote profitable because you're trying to scale. Could you talk a little bit more of the challenges scaling and being a crowdfunding service?

Daryl Hatton: Started connection point and we knew that. I don't know. I just had this hunch that the technology that we were going to build would have more than one use case in the marketplace because really,  it's a marketing system. And so what kind of problem are you trying to solve with it as a marketing system was a personal? Was it corporate? Was it charitable? So we started a FundRazr with the idea that it was the general-purpose platform for crowdfunding using a donations or a rewards type model. So, donations model being your traditional charitable thing. GoFundMe is a good example of that. The rewards model is the Kickstarter or Indiegogo model where you're doing an all or nothing campaign and you're giving the donor some reward back. So that was really it took the majority of our focus and energy and as a result we tended to lump more customers into that pile than we may should have because you know it was just more convenient just as kind of keep them focused on the one brand for a while. But over the last couple of years we've really noticed that a couple of different use cases are showing up that are worth separating them out from the main stream. So, it's all the same technology with a different skin on it and sometimes a little bit of a tweak to the feature set an example that is one of our brands we call CoCoPay. CoCoPay stands for collaborative community payments and it's designed to be used by businesses to allow or enable their customers to use crowdfunding to help them finance the purchase of the product or service. That's a big one mouthful but if you imagine I don't know if you remember. I don't know if we had this chat but there's the company in the States called in Enchroma and they do glasses that you can put on and if you're colorblind it'll help show you colors for about 80 percent of the people who are colorblind that put them on. It's really emotional to not have seen color. And now to see it. I mean this world is full of color, but the glasses are you know mildly expensive there between if you do it right, you're probably going to get two pairs of them they're going to be between five hundred  to one thousand dollars and some people can't afford that. So if you go to the Enchroma web site there's a spot on their site where you can use our technology to start a crowdfunding campaign that will with a  Enchroma branding tell the story using  Enchroma glasses and help you communicate that to your friends and family and co-workers and others in your social network and help you buy the glasses. Now it might be for you but one of the most common use cases is to buy them as a gift for somebody else. So, a classroom we'll get together buy them for their teacher and then or someone will buy them for a military vet they had that happen. Not quite sure how they got there with colored blind, but they did. So that was really cool. And then you know they'll buy them for Grandpa because Grandpa has never had it always took care of the kids, got them go to college, got the grandkids going  never really took the time to figure it out for himself or was it didn't have anything available. So, the family gets together buys Grandpa glasses that let him see color for the first time and the incredible folks tell you how to do it right to capture your YouTube moment. They say take a whole bunch of colorful balloons and take him outside somewhere and don't tell him what it's all about it just ask them to put all these cool looking sunglasses and they look cool stylish glasses and usually what happens is the glasses go on the glasses come off. The glasses go on glasses come off and whoever it is crying. And they because you know it's that it's a super emotionally, I get it and there's some guys that have just gone off on the oh god, Oh my God they're so funny. But the point is that by allowing the community to work together to buy something it may not seem like it's big a use case. But if you get into a lot of medical devices that are maybe ten thousand dollars because you need special Walker you need something that gives someone mobility. They may not be able to afford it right away but their friends and their family and their social networks would go let's fix that for them. Their good person we'll fix that for them and CoCoPay lets them you know safely raise the money and pay it to the company as opposed to paying it into the individual so that you don't have to worry about fraud and it's all or nothing so that if you don't raise enough money nobody's out you know you don't get halfway towards buying one of these things and now what do you do with all the money and refund it to everybody and take a few gets the payment companies you know you're kind of in a net loss for trying to do something good. So, it takes all the best of the crowdfunding technologies of all or nothing social sharing teamwork collaboration in our case you know branding of the company and puts it all together in a package that somebody can use to crowd finance a purchase. Is some idea of where it's the same technology? But if we're going to sell it to a company, they don't want to come to our Web site and see that we're raising, we're saving puppy dogs and little girls they're going how does this affect our business. Why am I doing that? And so, there's a dedicated site to CoCoPay to talk about its business value. But ninety-nine-point eight percent of the technology is the same as FundRazr.

Manseeb Khan: Mm hmm. I mean this does bleed into I guess my next question of corporate good right and how you're seeing. You've mentioned that in the phone call we have that how corporations are now not for the sake of oh hey we're going to go and plant trees just for the sake of planting trees. Now we're going to go and pick an issue that our customers or clients are very passionate about and then try to spearhead it and like the best example I can think of would be when Adidas and Nike decided to take all like ocean pollution plastic and remake it into sneakers because ocean pollution was something that both companies audiences were very passionate about. So, they created a sneaker behind it and that started this whole renewable shoe movement. Right. So why is or how is corporate got like corporate good better or better than the government initiatives that are going on or the charity initiatives or it is, or should we see it as more as like a tag on.

Daryl Hatton: One of the things I didn't say in the beginning. If you actually look at mission of what we have with Connection Point we're trying to well, we are We're reimagining philanthropy. And one of the reasons that we want to do that is that the hypothesis is that we can get causes, corporations and consumers to all work together to solve world funding problems because that everyone can have a win in that and the collective group of all of them also gets a win. So, for example you know you said it very well that consumers are now wanting to have their companies do more than just supply them the product. You know in the case  of the shoe companies they saw an opportunity to not only sell shoes but to solve an environmental problem at the same time. And they knew through research that their consumers would really like that. That's got a kind of a social impact space. You talk about multiple bottom lines you know the bottom line I get a great pair of shoes from a brand that I love the story behind the shoes is fascinating and fantastic. You know these used to be junk in the ocean and they've turned it into look at these things these are amazing. And that at the same time that's reducing pollution in the ocean. So, the consumer there is driving that behavior because they are demanding more from their partners and the partners are interested in doing this because it builds loyalty with their customers. Their ability to go in and use the best things of what corporations can do which is communication at massive scale and the ability to actually execute on programs to change social problems and in some cases though they need to have something like a charity partner actually do some of that work for them especially when it gets into softer skills. So if you've got a company that's not about saving plastic but maybe helping with mental health or maybe helping with child poverty or food distribution or food  safety quality for lower income families all sorts of things like that the corporation might want a partner with a charity for the charity deliver the work in the field but then be able to use the fact that they're supporting that charity as a story for their consumers saying hey you know we all care about this together. Why don't you buy our products? We work with this company and there's a trading of value that goes on in that system where they get money to the charity to do the work the consumer feels great because they know this charity is doing the work. And they may end up establishing a better relationship with the charity and they're more loyal to the company for buying that product. So, it I think it's one of the changes we're going to see in society in the next few years. Is this is going to become the standard way to do it. Because it takes advantage of the strengths of all three parties and we built a product around that that we call Sponsifi and Sponsifi designed to do the place where the company can even make an offer of to the donors or the contributors on how they might want to further support the cause. So again, getting that branding out there that says we're supporting this cause and helping the company get better value for the money that they can spend on it and a more measure of resolve. So that was a lot of words in there, but you know if you can take out the idea that basically cost corporation consumers are going to work together because they already are. We just want to make it easier to do and less expensive for the companies particularly. And I think we're going to see something else transform society.

Manseeb Khan: Yes. No absolutely that's kind of what crowdfunding is what one of the missions of crowdfunding is  to make the world make it a better place right. If it's be that you're saving a little girl or you're saving a little puppy or cleaning the oceans right like though the of the whole part is especially with I mean millennials like me. We love to see that like corporations’ charities governments are taking more of an initiative to actually go after these social causes because these social causes are so near and dear to our heart. And now that companies are kind of using that  maybe some  could be as a marketing ploy some could because they actually truly believe in the said cause it's. Yeah. Crowdfunding. It's going to be very exciting in the years to come. So, with that what is the future of crowdfunding look like. And essentially what are you excited about in the space right. Are you excited that maybe in the future you might have like this block chain integration? I excited that you can start tokenization a lot of donations?

Daryl Hatton: There's lots in there. Let's just before we go there let's think about one thing around. You know I talked a lot about causes and what's going on there and a lot of entrepreneurs that might be listening to this are going here. But what has that applied to me. I don't know I'm just trying to startup and I want to get this product out there and I'm having trouble with funding it. So, one of the benefits of crowdfunding in here is also the fact that because it enables communities to work together to solve a funding problem that's basically the bottom line and what it does. Let's not worry about whether it's charitable or corporate or whatever but if we all can work together and help us work together on that. One of the side effect benefits of this is that businesses that need not have been able to start before because of lack of capital can take a community of interested customers/prospects and we'll be customers and use the model to help them preorder enough product that they can go through the R&D phase the initial production run and get the product into the hands of consumers who really want it. That's a social benefit because now we have a company that was created out of thin air literally and it's providing income and it's providing satisfaction to consumers and it's providing opportunity for people that live out some of their dreams and maybe change the world because they've got a better widget in some form. It's more efficient it's more friendly it's easier to use, it goes faster whatever the real benefit in there is those things are helping our society as well. And a lot of the entrepreneurs that are starting up campaigns right now are small companies are realizing that they have to have that kind of social responsibility aspect baked into their company for two reasons one to attract their customers. And I think this is actually way more important doesn't get enough press to attract their employees. If you want to work for nameless soulless company, you know big office tower why I am here every day. This sucks you know I don't enjoy my work I don't really feel like I'm making an impact or by the way we work for the company we're really clear the part of what we do is to help with this social problem or you know 10 percent of the proceeds of the profits from our company go to support the producers families who are helping us build this neat new eco backpack you know I don't know make up a story there but basically that feeling of going to work and having purpose which we discovered by accident is one of the key motivators for digital natives, millennials and gen Z to want to go to work and they will work really a ton of harder and put more of their life into their work when they feel like that work has got an impact on the planet. So, you can use crowdfunding as a way to help fund the idea. And for all entrepreneurs that are looking to start up a business there. It's a great way to get revenue into your company without having to give up ownership you know equity and securities. Crowdfunding is great but you are giving up. It's the most expensive money you'll ever get because it costs you a big chunk of your company in the future. But sometimes that's all you can do. So, you do it. But if you can fund it with some of these others and have that social tie in you can not only launch your product but build a company where people want to work and where you can have some real satisfaction to work home at the end of the day. So, I think there's a lot in there and that's one of the things I'm very excited about. You know that's part of future is now because it's just not evenly distributed. Well who is it. Who said that the future is has arrived it's not just evenly spread out? We can do that now and then to answer your question about some of the other technology you know what I think of crypto and block chain and much of that industry about is how we make things more transparent and make it easy for us to see kind of our thread that ties through the financial story of the organization.  So, in the charitable world we look at this and say if you made a contribution to a cause to build wells in Africa. Which well in Africa did my money go to build in crypto being mechanism for kind of tracking where the value is with block chain being where did it deploy. What's the ledger of it seems like it's going to be a very interesting topic because when people make a donation they really want to know what good they did? And I can see some technology in there helping make that happen at the moment it's a bit of a geeky love because consumers aren't necessarily demanding that level of transparency, but it could be really cool once we have it because then they might start demanding it more once they know they can get it. So, I think there's lots of things will happen in our financial world because of this distributed ledger capability.

Manseeb Khan: And I think you'd like to harp on more of the transparency aspect. At some point I think people would be pretty excited to see that like oh hey I like that little girl that I donated 30 bucks to. You can kind of track it like how you track like your orders on Amazon right. At some point we'll probably get to like that level of transparency. really. Oh cool. They actually hit this goal or the next milestones that's like that's something to kind of look forward to and it's like it's maybe not gamifying it but like it's you know it just like fueling the fire of  doing good.

Daryl Hatton:  Your right on with that we actually do that now in FundRazr. We have a concept called micro project and we've been leading the industry and trying to talk about this transition from don't fund. I'll give me a really concrete example of this.

Manseeb Khan: No please do!

