I listened to this WSJ podcast on the possibilities of the blockchain fixing our food supply.

They were discussing in broad terms a project where IBM and some large partners were building a private blockchain to document and monitor the food supply chain.

I am not a private blockchain expert certainly, but the supply chain for perishable foods, the reporting rigors, the costs and issues of the business are something I know well first hand. A process that appears from this podcast and my experience with the crypto space, a natural fit for the blockchain to address.

To be clear, the food supply chain status quo in NA is a serious mess. It has always been one.

There are government certs. There are the rigors of HACCP but it simply doesn’t work in a trusted way that is efficient enough to protect people, especially with perishable goods that require refrigeration.

Today, every food producer, regardless of size is required to keep records of all ingredient sources and map delivery of ingredients to the lot number of the product by sku. So that at any point in the chain that there is a problem, it can be determined what product is contaminated, pull it, alert the public, then figure out the root cause of it and inform all others using the problematic ingredients.

In the podcast, they talk about a bad load of frozen Mango taking 16 days to track back to the source and pull the product. This sounds very realistic to me.

Source identity, verifiability and speed of communications and action are the thee broken pieces of a three-piece system.

With little or no automation, no streamlined communications disaster systems, no real visibility to anything during transport, and built on legacy systems over a century old, it is a pressing public safety problem. The only real change that has occurred in decades is a sharply escalating price of insurance as this reality becomes more out of control.

The blockchain as an infrastructure can fix this in concept. It’s perfect technologically in many ways.

It will require dramatically changed reporting behaviors up and down the supply chain. Require connects to sensors that are not yet there, but it could possibly as a platform enable a solution for this horribly thorny and critical piece of our food supply.

In a recall situation for example, something that takes days to decipher could happen in abstract in a minute or less. Lives could be saved literally.

I believe this will happen and many are working on this. That is good news on some fronts.

But there is another, darker side to this scenario.

A telling vertical case study of private blockchains replacing current supply chain plumbing in a way that will stifle competition and bolster the dominance of the current players, potentially hurting the economy, killing off the small players and harming us, the customers.

The artisanal food market that drives innovation and healthy eating in our food supply is shrinking dramatically as is.

It is mostly a cost equation, as the cost basis for someone making pickles or herbal infusions for example, are prohibitive for most artisanal or startup business models. From insurance costs to the percentage points taken by the handful of huge distributors and the stores themselves—be they Whole Foods or Albertsons.

It is a shrinking ice cube in the sun business model that simply doesn’t work well, if at all, for smaller vendors.

I think this private chain spoken about in the podcast will certainly get built. Many will and I can see Amazon building one to handle every piece of the Whole Foods and home delivery grocery distribution business.

I fear though that in this case, it will accelerate a process of restricting artisanal food producers, already crowded out by the costs and costly compliances in place today.

You make granola, ketchup or organic bread, let’s say.

Not only will you have to enter the info at the kitchen or processing place, you will most likely need to pay to be on the chain, possibly pay to insure your correctness of your info, post a bond even to prove your capacity to respond quickly, but also every supplier down your chain will have to do so as well.

This will in effect remove the smaller Green Market suppliers, remove a large number of the artisanal makers and shrink choice on the shelves for the customers.

Consumers will have a safer industrial product pipeline with less choice, less competition, less healthy food. We will all lose except the current incumbents.

This narrative is an interesting reality check on the use of private block chains. Or moreso, a scenario on how this technology can hurt and limit choice and innovation, not help in this one vertical instance.

The market and health needs for accountability and real-time information in the food supply chain are very real.  I know this from the inside.

The blockchain is a near perfect tech platform to build it on.

But the economic drives of the monopolies involved is to do this in a private proprietary chain with no transparency, no openness and in most ways potentially more restricting than the current broken model.

This is an important discussion.

One that orgs like ConsenSys should surface and include the community, the food industry, the artisanal makers and us, the consumers in the discussions around it.

Rather than rebuilding a proprietary limiting  system with a highly-functional blockchain closed system, is there a model to do this as an open system that will not only protect us all from food safety concerns but democratize the process and increase choice?

