Nick James: Account Director, Clarity
Irfon Watkins: Founder and CEO, DOVU
Nick: Hello, I’m here with Irfon Watkins from DOVU. DOVU are one of the top hottest startups in the new mobility space in the UK. The guys spoke at AutoConnect last year. Just catching up with them after seven months, they’ve had a busy time. Perhaps the best way to start is for you to just give a quick overview of what DOVU is and what they’re about.
Irfon: We started up a couple years ago and the idea of DOVU is that we are going to tokenise user and customer behaviour in the mobility space. What I mean by that is a token that you can earn by doing different types of behaviour. For example, you can earn a DOVU token by charging your electric vehicle in the correct bay or at a certain time of day or in a certain part of town and that is rewarded in your wallet. It is really an app, which can be redeemed against other mobility services and solutions. So you earn your token by charging your vehicle and you can spend it on a bike for an hour.
Nick: DOVU straddles two of the most talked about areas of new technology, the blockchain and mobility. There is a lot of public misconception around the blockchain where people confuse it with Bitcoin. Perhaps you can give a quick overview of the blockchain.
Irfon: Yeah, absolutely so, the blockchain needs to be looked at separately from virtual currencies as it sort of exists as an application on top of it. Blockchain is really a ledger, it’s a distributed ledger and should really only be used if you are building a service or solution where you need to ledger something that is immutable, where trust doesn’t exist. So if you think about blockchain and bitcoin, the reason why blockchain was needed for bitcoin was that bitcoin is a currency was transferred without any central bank, so the blockchain was the ledger so you could transfer currency between different parties and have a trusted ledger that sits there, because you don’t trust each other, it’s human nature. So that’s what blockchain is, not really the technical aspects but really how it should be used. I think when you are building a service or solution it should be that element of technology that provides the trusted part of the equation.
Nick : So building on from blockchain, you’ve announced that you’ve joined with the Mobility Open Blockchain Initiative, MOBI. There are some huge companies in there, Ford, GM. What are the aims of that group?
Irfon: You know blockchain is a decentralised ledger and, really, things need to be decentralised when it comes to building standards and learnings from some of the proof of concepts and pilots that have been done in the space. I think that the exciting thing about MOBI is that we are seeing that there are thirty companies, and we were one of them from the launch of MOBI, all looking to collaborate, to create a set of standards and guidelines in terms of how we can grow and accelerate the development of the blockchain in the mobility space. It's about sharing, it’s about collaboration and sharing those learnings in order to speed up the technology.
Nick: How data is used is a really key issue in mainstream media, following the Cambridge Analytica scandal and the recent GDPR updates. In the automotive industry, particularly amongst fleet, aftersales and leasing companies, there is real nervousness that now the OEM’s are realising the value of data that they might restrict that access and various things. As DOVU you come from a different angle entirely, which is the data generated by your journeys belongs to you as a driver or a participant in that journey. Yey you've worked with some of the largest OEMs such as JLR, and your recent trial with BMW, how did that come about?
Irfon: I think the discussion of what is private data, what data is needed to provide safety in the car that the OEM’s need in order to deliver a product or service, against what the driver is giving away, is ongoing and to be determined. I think the challenge is about data regarding, for example, what petrol station I stop at, How many people are in my car, what journey I’ve been on, where do I stop and what route I take? Undoubtedly it’s personal, private data, and how you share that and who you choose to share that with should be under your control as an individual and GDPR goes some way to dealing with that.
From our perspective, we’re not jumping in front of data owners saying you need to do this or coming up with a firm opinion saying this is how data should be used. What we are doing is creating a system where you can be rewarded for sharing that data. So, if you are an OEM and you perceive that data to be yours but you like to reward your customer to encourage the sharing of that data, then we will facilitate that, but ultimately the discussion about who owns it and who doesn't own it is outside of our pay grade. For our side, we're focused on creating some new data points so that you can tokenise behaviour and sort of nudge people using nudge theory and gamification (you know, buzzword bingo, if you're playing it) to do certain things that they are not used to doing.
If you look at transport and how we go about our daily lives, normally we take the same journey to work that we always do and use the same form of transport that we normally do. If we drive to work and we drive past a great little yellow bike that's there, we go, “Ahh - that's really cool we can use these little bikes now and don't have to struggle to find a parking space.” Sometimes we need a nudge to change our behaviour and, just because the technology is there and the service is there, and all these operations of mobility solutions come up, you need a nudge to get out of your comfort zone, to do something different. So what we do is we encourage, we use tokens as a way of nudging the individual to try something different and that creates its own data set as to whether they have or haven't tried it. So that's really where our sweet spot is.
What DOVU isn’t is an API, sort of a marketplace for data where we are just gathering data and putting it in a warehouse and reselling it. We really are about creating some new data points and encouraging people to explore and try new forms of mobility, but also educating, informing and encouraging people to use the new technologies that are coming out, such as the battery, the electric vehicle, how should you charge it, where is the best place to exchange it, can you be encouraged to charge it off-peak as opposed to on-peak and if ten people in the same zone want to charge all at the same charging point, can we get people to try a different zone. All of those create new data points and that really is what DOVU is about.
Nick: So one of the biggest conversations in mobility currently is about multimodal. You've sort of touched on that in your previous answers. At the moment you're focused on the auto industry to start DOVU, are you looking to start those partnerships, say with bike sharing or scooters and all the weird and wonderful combinations that are coming out?
Irfon: So, if you look at the history of DOVU, we span out of InMotion Ventures, the venture arm of JLR, so it was a natural home for us to work with the OEMs and, as you said, we did a pilot with BMW and we’ve got multiple other pilots and projects with other OEMs that we are working on. What's interesting about that is if you just follow the investment of the OEMs, you'll find yourself in multimodal industries. Just take a look at what all these OEMs have been investing in, whether that's Lyft, public transport, bikes - the whole range. So if you’re going to offer a multimodal service sometimes it's a good point to start with the OEMs and then you can work others.