Manseeb Khan: There's a cause called One Girl Can that helps girls in Eastern Africa get an education because the founders of this cause were very successful in business and  the couple he continued to run the business and she decided to run her foundation on the side of it and the foundation was about helping these girls get an education because they knew that the change in the quality of the life for them and even more so for the members of their community was so huge. So, what they were doing is they're building schools in Eastern Africa. And last year we said to them you know that's a major project to build the school. What if we broke it down into a whole series of micro projects? Let's talk about each of the girls that needs to go through these schools and what would be their life like if they were able to go. What are their hopes and dreams and aspirations and let's get people to fund them individually because in aggregate you're going to get enough money to do your funding for the school? And so, we call that micro projects dividing a major project down into the hundreds or thousands of small little projects and our technology is designed to make that really efficient. But now the interesting thing the stories that can come out of this imagine that you know you sign up to help  Purdy one of the girls and she wants to be an engineer because we know that you signed up to fund just Purdy. We can send you updates on what's happening with just Purdy and her journey going through school. So, giving you that same kind of ongoing view into your social investment different you know you put in money but if you're looking for a social payback and not a financial payback. Letting you track Purdy progress we said our you know dream story here is that Purdy adds to her campaign because she's an adult she can do that a young adult but she gets out to her story saying guys I'm really nervous I'm going in for my final here. I really appreciate all the support you've given me to get to this point. M.M. You have an audience in North America around the world waited with bated breath and a little while later you get a thing going. I passed and happiness is going over North America. Because together they made a difference right. Yeah. So, it's that we're doing it now without having to have that level of transparency in the block chain you know to do that but maybe block chain help make it a little bit more precise a little more guaranteed.  That you know what really happened. Somebody just didn't read a verdict. You know the janitor there you want to know that you actually get the good work. Yeah. It brings up other stuff like how do we find overhead? But that a different problem to solve.

Manseeb Khan:  I love the fact that how. Like your example really solidifies the. It takes a village to raise a child. You're going to like hopefully in the future you're going to see like actual like villages or like  digital villages helping raise children like in Africa or like Syria or when they have you only got like following that story it's kind of like its kind of like a vlog.

Daryl Hatton: So, it's well you know I think one of the other projects we're looking at is to fund portable solar powered charging stations in for villages in Africa. And would people be willing to donate to help make that happen if they can hear the stories of the villagers lives that have been transformed. Because when they have power they can study. The kids in the village and study at night without having to burn kerosene in their homes which is so hard on their health and is expensive. So, if they could end up having light that will let them on their laptop or their phone or their board the tablet, they're starting to get some technology but they don't even have power yet. Giving them a way to have power, would consumers around the world be willing to support some of that and in you know in exchange for the stories that are going to come out of that village and the impact it's going to create. And if you take a kind of an interesting view of philanthropy as a form of entertainment it's a discretionary spend like it's we just choose to spend it. But some people are willing to spend small amounts of money to see that that result happen more than wanting to go to a movie or wanted to go up for you know a lot of people say hey I'll give up a cup of coffee discretionary spend element  every day for a month just to make sure Purdy gets through example right. That's philanthropy as entertainment. And I think that's one area we're heading to as well.

Manseeb Khan: I love it. Philanthropy is entertainment. I can.

Daryl Hatton: We're reimagining philanthropy. We've got to do that. You know you have basically all of this it is brain chemicals where you're buying endorphins and oxytocin when you make a contribution. That's how warm lovely feeling you get when you feel like you've helped somebody is oxytocin. It's the brain hormone and funnily enough it you know if you give lots of little gifts you get way more of it than if you give one big gift. So, in some ways I mean we're brain drug pushers. We're trying to get you hooked on philanthropy and crowdfunding is your gateway drug. So just be careful.

Manseeb Khan: I'm definitely using on the podcast description of crowdfunding is your gateway drug to philanthropy.

Daryl Hatton: Philanthropy is entertainment. God this story is writing itself right.

Manseeb Khan: Oh yeah. It really is. It really it really is. So too.

Manseeb Khan: I mean hey do you have any additional things you want to throw in like any anything that the audience should be aware of either. Things that you guys are doing at your company or thing other things that are going on in the crowdfunding space.

Daryl Hatton: I think one of the things that I would love more entrepreneurs to know in this is that if we're in the crowdfunding world together you know I talked a lot about how it takes community and I think first startup community in especially in FinTech space and others it is really important for us to think about how we help each other as opposed to how we're just always in competitive mode or selfish mode because it's amazing the amount of help that we've had on the way and the amount of help that now I can help muster for other startup companies. I'm currently advising 20 different startups and you know I've got a nice network that I've built up over the years that they can count on to help them. This working together thing which we learn through doing our crowdfunding business is one of the keys to actually making your business successful. And I really encourage a lot of the entrepreneurs to think about that that when they're thinking about how they ask for help. Also ask how they can help, and it changes the conversation dramatically. And you know you get much better results much faster.

Manseeb Khan: So, to wrap this up will be the best way for the audience to either contact you personally and or Connection Point. Do we snap you? Do we tweet you? do we e-mail you? Smoke signal? What we'll be the best way to contact you guys?

Daryl Hatton: Best way to hit me find me on LinkedIn. Daryl Hatton mention the show or else I might ignore you because so many sales guy is trying to hit me up that way and you can FundRazr.com.

Manseeb Khan: Awesome Darryl. Thank you so much for sitting down today. I mean and thank you for opening our minds to crowdfunding and making the world a much better place.

Daryl Hatton: Thanks for having me talk soon.

Outro : you've been listening to fintech Fridays brought to you by NCFA and partners. Tune in weekly for the latest fintech Friday podcast by subscribing to this channel. The National crowdfunding and FinTech Association of Canada is a non-profit actively engaged with social and investment fintech sectors around the globe and provide education research industry stewardship services and networking opportunities to thousands of members and subscribers. For more information please visit and see if a Canada dot org. Oh yea.

 

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Modern Consensus | Leo Jakobson, February 4, 2019 Move is latest series of steps by regulator to bring clarity and less confrontational approach to regulations enforcement The U.S. Securities and Exchange Commission wants to know if the technology to help it monitor major cryptocurrency blockchains for risk and regulatory compliance issues exists. The SEC is not looking to buy big data analytics tools at this time, but characterizes its interest as “conducting market research to determine the availability and technical capability,” of the tools presently available on the market, it announced in a notice on Jan. 31 What the SEC wants to know about is the “ability to provide the requested data but also an overview of the processes used to extract the data, convert the data into a reviewable format, and the verification steps to ensure there is no loss in data completeness and accuracy due to the data transformation tools and processes applied.” The software it wants would also make the data easy for SEC staff to read and understand on an ongoing basis, and would provide insights about that data—notably identifying who the data belongs to—as well as a way of ensuring the data is accurate and ...
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FINTECH FRIDAY$ (EP24-Feb 8):  Re-imagining Philanthropy with Daryl Hatton, Founder and CEO of ConnectionPoint/FundRazr
Forbes | Michael del Castillo | Feb 4, 2019 It’s a balmy 80 degrees on a mid-December day in Singapore, and something is puzzling Allen Day, a 41-year-old data scientist. Using the tools he has developed at Google, he can see a mysterious concerted usage of artificial intelligence on the blockchain for Ethereum. Ether is the world’s third-largest cryptocurrency (after bitcoin and XRP), and it still sports a market cap of some $11 billion despite losing 83% of its value in 2018. Peering into its blockchain—the distributed database of transactions underpinning the cryptocurrency—Day detects a “whole bunch” of “autonomous agents” moving funds around “in an automated fashion.” While he doesn’t yet know who has created the AI, he suspects they could be the agents of cryptocurrency exchanges trading among themselves in order to artificially inflate ether’s price. “It’s not really just single agents doing things on their own,” Day says from Google’s Asia-Pacific headquarters. “They’re forming with other agents to have some larger group effect.” Day’s official title is senior developer advocate for Google Cloud, but he describes his role as “customer zero” for the company’s cloud computing efforts. As such it’s his job to anticipate demand before a product ...
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Bloomberg | Doug Alexander | Feb 4, 2019 Without digital keys, clients lose access to coins, funds Board said last week that it was seeking creditor protection Digital-asset exchange Quadriga CX has a $200 million problem with no obvious solution -- just the latest cautionary tale in the unregulated world of cryptocurrencies. The online startup can’t retrieve about C$190 million ($145 million) in Bitcoin, Litecoin, Ether and other digital tokens held for its customers, according to court documents filed Jan. 31 in Halifax, Nova Scotia. Nor can Vancouver-based Quadriga CX pay the C$70 million in cash they’re owed. Access to Quadriga CX’s digital “wallets” -- an application that stores the keys to send and receive cryptocurrencies -- appears to have been lost with the passing of Quadriga CX Chief Executive Officer Gerald Cotten, who died Dec. 9 in India from complications of Crohn’s disease. He was 30. Cotten was always conscious about security -- the laptop, email addresses and messaging system he used to run the 5-year-old business were encrypted, according to an affidavit from his widow, Jennifer Robertson. He took sole responsibility for the handling of funds and coins and the banking and accounting side of the business and, ...
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Crowdfund Insider | JD Alois | Feb 1, 2019 Regulation Crowdfunding (or Reg CF), created by Title III of the JOBS Act, has been available for several years now. While not without its shortcomings, Reg CF has been leveraged by hundreds of issuers, typically smaller firms, raising over $100 million since May 2016. This past week, Crowdfund Capital Advisors (CCA) published a report on Reg CF entitled “2018 State of Regulation Crowdfunding,” providing a snap-shot of the securities exemption and its overall performance. Crowdfund Insider communicated with CCA principle Sherwood “Woodie” Neiss regarding the report. Neiss told CI the promise of Reg CF as a jobs creator and economic engine is starting to prove true: “Back in 2012, the promise of Regulation Crowdfunding was jobs, a local economic generator, and an industry revitalizer. With the close of the 3rd calendar year of Reg CF we can see that those promises are holding true. Reg CF is proving to be a jobs engine (creating on average 2.9 jobs per issuer), economic generator (pumping over $289 million of revenues into local economies) and industry supporter (enabling 82 unique industries in regions across the USA).” See:  Prominent Group of Fintech Leaders Send Letter to SEC Chair Jay Clayton Demanding an Increase in Regulation Crowdfunding ...
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Open Banking: What’s Really at Stake

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NCFA | Richard Remillard | January 28, 2019

A National Project

Open banking has many definitions and multiple characteristics. At its core though is the concept of empowerment – the empowerment of financial consumers, individuals and businesses alike, that comes from transferring control over financial information to clients away from established financial institutions.

Because of this potential which promises to democratize financial transactions, much has been said about open banking in recent years. And, insofar as Canada is concerned, all that talk misses the point.

Properly considered, open banking is the national project for the 21st century digital, mobile, connected economy.

The only real question is: can Canada build such a national project when it is having such difficulty getting national projects for the 20th century economy off the ground, out of the ground and out to market?

Think pipelines.

See:  Why Open Banking Represents a Seismic Shift for Fintech

Causes for Concern

Already, there are worrisome signs.

  1. First, we are behind other jurisdictions such as Great Britain and Australia and there are indications that other countries will soon follow suit. Just as the US has moved smartly to develop and sell its vast reserves of shale oil while Canada’s product remains landlocked so too we risk being leapfrogged by the likes of an Estonia on the open banking side.
  2. Second, governments are engaged in full consultation mode and the policy commentariat ranging from the CD Howe Institute to Canada 2020 have been cranking out papers and hosting events on open banking at a rapid rate. The federal government has set up an advisory council following the 2018 budget while other federal departments and agencies from the Bank of Canada to the Competition Bureau have already been pondering the issue. However, the general public remains outside the discourse which to-date has been confined to the chattering classes.
  3. Third, one key interest group is claiming territorial jurisdiction, namely established financial institutions. Just as First Nations have demanded that they be fully brought in to the pipeline approval process, so too have the chartered banks weighed in with admonitions to proceed with all due haste – but, slowly, very slowly.  Not wanting to be seen as anti-innovation and anti-consumer choice but also wanting to protect their fat margins that are derived from maintaining the status quo.
  4. Fourth, Canada’s record on financial innovation is not stellar. Capital has been flowing into fintech startups but there is nothing to suggest that Canada is at the global forefront of financial innovation adoption. These days, observers point to countries as diverse as Kenya and Singapore when looking to fintech leadership. And, then there’s China and the US each with a host of flagship firms and fintechs, often bundled together in novel ways.
  5. Fifth, part of the problem with pipelines as with open banking is the never ending federal-provincial jurisdictional turf battle. We can’t seem to get a national securities commission (another pipeline project that’s thoroughly gummed up) which does not appear to be a priority for anyone any more. For open banking to be truly comprehensive would likely require a level of federal-provincial cooperation that has not been much in evidence lately.