Bringing in more vendors into our stores. Increasing variety for the consumers. And still allowing people up and down the chain, large and small alike, to build prosperous businesses.

There is a market and human side of the vast potential of the blockchain.

This is one example—of many to come especially with private blockchains—where it is time to get ahead of the reality and think through the options and repercussions.

A private non-transparent blockchain making the current, inefficient system safer in some respects but debilitating in others is not progress in my mind.

This is our food supply. This change is coming and it is wise to make it best for everyone.

Or in the very least, approach it with eyes very wide open.

The most significant changes in our culture, driving the largest economic impact, are entering the market in the most messy, rule bending and ambiguous ways.

True of transportation (see my post on dockless scooters). So obviously true for crypto.

And certainly true for legal Cannabis products and their potential to redefine the wellness and the supplement industries, not to mention the stoner segment.

My blog readers know that I’m deep into innovation in health and nutrition, and lately CBD and liposomal delivery systems. Though to date, the CBD I’ve been using has been a hemp derivative as I live in NY, not a Cannabis legal state. (Post here on CBD, here on wellness.)

Enter this trip to LA, ending up shopping at the highly-rated Rose Cannabis Collective in Venice Beach.

I expected a fully-formed LA experience.

Friendly, green-smoothy ambiance. Whole Foods supplement presentation but with Cannabis and CBD products for recreation and health. Valet parking obviously.

Ha!

This spot on Rose, was a variant of pawn-shop décor, sanitized head-shop ambiance with a line-up for ID checks. Abundant security guards, and rigidly enforced no cell phone usage rules including zero tolerance for picture taking.

Cash only to boot, no published price lists though staffed with well meaning, partially-informed sales people with a surfer punk look and attitude.

The store oddly had almost no signage and zero catalogues to browse. You ask, they point. You ask again, they answer as best they can.

So, the process went like this.

I asked for CBD/THC topical creams for pain. Went through the discussion of the percent’s of ingredients, and they pointed to a product. Info about the vendor, the process of creating the product, organic, the brand—nada.

I wanted more, the salesperson wrote on a piece of paper and slid this across to me.

I left, looked at the site, spoke with friends in the know and came back to buy.

The rub is that that the process is beyond stupid. The normalization of this product segment and technology almost nonexistent. The reality that there is an ATM in the middle of the room to get cash is incomprehensible.

But–

The end result was so worth it.

This product, a 1:1 THC to CBD pain salve is honestly off the charts effective. The company behind it reputable and somewhat transparent.

The process to get to this information and purchase–Pleistocene-era primitive.

I also discovered that the margins are off the charts—a combo of early market complete lack of transparency, lack of regulation, lack of disclosure and deep consumer price gouging.

The legal Cannabis industry is obviously on fire, printing profits and creeping to over $12B this year.

No one has broken the numbers down to recreational vs CBD-based medicinal. No one is selling this in a creative way or to my knowledge, rethinking the retail experience.

From talking to the people in the shop, there is significant confusion as to what they can and cannot do, a thin line between between medicinal and recreational, between real information and conjecture, and between what is legal and not.

Legalization of Cannabis cross the country will continue to grow quickly. And it should.

The potential impact on medicine and a growing understanding of CBD is something that will change a lot of people’s lives. And drive economics for the states that do legalize it in a very big way.

Some estimate this segment to be $100B in 6+ years.

With entrepreneurs figuring out how to make and sell products smartly, reach beyond the early adopters and stoners, that number seems way to small. With per purchase numbers above $200 per transaction, you won’t be able to keep investment away from this sector.

Payment issues as well are going to change as there is simply too much money on the table.

With either the large financial players like Amex, Visa, authorize.net, PayPal and Shopify accepting transactions as they do not today.

Or more likely, with a serious and studied crypto solution in place, the growth will dwarf just about any emerging industry currently in play.

In response to buddies from crypto payments space who are talking about their part in this, I asked the manager of this extremely busy shop about crypto. No one from the crypto space had approached them and they are a large affiliate collective with many stores cross the LA area.

