Presented at The 2nd Annual Healthcare Blockchain Summit, Boston, June 2018

1. Keynote Presentation
Lay-of-the-Land for 21st Century
Business Models:
Hierarchies, Platforms, Crypto Networks
Boston, MA
June 2018
Vince Kuraitis JD, MBA
Principal and Founder, Better Health Technologies
vincek@bhtinfo.com
@VinceKuraitis
1

2. A personal story
2

3. Overview
I. Introducing “The De/Centralization
Continuum”
II. The Decentralization Megatrend
III. A Bit Deeper Into “The De/Centralization
Continuum”
IV. Eight Implications
3

4. 4
I. Introducing
“The De/Centralization
Continuum”
Business Model & Network Design Options

5. “The De/Centralization Continuum”
Business Model & Network Design Options
Centralized Decentralized
5

6. “The De/Centralization Continuum”
Business Model & Network Design Options
Industrial Era
Hierarchies
Web 2.0
Platforms
Web 3.0
Crypto
Networks
Centralized Decentralized
Hybrids Hybrids
6

7. Graphical Depictions
“The De/Centralization Continuum”
Centralized Decentralized
Platform
CEO
Industrial Era
Hierarchies
Web 2.0
Platforms
Web 3.0
Crypto
Networks
7

8. 8
II. The Decentralization
Megatrend:
What is it?
Why is it a big deal?

9. “Decentralization”
Many Definitions & Meanings
• As applied to biz models:
“Distribution of power,
influence, value capture”
• What it’s not:
– Not just virtual care or geographic decentralization
– Not just “one” source of centralization
9

10. I. The Decentralization Megatrend, e.g.,
• “Techlash” against platform giants, e.g., Facebook
• Addressing concentration of wealth (1% vs. 99%)
• Cryptocurrencies without government backing
• Banking w/o banks
• Energy w/o utility companies
• …
10
Centralized Decentralized

11. Centralized Decentralized
Healthcare is Highly Centralized
• Examples:
– Fee-for-service payments drive activity
– Patient data not shared; viewed as proprietary asset
– Increasing consolidation
– Increasing % of employed physicians
– Price/quality opaqueness
– Culture, professional societies
– Local providers as customary default choice
– …
• What would a more decentralized healthcare system look
like?
11
x

12. Industry Megatrends Drive
Decentralization in Healthcare
1. From volume to value
2. Digitization and IT interop
3. Democratization/consumerization of healthcare &
data
12
Centralized Decentralized

13. 13
III. A Bit Deeper Into
“The De/Centralization
Continuum”

14. Ridesharing Reimagined
Centralized Decentralized
Own, control &
operate
everything
A software
platform to
connect drivers
& riders + a
“take no
prisoners
company
culture”
A kinder,
gentler version
of Uber –
governance
respects a
community
focus
Local driver
cooperatives
enabled by a
software
platform
“A P2P mobility
service enabling
trustless
collaboration
powered by
blockchain”
14

15. How/Where Is Value Created?
“The De/Centralization Continuum”
Centralized Decentralized
Platform
Industrial Era
Hierarchies
Web 2.0
Platforms
Web 3.0
Crypto
Networks
15

16. Characterizing Crypto Networks
• Key components
(Outlier Ventures)
– Open source
– Distributed
– Decentralized
– Automated
– Tokenized
• Enabling technologies
– Blockchain
– AI
– 3D printing
– Cloud
– IoT
– …
16

17. Defining Characteristics:
Hierarchies, Platforms, Crypto Networks
17
Centralized Decentralized
Industrial Era Hierarchies Web 2.0 Platforms Web 3.0 Crypto Networks
Mindset Command and control Orchestration Collaboration; empower individuals &
communities
Core Assets Ownership of financial & physical capital,
employees, IP, brand…
User networks, proprietary platform software Data
Strategic Focus Products/services Ecosystems New economies
Value creation by co. P2P and through platform capabilities P2P
Value capture by co. by platform P2P
Business Strategy Knowledge &
Empiricism
Well established--100+ years of evolution Moderately-well established--20 years of
evolutoin
Nascent
Use of blockchain tech? Technically possible but advantage over
other tech is unclear
Yes. Focus on tactical advantages, cost,
efficieny
Yes. Strategic, disruptive.
Governance by co. platform rules P2P, communities; emerging
Reputation Brand curation, rating systems, data P2P
Security vulnerable central point of control vulnerable central point of control blockchain, consensus
Privacy
Regulatory Frameworks Well established "Techlash" just beginning in U.S.; EU
enacted GDPR regs effective 5/18
Largely non-existant
User data Proprietary to co.s Proprietary to platforms Controlled by users
TRADEOFFS
Control Highest Lowest/none
Network effects Lowest Highest
Coordination/Orchestration Highest

18. 120+ Healthcare ICOs in the Works
18
Source: a public, editable Google sheet created and curated by Vince Kuraitis at https://bit.ly/2HGaByR

19. "Crypto networks will be the
organizing mechanism and
economic model of the next
generation internet"
– Ali Yahya, VC at @a16z
19

20. 20
IV. Eight Implications

21. A) Anticipate a Full Spectrum of Business
Model Options for the Foreseeable Future
Centralized Decentralized
Platform
CEO
Industrial Era
Hierarchies
Web 2.0
Platforms
Web 3.0
Crypto
Networks
21

22. 1) Throughout history, centralization and
decentralization have been CYCLICAL
B) What’s The Long-View on Centralization vs.
Decentralization?
22
2 Schools of Thought:
Centralized Decentralized

23. 2) This time is different:
• Decentralization will be PERMANENT.
• New technologies break past cycles.
23
Decentralized

24. C) Welcome to a New, Complex World of
Business Models and Strategy
• Crypto networks as uncharted design spaces
• Many new rules are counterintuitive
24

25. Many Strategies Change 180
o
• Industrial Era Strategy:
– Dominate markets through supply-side
economies of scale
• Digital Strategy:
– Maximize demand-side economies of scale
(network effects)
– Dominate markets by orchestrating networks &
ecosystems
25

26. D) Anticipate Healthcare
“RE-Centralization”
26
Centralized Decentralized
?

27. E) To Healthcare Incumbents: “You MUST
decentralize your business model”
27
X
YOU
YOUR COMPETITORS
Centralized Decentralized

28. • Add platform components incrementally
• Doesn’t require abandoning existing (hierarchical)
business model
• Less of a cultural leap
• Lower risk – 20 years of platform learning
F) For Most Incumbents, Decentralization via
Platforms Will Make More Sense
28
Centralized Decentralized

29. G) Most Blockchains Will Function as
Platforms – Understand the Terminology
• Network effects
(positive & negative)
• Growth hacking
• Adjacency strategies
• Winner-take-all dynamics
• Minimum viable platform
• Core transaction
• Chicken/egg dilemma
• Platform Thinking
• Multi-homing vs. single-homing
• Value creation at the edge of the network
• Value creation vs. value capture
• Identify & control strategic chokepoints
• Supply-side vs. demand-side economies of scale
• Platform monetization
• Governance models
• Platform metrics
• ...many more
29

30. H) OPTIMIZE Centralization vs.
Decentralization
• Reframing:
– FROM: Maximizing decentralization
– TO: Optimizing centralization vs.
decentralization
30
Centralized Decentralized
xx

31. 31
END