A 2019 fearless forecast: no open banking, any time soon and certainly not in 2019. For Canada to participate in this financial innovation bold leadership will be required from committed participants unafraid to shake up the established order to bring about the birth of a new way of doing things.

See:  Fintech firms want to shake up banking, and that worries the Fed

Creating the Winning Conditions

Left to its own devices, the policy process today would likely grind out a classic Canadian compromise of the kind that we excel in producing, much like promoting both environmental protection and a resources-based economy. However, in the realm of open banking, allowing things to unfold as they usually do will probably lead to a middle-of-the-road that really doesn’t position Canada for leadership in financial services innovation.

The main challenge facing proponents of open banking today is to identify and then proceed to implement the winning conditions that will be necessary to overcome regulatory and bureaucratic inertia.

Some of those winning conditions would include:

  • Developing a public engagement strategy in order to build the necessary bodyguard of support in key segments of society, including interest groups, elected officials and the general population;
  • Focusing on a limited number of key communications messages that would address the tangible benefits of open banking, as well as the opportunity costs of not proceeding down this path, to individuals and businesses; these messages would likely centre on control, choice, trust and security;
  • Taking advantage of the plethora of media opportunities that exist today to keep broadcasting out easily communicable messages and to respond to the no go/go slow squadrons that are now mobilizing.

 

Richard Remillard,

President, Remillard Consulting Group

NCFA Board Member

 


The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org


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Forbes | Michael del Castillo | Feb 4, 2019 It’s a balmy 80 degrees on a mid-December day in Singapore, and something is puzzling Allen Day, a 41-year-old data scientist. Using the tools he has developed at Google, he can see a mysterious concerted usage of artificial intelligence on the blockchain for Ethereum. Ether is the world’s third-largest cryptocurrency (after bitcoin and XRP), and it still sports a market cap of some $11 billion despite losing 83% of its value in 2018. Peering into its blockchain—the distributed database of transactions underpinning the cryptocurrency—Day detects a “whole bunch” of “autonomous agents” moving funds around “in an automated fashion.” While he doesn’t yet know who has created the AI, he suspects they could be the agents of cryptocurrency exchanges trading among themselves in order to artificially inflate ether’s price. “It’s not really just single agents doing things on their own,” Day says from Google’s Asia-Pacific headquarters. “They’re forming with other agents to have some larger group effect.” Day’s official title is senior developer advocate for Google Cloud, but he describes his role as “customer zero” for the company’s cloud computing efforts. As such it’s his job to anticipate demand before a product ...
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FINTECH FRIDAY$ (EP.22-Jan 25): Reducing Regulatory Burden by 25% in Ontario – Amar Nijjar of R2 Capital & Investments

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NCFA Canada | Jan 25, 2019

Ep22-Jan 25:  Reducing Regulatory Burden by 25% in Ontario

About this episode:  On this episode of the Fintech Friday's Podcast, our Manseeb Khan sits down with Amar Nijjar the CEO of R2 investments. They chat about how R2 is helping innovate the real estate space, the Ontario's Securities commission hitting their 25% burden reduction goal, and Canada becoming a force to be reckoned with. Enjoy!

  • The complexities of Canada's regulatory burdens are preventing us from becoming a global player
  • All innovative entrepreneurs in the fintech sector should be getting behind the burden reduction initiative
  • Commercial real estate is a good asset class and now open to regular investors

Host: Manseeb Khan, NCFA, Fintech Fridays show host

Guest: Amar Nijjar, President & CEO, R2 Capital and Investments

Bio: Amar is the Founder of R2 Capital and Investments - Canada’s First National Online Marketplace for direct investing into commercial properties. Under his leadership, R2 has to grown to 25 employees and in 2017 transacted on $207MM of Debt & Equity capital. R2 has funded several projects diversified by property type as well as location. Amar has funded over $10 billion and underwritten over $30 billion of real estate during his career. Prior to starting Amar was Practice Leader and Executive Vice President at JLL's (Jones Lang LaSalle), Debt Capital Markets group. R2 continues to add talent to it’s fast growing operations and is looking for leaders of tommorow. Amar holds an MBA from Schulick School of Business at York University and an undergraduate degree in chemical engineering.


Subscribe and tune in each Friday to check out the latest movers and shakers in fintech.

Listen to more Fintech Fridays podcasts: Season 1 | Season 2


Transcription of Interview

Intro: Welcome fintech Friday's a weekly podcast brought to you by the National Crowdfunding and Fintech Association of Canada and partners.Covering all things fintech block chain be AI and alternative finance.

Manseeb Khan:  Hey everybody Manseeb Khan here and thank you for tuning into another episode of Fintech Fridays. Just before we get started in this episode, I just want to do a little bit of housekeeping here. I just want to announce that we're super excited here at the NCFA to be launching the 5th Annual 2019 fintech financing Conference and Expo better known as FFCON19 which is going to be happening on April 3rd to 4th in Toronto Canada. FFCON19 is an immersive two-day conference and expo featuring high growth startups, emerging technologies, regulation, game changing projects, the latest trends, deal flow and investment opportunities. This year's theme is fearless with so much global risk in the air U.S. vs. China, Canada and China, Brexit, fintech industry adoption challenges, startup funding challenges, scaling issues FFCON19 is empowering companies with everything they need to build an amazing next generation business right here in Canada taking them global to show off to the world. We're launching it this week and registration and partnership opportunity will be opening up soon so stay tuned and get involved without any further ado here's Episode 22 of the FinTech FRIDAY podcast with Amar Nijjar the CEO and founder of our R2 investments. So, Amar could you just for the audience give us a little bit more of essentially what  R2 capital is since you are the CEO and the founder.

Amar Nijjar: Sure, R2 Capital is Canada's first online marketplace a technology-based platform that connects retail and institutional high net worth investors alike into private commercial real estate deals, income producing properties, shopping centers, plazas, medical office buildings, apartments, multifamily  housing as well as higher yielding development projects. You see a lot of construction cranes all around Canada. But especially in GTA a lot of action in Victoria Vancouver. Montreal is picking up right now, so we are in for a real estate guy. I used to work with Jones Lang LaSalle head of their debt capital markets group and before that I worked with some of the best in corporate finance. So, BMO, RBC and CIBC. And then we saw technology really disrupting how capital formation happens within the commercial real estate industry and we saw enormous gaps and that's what we're here to bridge to connect ordinary investors for small amounts to buy into large commercial properties or development projects for smaller.

Manseeb Khan: That's incredible. I think that's something a lot of people can definitely get excited about. Real estate is something that everybody, every entrepreneur wants to get into. So, this is incredible.

Amar Nijjar: Yeah that's right it's fixed income and steady returns it's predictable you know money is a little bit illiquid but that's the nature of the industry. You got to buy and hold. It's not like stocks and bonds and ETF where you can get in and out. Certainly, those investments have opportunity in the portfolio of any investor, but commercial real estate is more like fixed income other than illiquidity I think it's a very good asset class to invest in.

Manseeb Khan: Yeah, I can't agree with you more. So, on top of everything else that you're doing. You are actually sitting down on the regulatory burden reduction committee and helping out regulators like the Ontario Securities Commission hit their 25 percent burden reduction goal and challenge. Could you just explain that a little bit why is this goal important? What does this all mean and essentially the role of this?

Amar Nijjar: Yeah so myself along with a few other individuals’ entrepreneurs in the industry at NCFA national crowdfunding fintech association. There's been a steering committee for burden reduction formed at that end and I put my name in the hat and this selected me for that's just all a new initiative over at NCFA and so thank you for listening to this. I think it's very important for all the entrepreneurs in the industry because securities laws obviously that protect investors but entrepreneurship especially in the fintech space that a lot of gaps and small businesses, small entrepreneurs trying to have a vision to do something bold and sticking with Canada and not going to Singapore or U.S. or UK those economies have much better opportunities. And the regulatory framework is definitely a lot more flexible. We are laggards in Canada no doubt about that especially in Ontario. But what's really exciting right now is to the extent Ford government has really taken taking the bull by the horns, red tape reduction, burden reduction. This is exactly what we needed. So in twenty nineteen I think it's going to be an exciting year and then we're very excited we'll also see Ontario Securities Commission Chair Maureen Jenson come out with a circular notice to the industry internally and externally exclusively on burden reduction so we can talk a little bit about that too but it's a great time for entrepreneurs to get behind this because this may be sometimes a secondary party a for a lot of entrepreneurs. We're all busy hiding in that building our technology and building our businesses and hiring the best talent and keeping them and also renting the space and every little thing is you know. But you are only as good as a regulator would allow you to. So, there is absolutely no doubt in anybody's mind that should be that if they want to be in crypto, in online investments and online marketplaces technology-based sale of securities security tokens and block chain they need to get involved. They need to lobby, and they need to talk to the Minister of Finance. They need to talk to the securities regulator and get our collective voices heard because those entities are open to change and they're willing to listen. It's just we need to make an effort to make them understand what the gaps are.

Manseeb Khan: Yeah. Again, I can't agree with you more. It's important to me like you mentioned Canada's very laggard, Canada's traditionally very conservative when it comes to these kinds of changes and I mean its kind of makes sense why they want to make sure that what they're betting on it's actually right for investors. So, could you just talk a little bit more of before you. Before we touch back on what the minister and like what their new vision is. Could you just explain a little bit more of what the current regulatory framework looks like and what the key objectives are of said regulators.

Amar Nijjar: So, the current framework is extremely, extremely complicated. It is mind blowing a complicated you need a lot of legal advice which is extremely expensive and even then, the there is a disconnect between the legal industry and the law industry. The entrepreneurs what and how we are trying to build a business and the securities regulators expectations of the policy in the favorite set that are huge gaps are very wide right now and they need to be bridged. And where do we start. For example, let's talk about harmonization. So, in Canada like we have a dozen different countries, every province has their own mind on how to sell and regulate investments in securities Ontario Securities Commission is the most conservative and the biggest one at the same time too. Ontario has the most number of investors. B.C. has certainly got a role model in this regard and they've been consistently getting the best stores by CFIB. The Canadian Federation of Independent Business Small businesses out there. So, Ontario has been a laggard. It's good to see regulatory changes political changes coming. But there is so much more to be done harmonization for example that I'm talking about. Every province has their own mind in terms of how to regulate that. So online portals now are national and international in nature. There is no physical boundary, there's no paperwork. It's all digital. it's online. It's on the web. So, the gatekeeping of where an investor comes from and how they get into a deal, what amount they can invest in things of that nature get extremely complicated. So, it's like in Canada somebody is trying to run a national platform it's like you are trying to operate in like 12-15 different jurisdictions globally within the same country. So that is extremely painful for entrepreneurs.

Manseeb Khan: That yeah. Oh my God I can't even like you are explaining that it's very complicated. That's like for me a little bit of anxiety. Could you just. So, what do you see the biggest gaps being that you briefly touched on, but I guess to you what you see the biggest gaps being?