This is an astonishing category change in its most nascent stage.

Overtime, it could redefine parts of standard medical practices, supplements, retail, payments, and food. It is mushrooming today with almost nothing coherent in place.

And the largest rub, is that this is of course state by state.

Unless I literally smuggle the products back, I can’t take any of these products home with me.

Truly the best and the wackiest of market times for the Cannabis industry.

Both crazy inspiring and laughably amusing.

Go try this. For the products. For the experience alone even. It won’t disappoint.

I’m a long-term bikeshare and urban transportation geek.

I first discovered Velib in Paris a decade ago, and as soon as CitiBike showed in NYC, I was in. Way before stuff worked well. Way before there were docks smartly placed throughout lower Manhattan, cross Brooklyn and river-facing communities in Jersey.

I blogged about them back in 2013.

In the largest and busiest city in the country, they are part of our infrastructure, spawning an ecosystem of more bike lanes and a deeper partnership between bikes, people and cars on the street.

But in New York, we don’t have—as yet—anything dockless, nor anything like these electric scooters simply strewn around like flotsam on every corner and cranny in Santa Monica and Venice Beach.

I’m hooked on them for this place.

When visiitng not Ubering as much. Not using the hotel shuttle, just jumping on these things to go to meetings and dinners.

The scooter wars are well documented and old news.

The rivalry between the $100m-funded Bird and chief competitor LimeBike, and between both of them with neighborhoods, cities, community groups and the police is acerbic and ongoing.

One on hand they are simply a game changer for micro-mobility, on the other a huge early infancy mess.

If you haven’t used them, in LA you simply download the Bird and Lime apps, find one of the scooters anywhere, use a QRC code to unlock and ride.

It takes about 10 minutes to go from Pico and Main in Santa Monica to Rose in Venice, 5-10 minutes longer to Abbot Kinney. To Rose, cost is $2.20, around $10/dollars an hour. That route is a 20+ minute, $10+ Uber ride or a solid hour to walk.

They are already part of the culture here.

This morning at 5am when I was meditating on the beach to start the day, a caravan of surfers arrived carrying their surfboards on LimeBike scooters, with their dogs chasing after them!

I can’t wrap my head around how dockless in general or these scooters could work in Manhattan but in LA they are natural to the landscape, serving a real purpose.

They are simply everywhere. Some in orderly lines, most just thrown around.

On the streets. On the sidewalks. People pulling friends on skateboards and one idiot with his baby in a carrier! Percent of helmets—very small.

So yes, users love them. And abuse them.

Neighborhoods kvetch about the messiness. Municipalities are rightly concerned about the safety.

The scooter companies, acting in the tradition of Uber in the early days, are just doing it. Breaking rules, not asking forgiveness and literally rolling forward creating fans and a massive exhaust of ill will in their wake.

What I know as a user though is that they are a transportation solution that needed to be here. In an area with too many cars, no parking, large distances and no public trans.

Somethings just feels right and touches both a natural market and personal need. Scooters here are that, just as CitiBikes were in NY.

And to be clear, in the beginning CitiBikes were a mess.

Broken racks. No racks. Racks never filled. Racks overfilled. Customer service nightmares.

Then it gets fixed, piece by piece with customer feedback and city participation.

Bikeshare doesn’t work in LA while you might think weather wise, it is a natural fit. The city infrastructure is not there nor is the commitment. Bike paths from Beverly Hills to Santa Monica or from SM to Malibu–never going to happen!

But scooters seem right.

Dockless as well as something that could be indigenous to a Southern Cal transportation solution. It isn’t near perfect for certain, but a short list of rules could fix 90% of the things that are broken.

Some things just make sense cause they solve problems and make life better and more fun.

Scooters are just that for this place.

This is not a technology looking for a solution. This is a solution in its messy early infancy that is just not that hard to make right.

Once upon a time, Hollywood movies were where innovative storytelling lived and TV, the domain of romcoms, sitcoms, classic reruns, zany shit and channel changing crap.

