In this episode of The Venture, we talk with Brian Clark, chief product officer of Ascend Bit, a Bangkok start-up recently spun off from the Ascend Group, which is itself a part of Thailand’s C.P. Group. With a mandate to leverage blockchain solutions on behalf of the group, Clark is focusing on productizing loyalty and gamification, including tokenizing nontraditional assets for consumers. In speaking with McKinsey’s Andrew Roth, he discusses the challenges and promise of blockchain, smart contracts, and Web3, including how new tech solutions can help brands create more authentic communities based on shared value and enjoyable experiences. At the close of the interview, McKinsey’s Dilip Mistry weighs in with additional insights as well as advice for incumbents looking to move forward with Web3.
An edited transcript of the podcast follows. For more conversations on venture building, subscribe to the series on Apple Podcasts or Spotify.
Andrew Roth: From Leap by McKinsey, our business-building practice, I’m Andrew Roth, and welcome to The Venture, a series featuring conversations with legendary venture builders about how to design, launch, and scale new businesses. In each episode, we cut through the noise to bring practical advice on how leaders can build successful businesses from scratch.
In this episode, we share a conversation with Brian Clark, chief product officer of Ascend Bit, a Bangkok start-up recently spun off from the Ascend Group, itself a part of Thailand’s C.P. Group. Ascend Bit’s mandate is to leverage blockchain solutions on behalf of the group, focusing on applications for businesses and tokenization for consumers. Current efforts focus on productizing loyalty and gamification, with an emphasis on tokenizing nontraditional assets for consumers. You’ll hear Brian discuss the challenges and promise of blockchain, smart contracts, and Web3.
Brian, thanks for joining the show. Looking forward to the conversation on Web3 and all things blockchain.
Brian Clark: Most definitely, Andrew. Thanks for having me.
Andrew Roth: Before we get into all the trends around Web3 and what you’re doing, can you share a little bit about your role at Ascend Bit and how you got there?
Brian Clark: I’ve been doing product management for about 12 years for brands like Target, Meta, and, most recently, the C.P. Group. For those who don’t know, C.P. Group is a massive conglomerate based in Thailand and one of the world’s largest producers of feed, shrimp, poultry, and pork. But underneath that, there’s a ton of other things that we do. About a year and a half ago, I joined a new division here called Ascend Bit, which was tasked with a broad mandate to leverage blockchain for innovation.
Obviously, blockchain is a pretty big domain, and we’ve already gone through several iterations and proofs of concept. And through those efforts, we identified some tracks within the group and are focusing the majority of our efforts on productizing loyalty and gamification for third-party solutions under a software-as-a-service (SaaS) umbrella. We’re excited to take that throughout Southeast Asia, not just within the group. So that’s what we’ve been working on, and it’s been a fun journey with a lot of learnings.
Andrew Roth: Let’s take a quick step back for the audience, since there’s a lot of hype and confusion around crypto and Web3. At McKinsey, we see three technical primitives to Web3: blockchain, smart contracts, and the digital assets and tokens you can layer on top of the first two. In the past few years, there’s been a lot of investment in the infrastructure around these three layers, and we’re starting to see more use cases sitting on top of these primitives around tokenized assets. How do you see the Web3 world, and what’s exciting you right now in terms of real value to an organization like yours?
Brian Clark: I’d say we’re largely aligned with how McKinsey groups those three pillars. I think where we’ve lost some interest—and maybe this just reflects the regulatory state in Thailand—is around utility coins, security tokens, and initial coin offerings. Those are interesting mechanics, make no mistake. But I think unless your business is in the Web3 domain, do you really need to harness that? We’re no longer as interested in a utility token that can be used to purchase goods and services.
A year ago, everyone had a white paper and a coin. But now you’re seeing a move away from that, or they’re saying, “I’ll just adopt Ethereum,” or even “I’ll just adopt cash.” They’re more interested in the blockchain, smart-contract side of it. And in our business, we’re interested in the tokenization of assets and smart-contract interoperability. Also, Thailand is known to be unfriendly toward anything around decentralized finance (DeFi), which has influenced some of our direction.
Andrew Roth: Can you dig into the smart-contract side of things a little bit? Smart-contract innovation involves that interoperability you described, as well as the ability for developers to, more or less, grab a Lego-brick smart contract and build on top of that to accelerate development. Are there any noncrypto prototypes or use cases around smart contracts that you find compelling?