Amar Nijjar: So, for example in Ontario there is a so-called crowdfunding exemption which about three years ago was announced by the regulators and the government at the time to promote capital flow into small to midsize businesses the way investments get formalized and capital formation works. The  accredited investors and offering memorandum and some of those exemptions without getting into too much technicality essentially has a lot of burden and cost for a small and medium sized business to raise capital from the investment community. If they were to rely on some of those exemptions so they came up with this funding exemption. It doesn't work. It's been three years at least to the best of my knowledge nobody has been able to use crowdfunding exemption. It was supposed to be if you're trying to raise small amounts a million two million dollars it was supposed to make it easy for you as a business owner to tap into investment community a.k.a. crowdfunding to bring those investors into these deals without having to spend a fortune on the lawyers and the audited financial statements and a plethora of two paperwork. Ironically not one, not one. It's like blasphemous. Nobody's been able to use that exemption because the way it has been structured its just lip service. It does not work. For example, there's a marketing restriction. So, if you are running a small business and you want to raise a million bucks and you go to our portal or some of the other portals like a friend finder or a you know lending loop and some of these others. They cannot rely on this exemption in Ontario and advertise to the broader market on the Internet that we are raising. You are raising money to us through our portal to the investment community and investors can invest. There is an advertising and marketing restriction and yet on top of that there is an audited financial statement required even though you only get half a million dollars of capital. And anybody who is doing the audited financial statements knows that they can cost anywhere from twenty-five to fifty thousand dollars. So, you can imagine you're trying to raise half a million bucks and you're spending 25 to 50 thousand dollars on audited statements alone per year right. And then whatever is left you are this cost of capital raise is portal cost as well. The regulatory filings, the legal costs. I mean the model has  been put together in a way that it's completely doomed to fail from day one. And the proof is that nobody's used it. So, a lot of these things need to be rehashed and change and the industry together needs to verbalize and vocalize their pain points to make the change happen.

Manseeb Khan: How else is that impacting the industry especially to new entrepreneurs and small business in the fintech space aside from the crowdfunding.

Amar Nijjar: I mean there's a lot of excitement. People go to these conferences a lot of young people. There's tremendous amount of talent in Toronto and Ontario and Kitchener, Waterloo. I think we have a good university. We have a good work ethic. So, we have a we have a great talent pool and a lot of those millennials are interested in jumping into the entrepreneurship world. And it's very challenging. Access to capital is extremely challenging. The regulatory framework to set up your business and your company. The red tape that you have to go through is excruciatingly painful. But the worst is if you're in any business that can be perceived as in the business of selling investments or furtherance or trade you get regulated and now how you get regulated, how you get licensed and how you maintain that there's a tremendous amount of burden on smaller firms to get the answers in a timely fashion. It takes forever. There's no simplicity in the process. It's extremely complex and it can be very discouraging for a lot of small entrepreneurs. And we've seen a lot of companies either never really took off or they took off and they just failed. And there are numerous examples where in Ontario we were really pushing talent away or we are setting them up for failure because of the red tape and the burden is huge. It is hard as it is to start a business. You know the wages are very expensive the rents very expensive in Toronto and somebody is able to sustain the business organically. The regulation and the burden just to the complete killer. So, there is a huge long list of the tombstones and the graveyard of all these young entrepreneurs who wanted to start up something, but they just got caught up in all of this and that it was a failure.

Manseeb Khan: Yeah, I mean hopefully with these new regulatory changes and just hopefully  the excitement in the fintech space in and of itself hopefully allow these young entrepreneurs can kind of look past that and not like you like we mentioned before kind of go abroad and start businesses elsewhere like you mentioned in Singapore when may have you. You did briefly touch on the CFIB report. Do you have any comments based on the report that just came out?

Amar Nijjar: Yeah. So, I mean the people can Google that and read more about that. There was a financial Post article on that, but I think one of the most encouraging things are that we were consistently getting a C, C minus D rating for last several years I think over a decade. And finally, we jumped from C minus I believe last year to A minus. If my stats are right something like that. So, we made a significant jump but at least a direct result of the Ford government and you know Fideli's office trying to push down at the grassroots level to cut the red tape and reduce the burden. So, Ontario opened for business team. It's certainly going around. And what was personally very encouraging for me was that on January 14th only 10 days ago or so Ontario Securities Commission came out and they have set up an agenda, a task force to reduce the burden on smaller entrepreneurs like us by 25 percent. And this is directly the result of the governments that the government of Ontario is open for business action plan. So, I think we definitely need to give kudos to the government to helping us out. It does flow to the grassroots level now. It's too early to see how the results are and how it all pans out. But I think the first step. Ontario Securities Commission is asking the questions. Anybody interested in this they can just google burden reduction. Ontario Securities Commission staff noticed, and they should be able to see summary of that. But the regulator is starting to ask some of the key questions. For example, are there operational or procedural changes which would make our day to day life easier or less costly. Are there ways to get greater certainty regarding the regulatory requirements. Because we have oftentimes waited for over a year to get approval on something simple lasting bureaucracy. So, when we see this it's very encouraging. There are questions around their forms and filings that we and other market participants need to submit. That can be lessened. Are there other items that are unduly burdensome. So, all of this is very encouraging, and I really hope that our community will participate. They're asking for feedback, I think. Craig Asano at NCFA is doing a phenomenal job putting it all together. So, people should reach out to him and write to him and also make the comments available to Ontario Securities Commission Act. Comments@OSC.ON.CA. It's very for the industry lobby just together.

Manseeb Khan: Yeah. Hey, I got a shout out  Craig. I mean that guy cannot get champion enough. He's doing absolutely incredible things in the industry and I mean having amazing people like you and having people like Craig and just having so many incredible people in the industry advocating for change I think I really think it's just a matter of time because every single person in the fintech industry has a very great personal brand behind them and they have amazing audiences behind them so it's like hey where you guys are just shedding light on issues and topics and concerns. So, I think again I think it is a matter of time. Everything we happen.

Amar Nijjar: I think one of the things and what you're doing is also extremely helpful. You are part of this change. You are going to make this incrementally better for each of us and maybe exponentially better. And what you are doing is extremely important to get our voices heard. And you know in the Internet age of the blogs and podcasts I think the message goes fast and people appreciate that. But you know what. One of the guys that I think you should interview on your next one should be Grant Vingoe. He is vice chair OSC, Ontario securities commission. I've an opportunity to meet with them. Very, very nice individual and very professional. He understands the pain point and he has expressed enormous willingness to help the industry. So, I think they need to be on the podcast. There is another individual Naizam Kanji . He's director of the M&A and he is the special advisor to the chair on regulatory burden reduction. You should get Naizam Kanji on your show as well. And these things are extremely important to do.

Manseeb Khan: I just wrote that  while you're giving me the names, I was writing them down to lock them in for the next couple episodes, so we'll have like a little burden reduction regulatory a theme there. We mentioned the minister a little bit. Could you just be looping back? Could you explain what the guidance kind of looks like. What are you excited about? Would you not accept about? I mean there's definitely a lot of excitement behind this but there's probably a lot of concerns, could you voice a little bit more on that?

Amar Nijjar: Yeah, I mean look this is all positive. It is definitely extremely positive. So what Fideli's office, what Ford government's messaging open for business burden reduction all these good things that they're saying. What's encouraging is that it would appear that it's just not lip service that it's actually getting pushed down to the grassroots level through the government and associated bodies whether that's ministry of labor, Ontario Securities Commission, financial services commission of Ontario and many other layers of regulatory bodies out there. So, it's very encouraging step. And they've made a blanket statement 25 percent burden reduction. And I think that's extremely important to set. That's kind of a milestone because other than that it's just a bunch of words and it doesn't mean anything. So that feedback down to the different government bodies to take action is a bubbling through the industry. So, it's very encouraging to see that.

Manseeb Khan: Is there anything else that you're currently excited about. I mean being in the real estate space, being in the fintech space now , 2019 is a new year. I mean everybody has their one thing that they're excited about. Could you just for a second give us a little bit more insight of what you're really excited to see in 2019.

Amar Nijjar: Right. So, look you know perhaps I can talk about platforms like ours and I'm sure there are many others that in different industries the value that they're creating. So, what is R2 fundamentally do that's different than the public markets and other opportunities out there the public market the reach stock somebody can invest in a real can or some of these other equities out there it's public market risk. You get 4-5 percent distribution and then the real estate could be fine if the stock market takes a tumble. Your stock does too. The large real estate is in the hands of billions of dollars of pension fund managers, investment managers, institutional money managers, large family offices to them basically high net worth guys and girls. But the masses they're like an estate look around real estate is all around you. But how do you participate in that. How do you take a little investment off your holding into real estate? It was impossible because all of that is private. You can buy it you know if somebody has as rich dad, they can certainly put together to few million bucks and buy a property worth 8 million take a mortgage for five or six and put the 2 million is cash and have a nice 15 percent return over per year for the next three to four years right. But fundamentally the value we are creating groups like ours are creating in the industry that we are allowing investors to invest into those kinds of deals for small amounts. Ten thousand dollars, twenty-five thousand dollars and sometimes even smaller. So what we are doing is we're opening up a source of capital for property owners and developers who need that capital formation to be able to do more product yes to charge a fee but they're happy to share in the profits and the rental income and development profits and at the same time we are opening up investment opportunities for small investors to invest into property direct. So how are the regulators and the government allow us to work is going to fundamentally change lives of many people and that investment in wealth holdings right. The Wealth simples. You know what they have done allows small investors to go online in a fun exciting manner. But those groups like ours we are only as good as the regulator would allow us to. And the bandwidth is small. Right. Like our runway is small so if we either we get over the hump and we survive, or the burden takes over and it kills the business and then the innovation moves to other jurisdictions then we as Canadians we cannot afford to leave talent from Canada elsewhere.

Manseeb Khan: Yes, I can't agree with you more. I mean just talking to like CEOs that are building companies in Canada, build companies in Toronto. The talent pool in Canada is actually incredible something that a lot that a lot of Canadians if not maybe the world may overlook and just letting that die and letting about to just kind of go to waste that just would be such a shame. But I mean on the positive end are seeing a lot more last year especially this year a lot of international investments coming into Canada actually seeing hey wow Canada actually has some really talented people, very interesting very, smart people and they're building some very incredible. Let's be part of this. Let's try to grab a piece of this or let's try to build this to become the next Singapore or what may have you right?

Amar Nijjar: Hundred percent. Hundred percent. We are attracting talent from other jurisdictions. I think there's a lot more to be done there. We are certainly you know with just tons of talent here that we need to retain better. You know I think diversity is our strength. I think with all the backgrounds we have that that's driving entrepreneurship that comes along with a lot of immigrants. They come with the dream. And I think all of that makes Canada a unique place. So, our regulators and the government need to help us to bring some of the success stories outside of Canada and make a global success story. Canada's a small market and economies of scale are incredibly difficult to attain in Canada. But on top of that we have all this burden. So, unless we innovate and be flexible, we cannot create delays. Look at how many Canadian success stories are out there especially in the technology space compared to the stories coming out of China or India or USA obviously. Right. We are far behind, but we can do so much better.

Manseeb Khan: Yes. I can't agree with you more taking stories like yours taking stories like some of the past guess that we've had or just Canadian success stories and kind of projecting it into the global marketplace. I think that's just going to help us even more and let outside eyes kind of understand like what's kind of going on and hopefully help because Canada like you said is a very small market and it has such a potential to be such a power player. But as of yet like we're making steps but we're not there yet. Right.

Amar Nijjar: So, thank you for your time. I do have to run for a meeting unless there's any last.

Manseeb Khan: No, the last one would be what's the best way to contact you. Do we email we Snapchat you? For people to want to get into or to  R2 investments or just to talk to you directly and to understand a little

Amar Nijjar: My personal contact is best on LinkedIn which is Amar Nijjar and R2  without the D so if somebody linked in me that I am I'm more than happy to accept the invitation to engage with them. Our  Web site to learn more about how we are innovating in the spaces r2-re.com and re as in real estate.

Manseeb Khan: Awesome. So, Amar thank you so much for sitting down me today and yeah, I wish you all the best and we'd have you on our show again.

Amar Nijjar: Thank you.

Manseeb Khan: And yep that's it. That's the on the show on the behalf of Canada's leading national fintech crowdfunding association. I wish you an amazing FinTech Friday and weekend.