One of the underlying themes in Ben Frisk’s new book The Big Picture: The Fight for the Future of Movies is that this norm has been turned on its head. A polar shift on where creative storytelling is happening today. And why.

How movie theaters are now the domain of massive franchises that can take advantage of the large format technology and a shared community around an event. With the mid to high-budget innovative projects moved to TV.

Or, more precisely, moved to the domain of the new studios, Amazon and Netflix.

Ben does a terrific job of putting the confidential industry numbers and personnel dirt revealed in the massive Sony Guardians of Peace email hack in context.

He also touches on how the business model of telling stories impacts creativity and diversity of expression. How risk is rethought when the platform is digital, endlessly broad and data-mined, especially when success has nothing to do with how many tickets or bags of popcorn are sold.

This is the truly fascinating piece with cross industry implications and prophetic to a changing relationship potentially to how art, culture and business coexist.

Movies in the traditional Hollywood system used a basic P & L where every project was evaluated on cost, return and risk before a green light to proceed.

It determined what got made and what we saw in the theater. And how stars got paid.

Not with the new studios.

Netflix doesn’t sell tickets, it sells subscriptions. Amazon sells toilet paper, refrigerators and now kale and coconut oil.

Once you move the profit model away from each creative project, the game changes completely.

Every piece of content yet another layer in the stack of diverse creative that feeds the massive needs for customer retention and acquisition for these now adjacent businesses.

Where you get Transparent as a bonus for belonging to Prime, along with an endless variety of entertainment types.

These new studios have no box office numbers, no marginal cost of watching for the customer, and for the most part, no target margin on the creative process itself.

They as well have massive data banks to mine and choose what to fund, who will create it, and who will watch it. And how many times.

Amazon especially is changing everything in its path with its studio.

The writer and producer are more important than the director. The movie star interesting but not necessary to success. And with no box office numbers, there is no more longer payments for residuals, changing the comp structure to a flat often higher one-time fee.

In effect, this challenges the media model, kills the Hollywood profit and loss creative endeavor model, and merges creativity in storytelling as simply part of what is needed to hold current customers and bring in more regardless of what is actually being sold.

If I get innovative, streamed entertainment, 10-15% off all Amazon and Whole Foods purchases with an Amazon Prime credit card, why shouldn’t I do this?

There are learnings here that speak to the role of creativity and content, storytelling and ROI to business in general.

There are glimpses of truth that imply that you can commoditize the very value of a brand as long as you feed the true needs of your customers for stories and entertainment. Something a lot stronger to hold onto than the unique quality of your shoes or salad greens perhaps.

As I write this coming out of NYC Blockchain Week, there appears to be an unexpected analogy to the intersection of creativity and business model there as well.

Business models until the last 3-5 years haven’t really changed in decades.

Facebooks and Twitter are simply old-school advertising models bolted on top of technological innovations they have productized and data mined.

Amazon and Netflix are, in effect, brand new business models, especially as they are using creative storytelling as the means to sell—well everything. Removing the ROI of the creative endeavor while elevating its absolute essential nature to corporate success.

With the crypto world, there is an abstraction of this connection between business model and the creative structure of the community.

Creative capital raises. New structures of orgs. New manners of compensation and an entirely new model of business driven by token fluidity, not simply profit, loss and margins.

I’m taken a bit by surprise here.

I’ve blogged on the lack of innovation in business models as we have changed the game technically.

What I didn’t fully understand is that creativity and storytelling on such a massive scale would be the loss leader that was an essential business piece once the model reconfigured itself. And that the thirst for endless variety in content would change Hollywood and the creative business in its wake.

That in the crypto blockchain case, while obviously different there is an analogous freedom in form that comes with new business models changing organizationally the economics of software development, certainly as well, a creative group endeavor with massive impact.

The takeaway here is that the shift in models, tangible in how Hollywood and their model of business has changed the face of how content is created and financed, is potentially part of greater change. One that will impact how we work, our creative endeavors and our culture that will roll down to every part of our lives.

Think Differently has never felt so real as a motto for the future.

Whole Foods from its outset was an aspirational and wonderful idea.