Brian Clark: From Ascend Bit’s perspective, we’re trying to target loyalty and gamification. And the specific thing we’re interested in exploring is a smart contract’s ability to tokenize a nontraditional asset. Let’s say you want to start selling something but you don’t have scale. You can go on to Shopify. But what happens if your asset is nontraditional, like a cooking class, and you want to reward someone with that? Well, now you can tokenize it. Technically, it’s a nonfungible token (NFT), a digital proof of ownership people can buy and sell.
What’s interesting about a smart contract is that it democratizes that process. You get a cut; they get a cut. Scale doesn’t matter, and here are the payment terms. As soon as I buy your cooking class, you settle within X hours and here’s your split, always. And that type of transaction guarantee is different. Traditionally, if you approached a big brand, you’d cut a deal to give them a little more revenue share, special terms, and special payouts. A smart contract is just, “Here’s the playing field, and anyone that wants to engage can partake.”
So the rules of this ecosystem are known to all and shared by all. There’s never a question of “When am I going to get paid?” The smart contract is collateralized, and it instantly pays out once these preconditions are met. I think that part of it is really interesting in unlocking more of these ways to bring out rewards and loyalty. It levels the playing field. And again, you can also tokenize nontraditional assets.
Andrew Roth: I like the use case around loyalty, because it’s easy for the audience to understand. The traditional earn-and-burn loyalty programs in the past were difficult, because there might be some anchor player in the ecosystem, like a grocery store that wants special terms, so there’s always this lack of transparency. What you’re saying with blockchain and smart contracts is it just makes things transparent and more a matter of fact, almost like a batch process in terms of how transactions get settled.
Brian Clark: Exactly. And you also have this transparency on interactions you couldn’t do before. Let’s say you receive a reward you don’t want. Now, you can create your own marketplace in your loyalty ecosystem and put it up for barter. Someone can log in and say, “That looks kind of cool. I’d like that.” You can now trade for that. And again, a smart contract facilitates everything, with a percentage cut.
Before, a brand could never unlock a secondary market, or if it did, it would go off-platform. Here, it stays on-platform: “You tokenized my reward, and even if I don’t want it, Andrew really wants it, and he’s going to settle with me.” Smart contracts make it easy. And you can see where it went. It’s like, “Oh, this is pretty valuable. I can see where these assets are moving. I unlocked a secondary economy I didn’t have before.” On a Web2 database, this would take a lot of effort to put together.
Andrew Roth: That’s true. Many people don’t bother redeeming their points or even browsing the rewards catalog. And if they don’t like any of the rewards, there’s not much they can do beyond cashing them in for airline miles. Starbucks recently announced its Odyssey metaverse rewards program. Any thoughts on that, and what’s in the pipeline for you around loyalty and gamification?
Brian Clark: We do draw inspiration from Odyssey. Starbucks had one of the most successful loyalty programs on Earth. Period. It was always cited as one of the best.
Andrew Roth: At one point a few years ago, they had more money on deposit in their loyalty system than some US banks.
Brian Clark: And it’s simple, it works, it’s valuable, and they did a great job, since Starbucks is a well-run company. So why are they completely replatforming this already successful experience? But once you read about the program, it’s very compelling and involves purchasing limited-edition NFT badges and immersive customer journeys, or odysseys. There are so many unique aspects to the program, especially around this community and marketplace concept and how easy it is to tokenize. For example, I could give you a badge that has a seasonal benefit, or one that unlocks something new each month.
Starbucks is really the leader here, and I think there’s room for fast followers. We’d like to emulate some of those experiences for brands that lack the capital to build their own Odyssey, providing a SaaS solution that allows them to easily integrate these experiences into their domain. You then layer on badges and tokenized rewards that can be unlocked in this promise of community and marketplace. And I think that’s really compelling.
We have two of the top five loyalty programs by volume in Thailand and are doing some interesting validation pilots to give us a leg up as we take this to other players in the market. If a top brand is going to replatform a rewards program that is so successful that it has more money than some banks, they did it for a calculated reason. And we’re equally passionate about the promise of Web3.