Outro : you've been listening to fintech Fridays brought to you by NCFA and partners. Tune in weekly for the latest fintech Friday podcast by subscribing to this channel. The National crowdfunding and FinTech Association of Canada is a non-profit actively engaged with social and investment fintech sectors around the globe and provide education research industry stewardship services and networking opportunities to thousands of members and subscribers. For more information please visit and see if a Canada dot org. Oh yea.

 

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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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FINTECH FRIDAY$ (EP.21-Jan 18): Meritocracy, Decentralized Innovation and the Power of Collaboration, CEO Next Decentrum, Hussein Hallak

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NCFA Canada | Jan 18, 2019

Ep21-Jan 18:  Meritocracy, Decentralized Innovation and the Power of Collaboration

About this episode:  On this episode NCFA Fintech Friday's host Manseeb Khan sits down with Hussein Hallak the CEO of NextDecentrum. They chat about AI in the education space, mentorship, and what decentralized innovation looks like to him. Enjoy !

  • Humans aren't perfect but we've managed to create online meritocracy through communities and value systems
  • A vision for global education and decentralized access to innovation and mentors
  • Top advice to startups and entrepreneurs launching new ventures (passion, idea, ability to add value)

Host: Manseeb Khan, NCFA, Fintech Fridays show host

Guest: Hussein Hallak, Co-founder and CEO, Next Decentrum

Bio: Hussein Hallak is the CEO and Founder of Next Decentrum, a blockchain education company. Evangelist at Launch Academy, one of North America’s leading tech incubators with over 600 tech startups incubated and over $150 Million raised. Serial entrepreneur and startup founder with over 25 years of business experience. Developed 20+ startups and mentored and trained thousands of entrepreneurs. Creator of Intro to Blockchain, The Blockchain Course, Blockchain Business Fundamentals, Make the LEAP, The Startup Course, and the Lean Entrepreneur Acceleration Program. Strategic advisor for several successfully funded tech and crypto startups including Fintrux, Interfinex, Traction Health, and Peace Geeks. Marketing advisor for leading conferences including Fintech & Funding, Traction Conf, CIX, and Van Funding. Graduate of the Oxford Blockchain Strategy Programme. BSc in Electronics Engineering. Featured in Forbes, BBC, Entrepreneur, Roundhouse Radio, and Notable. Passionate about tech, lean, startups, design thinking, impact, blockchain and decentralized innovation. I live to inspire entrepreneurship and unleash breakthrough innovation through connection, collaboration, and community.

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Transcription of Interview

Intro: Welcome fintech Friday's a weekly podcast brought to you by the National Crowdfunding and Fintech Association of Canada and partners.Covering all things fintech block chain be AI and alternative finance.

Manseeb Khan:  Hey everybody Manseeb Khan here and you are tuning in to Episode Twenty-one fintech Fridays. Today we have an absolutely incredible guest Hussein Hallak, Hussein to say thank you so much for sitting down with me today.

Hussein Hallak: Oh, my pleasure. I'm looking forward to it. Thank you for having me.

Manseeb Khan: Yeah. Know for sure. So just for the audience could you just give us a little bit more of. Tell us a little bit of yourself who you are and essentially what your company does.

Hussein Hallak: Yeah. So, I am the CEO of Next Decentrum. Next Decentrum is a company that builds a tool called the CXO.AI and the aim of this tool is to help Everybody learn from or everybody learn from everybody else. So, we believe, and I believe I grew up in and out of Syria Damascus. And there the biggest challenge was it's a country where there is not the same thing that we have here in Canada. where you don't have people mentoring you helping you. You really have only the education from the government and that's about it. So, I when I reached here in Vancouver five years ago to be probably in a couple of days it will be five years ago, I realized that everybody is into mentorship. Everybody is mentoring somebody else. Everybody has something that they want to contribute and give to somebody else. That was a big mind opener for me. And what I realized is everybody has something to teach and everybody had something to learn. Now I lived that for the past twelve years in Dubai but I was thinking that that's only me and the people around me but I realize now this is a mindset that a lot of successful people have, a lot of people around the world want to learn from those people instead of just reading books and instead of just attending courses there's a lot you can learn from someone that can guide you through the way. And this became very valuable when I spent over three months trying to learn how a Bitcoin transaction works. I'm an engineer but I studied engineering so it shouldn't be that hard, but the reason is I couldn't find the right material. So, a lot of mentorship is guiding people and getting them to find what they need really, really fast. So, I thought this is very powerful. Can we build a tool that help people teach through content curation? That is what we're building. That is what we're super excited about. And I think and I believe that it's going to change how people learn. It's going to be a great addition to how we learn right now. We're going to provide many people the ability to share their experience share what they're capable of doing to contribute and a lot of other people to learn from them. So that is what we're building. That is what I'm excited about and that is a little bit of my history I have a long history of building many startups. And this is what I do as an entrepreneur. All my life that's all I mean in building startup taking that idea from just an idea to a company.

Manseeb Khan: Yeah. No that's it's you do have a very incredibly extensive background in entrepreneurship and just not only just building amazing companies but also helping mentor like. It's not like thousands of entrepreneurs and giving and like you being their guiding light of like "Hey these are the mistakes I made as entrepreneur. These are the actually really rock-solid  advice that I have gotten saved my ass more time and time again. It's incredible that we have amazing people like you that are not only out their mentoring people but also creating a platform, an educational platform for everybody to kind of get more or less the same kind of mentorship or just that one tool one that you're offering for all looks for such amazing people.

Hussein Hallak: That's so kind of you. I realized by working and having a lot of people helped me to get to where I am, and I couldn't contribute back to them. So, the only way I could actually paid back to them is to pay it forward by helping other people and my condition to helping other people for them to help other people. I think that's how we build a community of interconnected people that are committed to each other that that creates prosperity and help people thrive. Everyone around  us .Like I was telling a friend of mine that this is he asked on me why do you do that?  And I said because it gives back to me it made me feel good, but he pressed me even more. And I think it's a matter of survival. When you grow up in a place where everybody brings you down and not intentionally but just being in a place where oppression is just the norm. You grew up kind of knowing that unless people around you are uplifted going after what fulfills them you cannot realize your own dreams. So, it's a matter of survival that you need to uplift other people and help them achieve greatness for you to achieve greatness. So that's why I do it. It's a very selfish approach of why I do it.

Manseeb Khan: Just building this new ecosystem of just entrepreneurs and just helping each other and just creating bridges. What is incredible because now you can go and ask other CEOs or other founders for help and for questions and everything because they've probably gone the exact same things you are, or they are probably haven't faced that problem yet. like Oh crap. I didn't even think about that OK. What are you doing? OK. That kind of makes sense. OK let's do that too.`

Hussein Hallak: Yeah. It's very it's very uplifting. Mentorship is probably the lifeblood of successful entrepreneurs. Your basic premise is you can't get there without a great team and a lot of supporters and people rooting for you. People helping you. Yeah so definitely an essential thing. I completely agree.

Manseeb Khan: I mean I like I don't want to give a shout out really quick to Craig. Craig is the CEO and the founder of the National fintech crowdfunding association. Just what I've learned from him. Just like an arm's distance or just via a text or just via weekly phone calls of seeing where we are like. I've already grown so much as a person. And I'm like Oh my God. I'm so excited to see how much more I can grow. So, like the mentorship thing really just and like meeting amazing people like yourself from the podcast. That is so incredible because I'm just like every day I feel like I'm like growing so much more like I'm 10xing  my growth because I'm talking to like OK cool like what are you doing this week. OK. This week we're on to talk about  AI education. I'm like OK cool. What does that? I don't know. Find out my boom Crash Course. Yeah, it's awesome. It's the best it's like one of the best feeling the world.

Hussein Hallak: Yeah. Shout out to Craig. He's probably one of the hardest working people I've met. Oh my God. I agree. Relentless. Yeah. I thought I was hard working when I worked with him on some of the conferences, we're putting together like Vanfunding at a FSCon. This guy pushes it to a completely different level. I thought my God. Oh, you pushed me definitely by seeing his work ethic and what he's working on. I definitely enjoy working with him. Sometimes I hate it because he pushes way too much. And yeah. Good to push beyond the limit and kind of experience a new a different horizon. Of where you can go with what you're doing. And it's that kind of people that I've met through him are awesome.

Manseeb Khan: Yeah, I mean it's always like testing out your boundaries and like figuring out how far can you take it like what's your threshold. Like and Craig is one of those incredible people that will really test like Oh you think he can go this far. You can actually know this much further. So, switching gears could you just explain to the audience a little bit more of why  AI education is important. Given all the things we're seeing in the media like all like hey like Skynet is going to take over everything like why education is such an important factor when it comes to A.I. and how do you see services and platforms like yourself helping people understand the  AI conversation a little bit better.

Hussein Hallak: Well for us. AI was born out of the need of achieving the end, but we have in mind. So, the end we have in mind is an education that works for you. You're not locked into a system that you have to adjust to it. So, the biggest challenge right now that we see at least in the education space is that you're locked into a way of how the educators see that you need to learn about a topic which makes sense. They are the expert. They are the leader on the topic or thought leader and they know they have a certain way of doing it. However. Think to take into consideration the diversity and how people learn the different styles of people learning the different pace. It's really hard to locking people into a certain way and that's why online learning had a big problem which is learning and people committing to the courses is only around 10 percent or 10 percent of people get to complete the courses they sign up to. So, they find out they paid and then they only 10 percent completion 10 to 20 percent at best which is a massive problem. We need people to learn we need people to gain new skills. We need people to have the ability to execute their work, so we thought what the best way is. What is a better way of doing it? And we thought  AI can help. And the way we're doing it is that helping AI adapt to people's habits to people ability to learn and to their pace. So, what we do is if you sign up to the courses that we're putting together our courses are curated so we believe there's a lot of content out there so engaging people and helping them to go out of their way instead of being locked into one person's way of explaining things. So, mentors that's what we believe their role is to kind of open up your eyes to the world and lead you to the best of everything. So, if you want to learn that they helped grow. Here are the best content articles, videos, books about growth. Here are the best articles growth articles, books, and videos on let's say how to manage your people and so on so forth. So, the mentorship course is about curation during the best that is out there. And it works according to your style. So, if you want to learn at a certain pace you kind of tell the system. This is the piece I want, and the system adapts to that. The system tracks and this is not broadly across the system, so we are trying to  to be very clear on. We don't take your data and study it and kind of study all the data that's out there and kind of forced you into this is what the A.I. telling you that this is the best you could. No, the A.I. locked in your pattern and learning adapts to how you are learning. So, are you clicking on these articles, are you liking the content of this style not this style?  So, it adapts to your way of learning and tried to suggest to you thing that matches your way of learning. So, learn you gives you that feedback and also taken into consideration what the mentor had set up so it's not taking from the whole internet because we think that doesn't really work. We just so it's a mentor guided A.I. driven. And to kind of adapt to how you learn and how you prefer the best and how you how you grow better. So that's how that's what we're building we're in the process. It's not an easy process which we have to be. We have a long way to go but they're an exciting place we see for this technology and for how it can make an impact in this sector which is education.

Manseeb Khan: Right. I mean I absolutely agree with you like there are so many different kinds of learning styles and just reading methods and like videos my work for some person. Blogs might work  another person some people aren't even like podcasts like what we're doing right now. It's actually quite incredible that you guys are creating an A.I. that understands hey Manseeb actually learns this way. Hussein actually learns This way. Okay cool. Let's just tailor it. They are probably learning the exact same thing. They're probably very much interested of like hey how do I become a better leader. I don't become a better mentor how do I become a better Team member as well. Okay Manseeb likes audio, Hussein likes video.

Hussein Hallak: Yeah well what we have right now due to the resources and what A.I. opens up the way we see it simply is that the way we have been set up is that you prepare everything at the start, and you adapt, you iterate. As much as you're capable to with AI we see ability to constant iteration, constant evolution based on how humans evolved. So, we evolve our way of thought. We evolve our view of the world. We I mean hopefully we continue to learn hopefully fingers crossed. Yeah. Because some people are locked into a certain way of the world and that that's all we are I acknowledge that but a lot of people they want to grow up they want to achieve. You're kind of forced out of your comfort zone and you have to explore new things and as you continue to learn and you take steps forward you change and you grow and you learn new things and you might change how you learn and how you consume information and what kind of information do you kind of desire. So, having the power of AI an adaptive learning kind of adapt to your growth at the speed of your growth that is where we think there is power here. There's a big opportunity and that's what we're involved right now in exploring and testing because we are very big believers in testing and learning from what they can learn.