Premised on the vision that people would pay a premium for natural and organic products, largely local in origin within an environment where the brands themselves were front and center, connecting directly to the customers.

Happy, healthy shopping to 80s hits in an upscale supermarket Disneyland of sorts.

It succeeded wildly as a brand concept, as well as a successful launch pad for local brands, funding and all.

It failed solidly as a business model as the cost of product acquisition and distribution, the cost to local brands on top of the razor thin grocery model simply didn’t work at scale. Likewise, the Amazon acquisition.

As a customer and previously a vendor, I loved the Whole Foods brand and promise while fully cognizant of the economic foibles and problems inherent in the model itself. I loved it in spite of these issues as an idea that was important to work towards.

With the Amazon acquisition, I was optimistic. Hopeful that Amazon would figure out how to reinvent the paradigm while keeping the vision intact.

I’ve been carefully watching the changes at the store level.

First obscure, low-volume products quickly moved off the shelves often available at lower prices through online next-day Prime delivery through Amazon. Smart change.

Then the newly installed Amazon inventory system wreaked havoc on the shelves of my local store with out of stock SKUs and  less and less product choice. Surprising and counter intuitive from a company like Amazon.

And most telling, the massively growing Whole Foods 365 brand moving cross categories from paper towels to sundries, to cold press juices, t0 frozen ‘responsibly farmed shrimp’ then to dairy.

It’s the expansion of the 365 brand bolstered by the capital from Amazon that had the most promise even though it meant the sacrifice of local artisanal brands. They could in theory produce some things more naturally, more cost effective at scale and push the savings back to the customer.

Step back for a moment to their brand promise to put this in context.

Organic and fair-trade products to customers at market prices with respect for the growers while not forsaking the health benefits of its products to its customers. That’s the core who they are.

I’ll admit that without upending the grocery supply chain and crop production completely, it’s really challenging to scale natural production to feed a national chain, at price points that drive corporate peofits and lower prices to the customer.

I’ve blogged on my hope (here and here) that through efficiencies such as owning the arcane high-cost distribution systems and by scaling organic production through ownership of the crops, they could accomplish this.

All possible with reserves of capital and logistical expertise, which Amazon has in spades.

Enter the recent launch of the 365 industrialized egg line from Whole Foods.

This is possibly the first whisper of the end of the old Whole Foods brand promise, as this product and positioning is little more than an industrialized farming product wrapped in the company’s brand. Something out of a Shoprite, nothing like what Whole Foods has done prior. Not organic, nor free range. Nowhere on their own scale of organic or humane production of animal goods.

This line is being sold loudly as the house brand and I think indicative that capitalizing natural food sources to cut costs is simply not working and no longer the company strategy. Otherwise why the shift?

This truly odd launch under the 365 brand is an indicator that all is not rosy in the Whole Foods plan for brand integrity, healthy food and profits alike.

I’m just sorely disappointed in Whole Foods lack of imagination and for loosing sight of the end game from a brand promise point of view.

There are many companies trying to change the game in our food supply. Rethinking hyper local distribution to cut out the massive chains. Vertical farming in warehouses. Marketplaces to increase supply, simplify access and cut costs at every stage in the supply chain.

If with Amazon’s limitless capital, supernatural logistics and propensity for playing the long-game, they can’t figure out how to bring more natural food, fostering consumer health and awareness to more people at lower costs—well–someone else will have to.

I believe that if you have the imagination and the vision. A brand and a community. The technological will. And a long-term patient strategy and capital, you indeed can reimagine and revitalize the food supply chain. And profit enormously from it.

You can scale organic agriculture and humane farming for the health of the customers. You remove the multiple steps of distribution and pour the profits back to the company and customers where they belong. And you can fund new methods of farming to feed a changed world with increased and different demands.

I am a big believer in Amazon and the history of their acquisitions prior to Amazon, made me think they would be patient, flexible and imaginative enough to reimagine this.

Today they are not.

And there is no model that is not a fail unless all–including corporate profit, third-party vendor margins and us as health conscious consumers–win together.

Food (literally) for thought.