Andrew Roth: It’s clear from the energy in your voice that you feel we’re on the cusp of a breakthrough use case here in the gamification loyalty bucket of Web3 use cases. But there is some cynicism out there because of what’s happened with crypto and how it’s sullied the waters with other parts of the Web3 ecosystem. It feels like everyone’s just waiting for that breakthrough use case that people can point to in a practical way. Where do you feel we are on the innovation adoption curve? Are we a few months away? A year away? Two years away?
Brian Clark: I think we’re a couple of fiscal quarters away. If I look at some start-ups out there, they’re doing well, like a company called Heirloom. One reason I’m excited about loyalty is the tokenization of rewards. We have 25 million monthly active users, so it’s a large-scale loyalty platform. For me to create a new campaign for my marketing team, I had to program that logic; I had to debit, I had to perform quality assurance, and I had to deploy it. Now, I can just put that logic onto an NFT, so my time to market is faster, which is a competitive advantage.
Plus, there are other competitive advantages. Since you can tokenize nontraditional assets, think about the fulfillment loop. Let’s say you tokenize a VIP pass to an art fair, and there are only 100 of them. When I go to the event, how do I complete this loop and make sure there’s no fraud? People have digital wallets, so I transferred it from my wallet back to the venue wallet, and there’s no worry that someone faked it with a screenshot.
I think that loyalty loop is going to be really compelling, since big and small brands alike can start tokenizing things for a reward far more easily than before. I’m certainly bullish; I’m biased. But I do think that this is going to be big, probably in six months or less, and there are quite a few start-ups getting some really good funding.
Andrew Roth: What do you like about Heirloom?
Brian Clark: It’s so broad, but it’s so good, since they’re saying you can tokenize anything. They’re trying to be the Shopify for tokenized assets. This is compelling, because if you think about e-commerce, why do you have to go to OpenSea to buy my tokenized offer? It makes no sense. Just tokenize whatever it is, sell it on my site, and let me get my revenue. I think that’s what they’re trying to say. I also think they’re being brave by tokenizing anything. That’s kind of ambitious, but it’s also exciting. I like their attitude that an NFT is a digital proof of ownership of whatever you can program and prove.
And again, you get this loop. That’s the most important thing to me. I don’t have to integrate with your point-of-sale (POS) terminal, I don’t have to scan your QR code. That takes integration. This is just, “Here it is. Transfer it to this wallet. OK, that’s authentic.” I couldn’t fake that mint, and I couldn’t fake that transfer. Then you go on an Etherscan and validate that transaction. I think these underlying blockchain and smart-contract elements are going to help power these loyalty and gamification rewards, or even a marketplace of different services, beyond what you’ve seen before.
Andrew Roth: I see two lenses emerging. One is staying on the NFT and loyalty points. Blockchain and smart contracts create that efficiency, taking out those integration points like QR codes and POS systems, which we all know are very complicated to integrate with to close the loop on a transaction. So that’s an efficiency play. But you’re also talking about tokenizing everything, which brings up this topic of ownership, equity, and the creator economy. Anything you’re starting to see emerge as a use case around this whole promise of the creator economy?
Brian Clark: If I’m a brand and create something, like a Prada bag, I can tokenize it so you know it’s 100 percent genuine. And if you resell it, the buyer knows it’s real and it also comes with some added benefits. I think the value of the creator economy is going to be seen in the secondary marketplace, because the asset is verifiably authentic and comes with transferable value. I think that will unlock this creator economy, as well as a secondary economy that is trustworthy and interesting and facilitates easy transferability.
Andrew Roth: It’s exciting, in theory, to be a maker or creator right now. We see the potential, and I think we’re both excited about the space in general and the opportunities around it. Let’s shift to some of the challenges you see in terms of the technical layer, the use case layer, and the customer layer. I’m sure you’ve had conversations at Ascend Bit where you’ve experienced pushback from some of your clients.
Brian Clark: We’re still trying to help people understand Web3 and why it should matter to them. Because they often say, “I already have my loyalty program on your catalog. Why do I need yet another storefront?” So getting Web3 buy-in requires helping them understand all this in a nontechnical manner. You need to walk them through the added benefits like the secondary marketplace, the additional revenue, and never having to worry about issued versus claimed rewards. Because if you say, “We’re Web3,” that’s provocative, but you have to help them understand why it matters for them to adopt your platform.