Manseeb Khan: I love it. Yeah, I love it. There's a there's one of my favorite Gary Vaynerchuk  quotes is always like test and learn, test, and learn it's like you don't like this thing do something else. I love that. I'm glad that you guys are building something that can actually help. Just yeah just making education fun again.

Hussein Hallak: That's where we started. We studied with our interest in block chain right. I've spent a couple of years studying and learning more and what surprised me is how little people know and because people know little and because most of the information out there is kind of guided by technical knowledge written mainly for people who are interested in the space. It was harder and harder for people who are outside even people who are super smart to kind of get in and learn. And that drove them away and said well I'll wait until this thing becomes mainstream and because of the crypto aspect of it they hear all this news about the market up market down and the three is there is a convoluted the promise of block chain what can do and what it's doing right now. It's kind of I would say covered by all this cloud a lack of understanding, of false information or sometimes information that are contradicting. So, we thought that that's a great topic to start with because we believe in things like decentralized innovation is the way forward. We decentralize power. I mean we've seen the impact of decentralizing things. It can work for us for a while but it's about time that we kind of decentralized that so that we have less problems. We have more security, we have more contribution and people being able to participate from wherever they are in the world whatever they are in the let's say in the societies that they structure they don't participate and they can't and they can actually add value and they can matter and build together from wherever they are we need that. Such a state of the world that we live in right now.

Manseeb Khan: Yeah. Hundred percent. It's all it really. What are the core principles when it comes to block chain Just like all these amazing new technologies that are coming out especially in 2019 is that we're giving power back to the people? I mean I've mentioned this in the show before. I've had people come on the show they've also mentioned this. It's giving people the power back like your background of like coming from a place with oppression and just growing up and this kind of like cool like I'm very limited on what I can kind of do. And some people like we've mentioned like some people are. Sadly, they get beaten by that and they're kind of stuck the way they are. And they have a way out there's no options or what have you. But with this new wave of technology is new like the way that we're going to decentralize education and you can actually if you want, if you're interested in learning cryptocurrency these are resources out there that can teach you if you want to learn about mentorship, starting on business, how to file taxes, X,Y and Z whatever you want to learn it's out there because there's the Internet and the top of that. There's this new overarching technology that's going to make it that much more accessible and that much more tangible from you to actually like get out of whatever situation.

Hussein Hallak: Yeah absolutely. And it gives and it gives also rise. Every time we have a movement just like the block chain it’s kind of levels the playing field because for once all of the players that are already locking in the benefit of the Internet or so you're going to get it. You're going up against Amazon well to bad for you and Amazon owns all of the areas that they are they are in space. For example, Google. It's very very hard for entrepreneurs that are coming up right now because there were other being gobbled up by these big corporations hence that promise of new technology or new innovation is taken up by that entity and kind of disappeared that you wish if they don't want that they might take on the team and say hey you are smart people just focus on our thing and don't threaten our dominance in our space. And whereas now when you when you build communities especially when it has to do with crypto communities that they like bitcoin. It I threaten let's say PayPal for example just using that as an example. But let's say PayPal acquire Bitcoin. Bitcoin doesn't belong to anyone and things like that. The promise of that so that the community that helps Bitcoin grow is the community that maintains ownership and grows. And if you want to participate you can take part right now. Obviously the longer you wait the middle role you can play but you can continue. You can actually now become a developer of bitcoin if you want. You can participate in obviously because you're coming in late you have to prove yourself. You have to kind of like how it comes in society right. How we operate as people you're coming into a community you participate, you add value. You build up your personal brand slowly by contribution and that's for me closer to a meritocracy. Obviously, we're human beings. There is no perfect solution for life because that only happens with death. You can go into that kind of conversation but to the best of how human interaction and how we build communities and how we thrive together. This is the closest that I've seen so far to a community where it's all about your contribution and it's all about what you add as value and it doesn't matter where you come from, what's your name is because in those communities you're not even known if you want to. So, it all comes down to how much you add value if you add value and you play by the rules of that community. You're welcome. You're celebrated through your work and you have to continue to do that work. So, it's the closest I've seen to meritocracy ever and so on and so forth. If you don't like that community, you can build your own community or participate in another community. Very much about choice very much about what you contribute very much about or not about who you are where you come from and what your background is about what you can do right now for the media and I think that promise if it perpetuated across different industries different sectors can level the playing field for everyone and makes it really about what value do  you add rather than what you say and who you are and what your background is and how much money you have. All of these things become irrelevant and I think that that opens up the door for you and upcoming people to. It's really a marketplace of ideas and a marketplace of actual value.

Manseeb Khan: Yeah it really is like it's the amazing part is that no good deed goes unchecked. Really like if you are  bringing value to the community that you're in you are helping people you're answering questions like you just generally being a good person and helping and being of value, being of service to other people in your community. You're going to get rewarded for that. So, we did briefly touch on decentralized innovation right. What does the decentral innovation look like to you? And what are you most excited about. Like what is something that like oh when that happens, I can't wait till we get to that level.

Hussein Hallak: Well I'm excited about the ability to definitely public decentralized innovation and just like the Internet a public accessible to everyone network and that people participate without limitation. That is what I'm super excited about. I'm super excited about being able to solve real problems. That means I mean one of them is the ability to payment. A lot of people from our world that we live in right now the Western world. When I teach about a block chain. When I teach about bitcoin, I explained that that they here you don't see the value of that because you have multiple options. But even if you go to a city like Dubai who's known the fact of the Western world are being very modern and only a few years ago entrepreneurs could not build a company that accepts payment. Because the it's very expensive to set up a merchant account with a bank it's very limiting  and it's  highly expensive.  So, you cannot accept payment. So, imagine if you're building a startup that is online and you can't accept payment you can do it. You have so entrepreneurs really friends of mine who were originally from Canada had to travel back to have access to Stripe for example to be able to build their company. And that becomes very limiting. He was Canadian By and by origin so he could travel back but a lot of entrepreneurs there don't have any choice which actually limit the ability to build a great idea. And that's why decentralization in my world is connected definitely to innovation. It's a new way of doing things that enable all these ideas to pop up to be able to accept payment from anywhere in the world. And now truly you can build a startup that impact anywhere in the world even if you're in a place where you don't have accessibility to those resources that we have here. So, I think that's the biggest promise the biggest promise is to give access. I think the word access was probably the most dominant and the most important. If you give access people have the ability to innovate. People have the ability to add and contribute and up to up to now we had all kind of innovation happening at centers that circle cities where accessibility were resources. And now with the promise of decentralized innovation you can have really people who are sitting in a rural town whether it's the US and the state or here locally in the prairies in a very rural town where you have just internet access. you can now build a business and have access and contribute to someone who is living in Indonesia out of all places. They're just top of my head. You can be in a war-stricken country and as long as you have the access and you're able to be safe you can contribute, and you can change your situation. We can contribute with ideas because there's a lot of brilliant amazing people around the world that have the ability to contribute to. Have something that we need in the world maybe can contribute to solution in the other. So that's the first let's say promise access. The second promise is collaboration, true collaboration. Right now, collaboration only happens say on a big scale when certain people come together and are committed to a goal that they even if the goal that doesn't pay the money like Wikipedia. Most likely for a goal that gives them money and there they can take care of like a company which is a corporation like Facebook for example. But then you have a singular goal but would decentralize innovation. People can now contribute to multiple things and add value to multiple projects that actually solve real problems like the problem of climate change for example like the problem of let's say war or having people for example for humanitarian crisis. So, things like that people can participate and can participate in solving it and can  be the solution. While it may not be possible a certain area or by a singular body like a corporation it can be possible by many different people participating from around the world and creating a community that connected and working together. That way. So, I think active collaboration and the final word innovation is bringing something or creating something together that. Can never or could never be perceived before or thought is possible that adds value. And I think that is where innovation happens. So, these are these three promises that I think is central organization can bring. And that's why we're super excited about it.

Manseeb Khan: Access I love that I like that that makes so much sense because you have. All of these old gatekeepers that are still sadly in power and you're having decentralized innovation you're giving access to all these people that you've mentioned. But don't have access to information, don't have the tools to actually build a business because hey the next Facebook could be built out of Like Mauritius for all we know right. The next biggest thing could be built out of who knows where. So, what are some of your core principles you have when it comes to building new ventures?

Hussein Hallak: Well I thank you very much for the question I think for me. Building a company is very similar to climbing a mountain and in particular I related to climbing Mount Everest. I haven't done it. I may do it even though I'm lazy. I kind of related to climb Mount Everest. And if you think about it climbing Mount Everest doesn't make any human sense at all. Like why you would climb that mountain.

Manseeb Khan: There's no sense. Why would you do that so crazy.

Hussein Hallak:  It's really a desire not only that if you don't have it all starts with passion. A passion for something a thought  or an idea. So those people who end up climbing the mountain are driven by a passion to experience what it's like to be at the summit. Now whatever the source of that passion. Nobody cares but it's your passion you know it. So, most entrepreneurs unless you're extremely passionate about the end  result that you're after never ever go after something because the reason things are climbing a mountain is freaking hard. It's the hardest thing you can ever do. And even if you're in the right fit body to do that it's still as hard neared the summit. So even if you get an easy start that you have the money you have the time you have the energy it gets hard at the top. There is something in the climb over Everest called the Death Zone which is above 26000 feet and above that it is closer to the summit and there because of the thin air no matter how fit you are, going to suffer it's going to be super slow it's going to take you forever to get there and fit or not you're going to suffer so unless you have a passion for that you're not going to go through the suffering. So, number one I tell them first of all you need a lot of passion tons of it because it's going to be hard. And so that's the other thing that they need to know what they're getting themselves into. Most people think my idea is going to be the best. And so, I'm going to have a joy ride. It's going to be I'm going to be difficult. There's going to be smooth sailing. I have the money, I have the time, I have the skill set. It's going to be hard regardless of what you have. So, knowing that it's hard having a passion for starting point. The second thing is you need to have a central guiding idea which is adding value to customers. Bottom line if you want to win you have to add value to customers and you have to add it in a way that  no other competitor and no one in the market can ever do. And unless you do that there's absolutely zero chance that you're going to succeed at a big scale. You may succeed to build like a small business but unless you add immense value. So, at the center you have to focus on customers, and you can't. It sounds like a very stupid idea of course people will sign up to that. And of course, they say of course what else. Why are some building. But when you started doing it. Most people get busy focused on how great the product is, adding more features you know ,building the elements and building a business and forget about why they did it in the first place which is to add value to customers and if they have that that's the principle guiding every step. They're more likely to succeed. And underneath that comes a lot of things like you need a lot of customers to build a great big business. So, you need a big size market. You need to talk to customers to know what they want. And that goes into interviewing customers and staying connected. And you need to test your product according to what customers want. Not because you think these features and benefits are great. Who cares what you think it's what the customers think? So again, there is the last thing I think is being humble as an entrepreneur. I don't mean humble as not being flamboyant and not being like you know talking the big game or humble meaning that's your opinion and what you think doesn't matter it's what the market thinks and what customers want and what customers need. And as long as you're humble and it's not about you it's about them and about the value that you add you're likely to succeed. So, passion Customers and being humble. Basically yeah. These are these are core principles that If you follow, you're likely to build a successful business. That's the last thing that I teach entrepreneurs. You can have all of that. And you may still fail. It's there is an element of luck and an element of timing of when you push idea there. So, there is no guarantee. And unless you're entering like you can climb Mount Everest and you may never reach. You have to climb it again. And you have to do it again. And that's why you have to have of passion. So, it's not about just the success it's about playing the game.

Manseeb Khan: Yeah. No. I love it. So, to wrap this up I'm going to end it off with two questions. So, having trained and mentored all these entrepreneurs what your tried and true advice to these entrepreneurs has been and how do these entrepreneurs find mentors? like how we find amazing people like you and how do we find like actual mentors that can actually help us and make us as incredible as people think we are.

Hussein Hallak: Thank you for that. Yeah. So, I think  core advice is get started now. And whatever you do get shit done in the sense that stop talking about it. Stop thinking about it and do something doing something. It's like kind of ready fire aim or fire. First and then get ready and then aim and then fire again. The key thing here is when you do something you have something that exists in the world. Even if you're doing is you creating a plan and writing it not in your head. But writing it because now that it exists you can evaluate, it you can analyze it, you can learn from it and you can that guide you to the next action. So, whatever you do move from one action to the other. Guided by testing, guided by data, guided by examination which is what the main start up  promise is that have your ideas do something. Build an MVP. Do something whatever it is. Then examine the data so build measure and then learn then from the data and then make informed action. So, this is my always advice to the entrepreneurs whoever sits with me. The fundamental line is what have you done. What have you learned from it? What is the next thing you're going to do? And if you engage in asking yourself those questions. This one game will keep you going. Now that you're going. Now that you've got going. To be second piece of advice is always taking these 10000 stages view every once in a while. So, take a step to step back and say I might head in the right direction. Is this getting me to my vision or what I want to create? Is this heading in a direction that serves the business that actually generates value? Every once in a while, engage in that and step out of your cocoon and out of the daily grind of action to make sure you're heading in the right direction. So, these are two pieces of advice that saved my life, save me a lot of time, and save the money my entrepreneurs that I work with all the time and kind of simplify the process. Obviously, the process of doing is intense. It's complex depending what you're building depending on the solutions you're building but these kind of simple advices and simple practices help people to stay on track and keep going. And don't get stopped by taking time to think and not do anything. Now in regards to finding a great mentor you have to first find out who a mentor and so I mean there is not a coach, a mentor is not an adviser and I've actually written on that so they can actually find my LinkedIn and find a little bit I've written about what makes a good mentor a good mentor. But the key thing is a mentor someone who's willing. First of all, they are skilled at what you want to mentor you on. So, they have to have the skill. You can go to someone who is mentor you for example on growth. Like I would suck in mentoring someone on how growth companies as they move from 5 million-dollar companies to 100 million-dollar companies. I've never done it. I have I don't have the skill set to do that. So, I mean I'm a bad mentor for that so. So even though they like me a lot of people pick mentors that they like and look up to which is fine but make sure they have the skillset on what you want them to mentor you on. So that's a key element because a mentor is someone who gives you access in a particular area defined niche area. They have mentors on strategy. You don't have a mentor. Overall you have a mentor on strategy mentor, on growth mentoring for example how you hire. So, pick the mentor that can give you the skill set. The other thing as a mentor is someone who is willing to do it for free. A mentor is not someone you pay if you pay them. They're either a consultant or a coach.  A mentor or someone but you don't pay for that. There’re no paid mentors. That's at least mind where I come from. You pay a coach, you pay somebody else but a mentor or someone and they are committed to your success. The reason why they're into it be because they are committed to your success. They would be happy if you exceed them and outgrow them and achieve better results than they ever even achieve. So, they're happy to do that. So, they need to have that desire so that they don't hold you back. Some people would actually not want to see other people succeed more than they do, and they are successful they've achieved success in the area of their skilled at. And finally, I would say it's someone that you connect with that you like. I don't believe in working with people that you don't like somebody you can’t be mentored by somebody you don't like. So even if they are a big name in the place if you don't like them if you don't connect with them, you're not going to learn from them. So, I believe life is too short to work with people you don't like. So, I highly recommend that you work with people that you like people who are committed to your success. People who want to see you  have the skill set and have achieved success in that area. Think that would constitute a great mentor. There are tons of  brilliant entrepreneurs especially we're lucky to be here in Canada. Ton of brilliant entrepreneurs, the biggest entrepreneur in your in your sector. They would be thrilled if you reach out to them and ask them for 30 minutes of their time. And final note. A mentor is not someone who is committed to you for life because they may be maybe all he needs is that half hour coffee, but they guide you to something and then you go on to work and that's all you needed. So, they give you kind of an access or a they open a door for you or open your eyes on something and maybe some mentors you need them for longer so don't pick on someone that's complimentary for life because they will. They don't probably have the time that they are successful. So, look at them and ask them for advice and ask them for more mentorship. Just ask them what you want. And they would want to help you we're lucky to be here.

Manseeb Khan: That's true. I mean speaking of which I got to have some are calling for some refunds I don't know. I can't pay mentors. Hussein thank you so much for sitting down with me today. I mean this has been an absolute pleasure.  I think open up a lot of people's eyes when it comes to mentorship and just when it comes to leading and mentoring and essentially why it's so important. So again, thank you so much for your time. This was a pleasure I can't wait to have you back.

Hussein Hallak: Thank you for having me. I had a blast. So great. Keep up the great work.

Manseeb Khan: Oh, I will. I will meet amazing people like you. I mean cheering me on I mean of course. And on the behalf of the NCFA Canada's leading fintech and crowdfunding association I wish you amazing Fintech Friday and weekend.

Outro : you've been listening to fintech Fridays brought to you by NCFA and partners. Tune in weekly for the latest fintech Friday podcast by subscribing to this channel. The National crowdfunding and FinTech Association of Canada is a non-profit actively engaged with social and investment fintech sectors around the globe and provide education research industry stewardship services and networking opportunities to thousands of members and subscribers. For more information please visit and see if a Canada dot org. Oh yea.

 

End of Podcast

 

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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

CNBC | Hugh Son | Feb 14, 2019 The first cryptocurrency created by a major U.S. bank is here — and it's from J.P. Morgan Chase. Engineers at the lender have created the "JPM Coin," a digital token that will be used to instantly settle transactions between clients of its wholesale payments business. Only a tiny fraction of payments will initially be transmitted using the cryptocurrency, but the trial represents the first real-world use of a digital coin by a major U.S. bank. While J.P. Morgan's Jamie Dimon has bashed bitcoin as a "fraud," the bank chief and his managers have consistently said blockchain and regulated digital currencies held promise. The lender moves more than $6 trillion around the world every day for corporations in its massive wholesale payments business. In trials set to start in a few months, a tiny fraction of that will happen over something called "JPM Coin," the digital token created by engineers at the New York-based bank to instantly settle payments between clients. See:  Do Banks Even Want to Go Blockchain? J.P. Morgan is preparing for a future in which parts of the essential underpinning of global capitalism, from cross-border payments to corporate debt issuance, ...
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5 Missing Necessities to Move Blockchain from 0.2% Global Penetration to the Remaining 99.8%

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TODA Network | Toufi Saliba | Jan 9, 2018

Despite the skeptics, those that have noticed the hype surrounding current blockchains have in fact only seen less than 0.2% global penetration. If that is a revolution - it's a failure. However, what's yet to come is what will get this technology to the remaining 99.8%; and that will not be ledger-based - but will still be a blockchain at the network level that will be unstoppable. No government, no agency, no company, in fact, nothing can stop it. Think of a Tsunami that has already started - can't stop it.

Decentralized Governance is a Security Model

True decentralization cannot be stopped by any central power, however, in order to take off, decentralization must be self-regulated, a living example of that, Bitcoin for 10 years now, owns itself, defends itself and continues to evolve by incentivizing people around it with the only language they both speak: the money language.

Nature has it, what occurs during the exchange of oxygen with carbon dioxide in your lungs, which uses a decentralized protocol called the Alveolus Capillary Protocol. It is doing billions of exchanges per second in your lungs as you read this, without interference from your brain on its functioning. No matter how powerful your brain is, it can neither stop it nor interfere with it. In fact, the more effective it is the more powerful your brain is and vice versa. Think of the brain here as the government. A government that wants to be effective at servicing people must let decentralized governance take over without a centralized point, aka a weak point that could be attacked from within. Governments who care about the people would care to ensure they are operating with the least friction and most efficacy as they exchange value between each other and even between them and their government, for things such as health records, money, real estate or other value-based digital assets.

See:  Humans on the Blockchain: Why Crypto Is the Best Defense Against AI Overlords

There are five technical necessities that are still missing or incomplete. They must be achieved for blockchain to get to the remaining 99.8%, these are:

  1. Security: Decentralized governance is actually a security model to prevent an attack from within. Security without decentralization can be achieved using traditional databases that are fairly secure from outside attack and have been around for decades, but that won't help because they don't prevent an attack from within. Decentralization must be equal to the number of actual users, in fact, every user must be the node participating in the global consensus. (Yes it can be done)
  2. Efficiency: your users/customers will not use a system that is not efficient - at least not for long. The cost of any system must make relative sense to what we are using it for. You would not purchase a two dollar coffee using a system with a transaction cost that is higher than that. We aren't talking about fees, don’t let that fool you into believing that this is the overall cost. Current blockchains don't reflect the true cost. In fact the cost is hidden from the user by adding a tiny layer of fees, but effectively it takes the cost from the users.
  3. Confidentiality: A public ledger that is replicated is generally not confidential. An open and public system will go mainstream but not a ledger. Perhaps a hash of the block is all you need especially if it can be built in a way that all users no exception can contribute but hey don't have to. Think of some replication but not full replication.
  4. Scalability: This is one of the most publicized problems, in order for any system to achieve mass adoption - it must scale. (Not by reducing any of the points above. In fact we expect the deterministic distributed computing to achieve such a result.
  5. Interoperability: Over 50 projects claim that they have figured this out by building decentralized exchanges that must be relied upon. For P2P interoperability, it is necessary not to have anyone in the middle because they can impact any, if not all of the 4 previous necessities and collapse the system on itself. In security, there is a saying: "you are as good as your weakest link" and by having decentralized exchanges to depend on, they at best become one of the weakest links if not the absolute weakest

What’s Holding Humanity Back?

The most popular blockchains intended to achieve this, however, an exploitation of the Bitcoin protocol that started almost 7 years ago, precisely on Hashcash, the core component of PoW got us to the point where only certain classes of machines can be miners. The incentives of those machines diverged from the incentive of users and contributed largely to the regressive evolution of this revolutionary technology at its infancy stage.

Leakage of Value

This leakage of value is a major cost to everyone, despite the fact that people claim that the current Ethereum implementation is free for people to use. The majority actually think that the cost is what they pay in fees using the Ethereum Gas model, in fact, the fees are low when compared to the overall cost of mining that leaks out from users into a different class called miners. Those miners in Ethereum alone extracted directly over $3.4B from the community YTD which led to the collapse of the ETH price as supply outpaced demand. Some criticize Ethereum to be a Ponzi scheme because of that, while we reserve no judgment; instead, we work with many on a solution that will return this technology to its original promises and make it more disruptive than anyone thought before.

See:  Cybersecurity, Blockchain And The Industrial Internet Of Things

The remaining 99.8% of the people on this planet will all be on chain one way or another, but definitely not on a ledger based chain. This can truly be the next biggest revolutionary technology the world has yet to witness.

Solving By Design

There are over 5000 people working on these issues globally - so why has the situation not advanced? Because most researchers are not liberated, in fact, they are constrained but often find it hard to admit to.

Mass adoption can only be achieved if these issues are solved by design. This means that the blockchain in question must have all 5 of the key elements described - not 3, not even 4 is enough. Without these necessities, entities using the technology cannot succeed, but having them also does not guarantee success.

From the Bottom Up

To achieve these necessities, blockchain needs the right foundation. TCP/IP is the current foundation (protocol) that allows the internet to exist and enables packets of data to be transmitted. However, these packets cannot effectively hold nor transmit value: the ownership of your home, for example.

Why does this matter? This matters because without solving these problems, we would not even want to strive for mass adoption. A system that does not offer security, efficiency, confidentiality, scalability and interoperability (in that order of importance) all must be met or else, what we have to show will never be revolutionary.