What we’re struggling with right now is trying to convert two groups of players. One is the publishers, the makers, and why they should embrace Web3. Second is persuading third parties to adopt us as a SaaS, who counter, “I can already do most of that. Then I have to replatform or integrate your software development kit. Why?” It comes down to evangelism and education about the differentiated value. Because even as you look at Starbucks Odyssey as a great example from which to draw inspiration, it’s still vague: “Oh, you can play this great music that sounds beautiful. But what does that actually mean in practice?”
So it’s crucial to provide these concrete examples people can understand that make it less about the technology and more about the experiences they can enjoy. I think where we’re specifically struggling is providing that clear narrative that demonstrates a value add, because loyalty and gamification is nothing new.
Andrew Roth: I think Web3 natives would say, “The opportunity is more around this shift of ownership. Instead of just having a points balance and a loyalty program, I now have assets. And assets are much more valuable and emotional to me, and having experiences and artwork that can be transferred in a marketplace is a much different way of creating an authentic community.” I agree that we’re a few quarters away from a use case that creates this massive fear of missing out (FOMO). And it’s going to basically turn the light on for people around this shift from old-school community building and loyalty to more of an authentic value exchange.
Brian Clark: I like how you describe that authentic community. Beyond the tech in our solution, it also requires brands to think differently. Let’s say you have a community of 100 people. What do you do as a brand to engage those 100 people in meaningful ways to show that your reward is unique to them? It’s not just the tech experience; it’s going to be a shift in your channel marketing strategies as you tap into and harness that community.
Andrew Roth: I’ve been experimenting with STEPN, a Web3 lifestyle app where you earn coins when you jog, run, or walk. And when I’m out on the road, I can tell that other people are using it, because they’re almost running into trees checking their watches and phones. They’re building something more than just points; it’s a shared value of health and wellness. There are so many creative opportunities now to build community with more weight to it, and it will be exciting to see where this goes. I think this area of the emotions around ownership and value may be the pathway to unlock all the new use cases that make it mainstream in Web3.
Brian Clark: I think that’s well summarized. It’s going to be really interesting in this domain. I do think loyalty is on the verge of a major change, and I hope it is for our business and others, too.
Andrew Roth: Now comes a segment where we invite experts from McKinsey to provide more context and to draw practical insights. I’m joined by Dilip Mistry, partner and leader of Leap by McKinsey in Singapore. Dilip, great to have you on the show.
Dilip Mistry: Thanks, Andrew. Good to be here.
Andrew Roth: I’d like to cover three things. First, Brian’s mission to unify loyalty and gamification and the customer sentiment around that effort. Second, how do blockchain, smart contracts, and Web3 in general enable that? And third, a large part of our audience is probably wondering how to get started in this area but may be confused by the jargon and mixed signals coming from the market right now. What are some of your thoughts for people not familiar with Southeast Asia and the appetite consumers have for gamification, loyalty, and rewards?
Dilip Mistry: Having lived here for over 20 years now, I think there’s definitely an appetite for better deals. Consumers here are willing to stand in line to get a dollar off a particular product or a freebie, and it’s part of the mindset and why people are willing to jump on board rewards and loyalty programs.
But now we have islands of loyalty programs, and there’s some consumer dissatisfaction about the inability to use points from one program and redeem them in another, or the multiple times they need to reenter their information as they move from program to program. So there’s a huge opportunity to reimagine and reinvent how loyalty and rewards are done.
Andrew Roth: I think it’s that shift of taking the consumer relationship beyond just rewards to encompass engagement and community with the brand. I think what we’re seeing now is consumers demanding a little bit more than just a 10 percent discount or a reward. They want to feel more connected to the brand. Brian and I were talking about Starbucks Odyssey and how they are coming up with some creative ways beyond discounts and freebies to engage the brand through the metaverse. The big question is, what killer use case or feature will really unlock and make the metaverse mainstream? What are your thoughts?
Dilip Mistry: I think Odyssey is a great example of Starbucks taking a pragmatic approach. They’ve always been an early adopter when it comes to technology. I think they were one of the first quick-service restaurant chains to install Wi-Fi, and their loyalty program is impressive. And now they’re taking a lot of nontraditional assets and turning them into NFTs.