Toufi Saliba is the CEO of Toda.Network. Toda.Network launched in 2018 to enable projects to deliver on the promises of Blockchain. The company has formed and continues to form and onboard alliances, startups and joint ventures which are building on the Toda.Network. The TODA Protocol is a network protocol, a modification of TCP/IP, (not replacing it/ that enables value transmission over the packet layer and below the operating system in a fully decentralized setting, without reliance on a ledger. Learn more: Toda.Network.


The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org


CNBC | Hugh Son | Feb 14, 2019 The first cryptocurrency created by a major U.S. bank is here — and it's from J.P. Morgan Chase. Engineers at the lender have created the "JPM Coin," a digital token that will be used to instantly settle transactions between clients of its wholesale payments business. Only a tiny fraction of payments will initially be transmitted using the cryptocurrency, but the trial represents the first real-world use of a digital coin by a major U.S. bank. While J.P. Morgan's Jamie Dimon has bashed bitcoin as a "fraud," the bank chief and his managers have consistently said blockchain and regulated digital currencies held promise. The lender moves more than $6 trillion around the world every day for corporations in its massive wholesale payments business. In trials set to start in a few months, a tiny fraction of that will happen over something called "JPM Coin," the digital token created by engineers at the New York-based bank to instantly settle payments between clients. See:  Do Banks Even Want to Go Blockchain? J.P. Morgan is preparing for a future in which parts of the essential underpinning of global capitalism, from cross-border payments to corporate debt issuance, ...
Read More
JP Morgan is rolling out the first US bank-backed cryptocurrency to transform payments business
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Modern Consensus | Leo Jakobson, February 4, 2019 Move is latest series of steps by regulator to bring clarity and less confrontational approach to regulations enforcement The U.S. Securities and Exchange Commission wants to know if the technology to help it monitor major cryptocurrency blockchains for risk and regulatory compliance issues exists. The SEC is not looking to buy big data analytics tools at this time, but characterizes its interest as “conducting market research to determine the availability and technical capability,” of the tools presently available on the market, it announced in a notice on Jan. 31 What the SEC wants to know about is the “ability to provide the requested data but also an overview of the processes used to extract the data, convert the data into a reviewable format, and the verification steps to ensure there is no loss in data completeness and accuracy due to the data transformation tools and processes applied.” The software it wants would also make the data easy for SEC staff to read and understand on an ongoing basis, and would provide insights about that data—notably identifying who the data belongs to—as well as a way of ensuring the data is accurate and ...
Read More
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NCFA Canada | Feb 8, 2019 Ep24-Feb 8:  Re-imagining Philanthropy with Daryl Hatton About this episode:  On this Episode of the Fintech Friday's Podcast, our host Manseeb Khan sits down with Daryl Hatton the CEO of Connection Point. They chatted about microprojects, saving little girls and puppies and how to get hooked on Philanthropy. Enjoy! Focus on value and avoid the complicated terminology when growing new innovative markets Branding customer segment-focused funding products, white labeling collaborative uses cases Crowdfunding for good at the intersection of technology, people and impact Host: Manseeb Khan, NCFA, Fintech Fridays show host Guest: DARYL HATTON, Founder and CEO, ConnectionPoint / FundRazr (linkedin) BIO:  Daryl Hatton, CEO of award winning international crowdfunding company FundRazr and of the innovative sponsored crowdfunding company Sponsifi has founded multiple start-ups and helped bring one to a successful NASDAQ IPO in 1999. He actively serves as board member or advisor to handfuls of other hot companies in Canada. In addition, he is a Director and Crowdfunding Ambassador for the National Crowdfunding Association of Canada. As a social media guy and frequent public speaker, his Twitter tagline includes words like “#KingOfGastown, entrepreneur, cardiac survivor, foodie, whisky nut, philosopher, mentor, father and friend.” * Senior Business and Technology ...
Read More
FINTECH FRIDAY$ (EP24-Feb 8):  Re-imagining Philanthropy with Daryl Hatton, Founder and CEO of ConnectionPoint/FundRazr
Forbes | Michael del Castillo | Feb 4, 2019 It’s a balmy 80 degrees on a mid-December day in Singapore, and something is puzzling Allen Day, a 41-year-old data scientist. Using the tools he has developed at Google, he can see a mysterious concerted usage of artificial intelligence on the blockchain for Ethereum. Ether is the world’s third-largest cryptocurrency (after bitcoin and XRP), and it still sports a market cap of some $11 billion despite losing 83% of its value in 2018. Peering into its blockchain—the distributed database of transactions underpinning the cryptocurrency—Day detects a “whole bunch” of “autonomous agents” moving funds around “in an automated fashion.” While he doesn’t yet know who has created the AI, he suspects they could be the agents of cryptocurrency exchanges trading among themselves in order to artificially inflate ether’s price. “It’s not really just single agents doing things on their own,” Day says from Google’s Asia-Pacific headquarters. “They’re forming with other agents to have some larger group effect.” Day’s official title is senior developer advocate for Google Cloud, but he describes his role as “customer zero” for the company’s cloud computing efforts. As such it’s his job to anticipate demand before a product ...
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When the Tide Goes Out: Big Questions for Crypto in 2019

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CoindeskGary Gensler | Dec 17, 2018

Gary Gensler is a former chairman of the Commodity Futures Trading Commission under President Barack Obama, a Senior advisor to the MIT Media Lab Digital Currency Initiative and Senior Lecturer at the MIT Sloan School of Management, where he currently teaches several classes on blockchain technology and crypto finance.

After this year’s wild market ride and so many failed projects, what might Satoshi Nakamoto’s innovative “Bitcoin: A Peer-to-Peer Electronic Cash System” mean for money and finance in 2019 and beyond?

Satoshi’s innovation – the use of append-only timestamped logs, secured by cryptography, amongst multiple parties, forming consensus on a shared ledger – needs to be taken seriously. The resulting blockchains of data can form widely verifiable peer-to-peer databases.

For any chance of a lasting role in the long evolution of money, though, blockchain applications and crypto assets have to deliver real economic results for users. And while bringing the crypto finance markets within public policy norms is critical, the greatest challenge remains the seriousness of commercial use cases.

A bunch of hype masquerading as fact won’t do it.

What We’ve Learned

Blockchain technology and crypto tokens provide an alternative means to move value on the Internet without relying upon a central intermediary. They promise the potential to lower verification and networking costs, ranging from censorship, privacy, reconciliation and settlement costs to the costs of jump starting and maintaining a network.

These features tie blockchain technology and cryptocurrencies directly to the essential plumbing of the financial sector, which at its core has the role of efficiently moving, allocating and pricing money and risk within an economy. It could lower costs, risks and economic rents in the financial system, which represents 7.5 percent of U.S. GDP.

See:  Experts predict the five big fintech trends of 2019

To do so, though, blockchain technology must address its many technical and commercial challenges – scalability, efficiency, privacy, security, interoperability and governance. Industry reforms and regulations also must bring order to the markets surrounding this technology, especially for crypto exchanges and initial coin offerings.

In the meantime, the financial sector is mainly exploring private blockchain applications – without native tokens – built on software such as Hyperledger FabricR3 Corda or Quorum.

Any use case’s value proposition needs to be rigorously compared with simply using a traditional data base. In particular, any token offering must address how it will sustainably lower verification or networking costs – how such crypto asset benefits users more than simply using broadly accepted fiat currencies. While money is but a social construct, its history tells us that there are overwhelming network benefits when a currency is widely used and accepted for all three roles of money – as a unit of account, medium of exchange and store of value.

In essence, how might any blockchain technology project or any initial coin offering’s (‘ICO’) proposed token be more than simply a means to raise cheap money from the public? In 2019 and beyond, venture capitalists, large incumbents and crypto investors will likely be more discerning and rigorous in their investments and projects.

Public Policy Frameworks

The crypto finance markets can only gain public confidence and reach their potential by coming within long-established public policy frameworks. As with any other technology, we must guard against illicit activities, such as tax evasion, money laundering, terrorist financing and avoiding sanctions.

We must promote fair and open competition while ensuring for financial stability. We must protect investors and consumers.

While criminals have often exploited the existing financial system for money laundering, cryptocurrencies have given bad actors new ways to conduct old crimes. Dark markets conduct sales of illegal drugs and other contraband using cryptocurrencies. State actors, such as Venezuela, Russia, and Iran have used crypto finance to undermine U.S. policies. Additionally, cryptocurrencies add new challenges to global tax compliance.

What investor protection does exist in crypto markets seems little more than an effort to stay ahead of law enforcement’s and regulators’ attention.

Crypto Exchanges

Most crypto exchanges are unregistered. Manipulative behavior goes unchecked and billions of dollars in customers’ tokens have been stolen. Compared to traditional financial exchanges, they lack intermediation through regulated broker-dealers. Further, according to CryptoCompare’s October Exchange Review, only 47 percent of exchanges impose strict know-your-customer (‘KYC’) requirements.

See:  Crypto Bear Market Gives UK Regulators Breathing Space to Finalize Crypto Regulation

Safeguards to date – treating crypto exchanges and digital wallet providers through money transmission laws in the same manner as Western Union or MoneyGram – are unsatisfactory.

Crypto exchanges are trading venues and need be treated as such, with mandated investor protections in place. Front running and other manipulative behavior needs to be banned. Exchanges need to fully comply with anti-money laundering laws and seriously fix or consider spinning off their custodial functions.

In 2019 and beyond, we will see multiple exchanges register in the U.S. – those trading ICO tokens will register as broker-dealers under Regulation ATS and Intercontinental Exchange’s new Bakkt exchangewill register and operate under the Commodities Exchange Act.

We’re also likely to see declining operating margins and consolidation in the more than 200 crypto exchanges.

Initial Coin Offerings

Of the thousands of ICOs to date, many have failed, and investors have lost billions. A recent EY studyreported that through the third quarter of 2018, 86 percent of the top ICOs of 2017 were trading below their listing price and only 13 percent actually have a working product.

Filecoin, for instance, raised over $250 million in October 2017 but is not due to go live until mid-2019. Academic and market studies also have found the ICO market rife with scams and frauds.

Debates have raged around the globe about how cryptocurrencies, and particularly ICOs, fit within existing securities, commodities and derivatives laws. Many contend that so-called ‘utility tokens’ sold for future consumption are not investment contracts – but this is a false distinction.

See:  New eToro Survey Reveals Strong Interest in Cryptoasset Education, Despite Market Downturn

By their very design, ICOs mix economic attributes of both consumption and investment. ICO tokens’ realities – their risks, expectation of profits, reliance on the efforts of others, manner of marketing, exchange trading, limited supply, and capital formation — are attributes of investment offerings.

In the U.S., nearly all ICOs would meet the Supreme Court’s ‘Howey Test’ defining an investment contract under securities laws. As poet James Whitcomb Riley wrote over 100 years ago: “When I see a bird that walks like a duck and swims like a duck and quacks like a duck, I call that bird a duck.”

In 2019, we’re likely to continue seeing high ICO failure rates while funding totals decline. Regulators and the courts will bring added clarity to the market through increased numbers of enforcement cases and related private litigation.

Central Banks

Central banks are studying blockchain technology and crypto markets with one eye on financial stability and another eye on what it means for the fiat currencies they issue and oversee.

Canada’s project Jasper and Singapore’s project Ubin are exploring use of permissioned blockchain applications to update payment systems.

See:  IMF: Nations Need to Consider a Central Bank Backed Cryptocurrency

While the policy challenges are significant, some Central Banks also are considering giving the public access to central bank payment systems and digital reserves through so-called ‘central bank digital currency’ (CBDC). Two countries’ review – one strong and one in distress – are noteworthy. In Sweden, use of paper-based Krona has declined and the Riksbank, the world’s oldest central bank, is pursuing an e-Krona project to provide electronic central bank money directly to the public.

Venezuela, facing hyperinflation, economic instability, and sanctions is promoting public use of a purportedly oil-backed token, Petro, though there are reports that seriously question the token’s legitimacy.

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