I think they refer to them as stamps, and you get recognized for traveling and completing a number of actions. They’re being honest and thoughtful in terms of how they’re bringing these experiences to consumers, who don’t need a Web3 wallet and can buy some of these stamps with credit cards as well. They’re taking a very pragmatic, customer-driven, nontech approach, leveraging the benefits of their existing program and merging it with the good bits of Web3.
I think that’s the answer for many use case scenarios, where you are pragmatic, take the good bits of technology, and come up with new experiences—as opposed to being a Web3 purist and forcing consumers to adopt technology and behaviors they may not be ready for.
Andrew Roth: That leads us to my second question, about how smart contracts and blockchain facilitate loyalty and gamification. Brian and I discussed it from an efficiency perspective, how it allows you to include lots of different partners and onboard them without a lengthy business development process. The other part I’d love your insight on is ownership, where a creator in Thailand makes something and gets rewarded each time it’s resold. What are your thoughts on smart contracts unlocking efficiency and this emerging creator economy?
Dilip Mistry: When it comes to the creator economy, there’s a lot of excitement with regards to Web3, because for the first time, artists can protect their work. The smart contract itself allows them to define the rules in terms of what happens whenever anybody else is viewing their work, wants to purchase it, or gets involved in an exchange. A lot of the creators I speak to are excited about the fact they can focus on being creative instead of worrying about what’s happening when some centralized body handles the transactions.
I believe this is going to result in lots of artists getting involved in the process, regardless of their industry. We’re going to see lots of transactions taking place around the world with complete transparency, without anyone worrying about some middleman taking value.
Andrew Roth: Smart contracts create speed and transparency and offer creators the element of ownership. It will be very exciting to see how incumbents and brands start to localize the experiences they offer to consumers, especially in loyalty programs that move beyond traditional rewards into more creator–brand partnerships within the local economy.
Dilip Mistry: I agree, and as Brian mentioned, they’ve got a number of these assets within his organization, so it’ll be interesting to see how businesses like that get off the ground. I think we’ve learned from Odyssey that there’s a way of delivering this without making it overly technical. If you can integrate the new technology with what you have today, it’s better for the consumer and will allow a lot more people to embrace Web3.
Andrew Roth: How should organizations move forward on the topic of Web3? I think what Ascend Bit is doing is one example of a way forward. What bits of advice would you offer the incumbent that is trying to make sense of all this?
Dilip Mistry: As an incumbent, you’ve always got to be watchful of innovations but also careful not to get caught up in the hype. Timing is everything. But I certainly wouldn’t let the latest noise on crypto make you be dismissive of Web3, which presents lots of opportunities to reimagine existing use cases and think about new ones as well.
If I were an incumbent, I’d absolutely make sure a bunch of people on my team learn about all this. I’d also encourage them to get involved in the local communities and maybe partner with some of the innovative start-ups doing things in this space. Hopefully, you’ll identify a use case you’re excited about, put some resources behind it, and take a test-and-learn mindset.
As with any new technology, be cautious. But at the same time, you’ve got to start doing it to see if it’s material for your business. What I wouldn’t do is just watch and wait, because that’s not the right mindset for someone who wants to think about new business ideas and opportunities. So my advice for an incumbent is to cautiously get involved to learn and identify your use cases.
Andrew Roth: I like that. We’ve seen cycles of companies partnering to speed things along during Web1 and Web2, while people who watched and waited became bogged down in lots of planning and not much participation. While healthy skepticism is justified around some of these things, the last few years have seen a lot of investments in the infrastructure around blockchain and smart contracts. And we’re just starting to see some use cases come up outside of DeFi—more practical use cases that help businesses and consumers.
It will be interesting to see who starts to win. I think that’s the key way to end this: Don’t watch and wait. Continue the principles around test and learn, but make it customer centric, rather than leading from a technology-first perspective on what could be done versus what should be done.
Dilip Mistry: Absolutely. In fact, if you get a chance, just go through the Starbucks Odyssey website, because there’s very little Web3 language there. It’s a great thought starter in terms of how you can embrace the advantages of new technology without having to be technically literate—because that’s not what the consumer wants.
Andrew Roth: Yes. Let’s eliminate the jargon. Thanks, Dilip. Enjoyed and appreciate your perspective.
You have been listening to The Venture. If you like what you’ve heard, subscribe to our show on Apple Podcasts, Spotify, or wherever you listen.