Certainly with our solution we are looking to redeem the tokens you earn over a multimodal service and you can do it within the ecosystem that has already been created. Having said that, we are in the early stages of working with one US state, and five cities within that state, on using the tokens as a way of encouraging not only the sharing of data for tour transport but also encouraging a citizen of that state to make choices such as places to park, times of the day to do your journey and encouraging different modes of transport for those citizens as well. It's a challenge to get US citizens out of the car and anything that can be done to nudge them is going to be useful. We will start with the OEMs or continue with them and the multimodal investments they are making but also start to separately experiment with smart cities.
Nick: So you...mentioned BMW a few times and you've published some of the information recently, just as a small business learning and working with a much larger company, what learnings did you get from that? How was the experience?
Irfon: For us it's been a fantastic experience working with BMW, the key really is getting the right sponsorship at the executive level within those organisations, we've sort of got the very highest level and they've really supported our initiative. The other thing is to be very reasonable in terms of what it is you're looking to achieve when you start off working with an organisation like that, we’re a young startup, we’re not partnering, therefore you need to be really focused on what it is you want to do in a very limited time frame. So we focused on a very simple use case and delivered on that over a 10 week time period and it’s proven to be very successful.
Nick: Will you carry on beyond those 10 weeks?
Irfon: Yep, so it's still live, still going. So we built a wallet, branded by Alphabet (BMWs leasing arm), and that wallet is in the App Stores. The use case is really simple. If you look at it, from a fleet perspective, one of the challenges is maintaining an ongoing relationship with your customer and really understanding how many miles they are driving in their car, and encouraging them to report that, it’s sort of a perennial problem for fleet. So, by creating a really simple smart contract and a wallet and encouraging the driver to take a photo of the dashboard showing their mileage and uploading, that goes up to Alphabet and they receive it over a token. Really simple use case, not relying upon connected cars or autonomous vehicles or anything in the future, it's something to be done now in any vehicle but it’s using blockchain, it’s using a wallet, it’s using a token. I think more importantly the end user or driver doesn't need to know about any of that, they don't need to know what the blockchain is, they don't need to have any of the hassles that would be associated with owning cryptocurrency, they just type in their username and password, download the wallet and take a photo, upload it and get a token.
Nick: And then those tokens, what can they be used for?
Irfon: So they can be redeemed within the BMW ecosystem and that’s how that particular system will go forward.
Nick: As part of your offering you mentioned a lot about a sort of marketplace, how's that going to work? What kind of services are going to be on there? Is it offers from people to consumers for certain types of data, and how do you see that working?
Irfon: I think that, if you take a look at how this organisation and blockchain movement is heading, we don’t need to think about financial systems or the marketplaces that we currently see, as we go forward there is going to be a proliferation of tokens, so right now I think there are about 6,000 tokens out there and that's just growing and growing. The idea is that you'll be able to, within your wallet which will act as a sort of marketplace or exchange, quickly transfer by your thumb one token for another token, by generating value in one area, you'll be able to transfer it somewhere else, the idea is that it can be maintained within a mobility space. The beauty of earning a reward is that, as a consumer, you will have the freedom to spend it how you want and you won't be restricted in that way. I think that’s the bit that gets more interesting, you know you have this freedom of transferring which you don’t have if you're using Tesco club points or Nectar points. So that's one thing, you don't control the environment. The other thing is that the organisations such as BMW, Jaguar and others that we have been working with, who are going to be providing the tokens as a result of some activity, can still use their first party data around the customer and then they are able to provide special bonuses, special events, activities and services on top of the token, specifically for their customer base. So yes the tokens can be liberated and free and entered into any marketplace that's out there. But still there can be special curated pieces of services and content for a particular brand.
Nick: I can imagine it's incredibly powerful for brands as a potential avenue for say car launches or experiential kind of things, to say visit our stand at such and such an event and you'll get a VIP treatment because you've reached a certain threshold, I can really see that actually working.
Irfon: If you start looking at the tokenisation of customer behaviour so, as I say, if there is a car launch then hopefully they can go to that launch. If you want to test drive, you can encourage someone to do that. Again, using simple smart contracts and using that instant process of getting that reward instantly and not having to wait 30 days, you will see if it has updated in your account. That is really interesting and if you add the gamification aspect into the wallet, you can be top 10 or top 20, you can start to have that element of saying I’m top 20 sort of most valuable brand ambassador, in the region in the country or on the planet or whatever that is.
We’re used to that type of thing in games that people play on their phones, playing Candy Crush, it's sort of gamifying you to encourage you to show activity. Then really that's what smart contracts, gamification and wallets and tokens can do. It's just to encourage and nudge people into certain types of behaviour.
Nick: We touched on cryptocurrencies as we’ve been talking. The public's perception is really clouded by last year’s explosive growth in bitcoin and, to a lesser extent, Ether and various other crypto coins. Do you see the DOVU token you’re making as a store of value for speculation as an investor or is it more about an exchange and daily use, how do you see your token?
Irfon: There's a sort of separation needed really between a cryptocurrency, which is designed to replace so called flat currencies and government backed currencies, so using the dollar versus using Bitcoin. We need to separate that out from the token, operating as a utility - something of extra value. From DOVU’s perspective, we’re not a currency, we’re not looking to replace the pound, the dollar or the euro. You're not going to be buying your car in DOVs, you might and will buy it in Bitcoin. That's the sort of separation and I think that the utility aspect of it, sure you can buy one of our tokens from an exchange but you need to be able to redeem that token once you've bought it, for a service or for something else, and it's not just there, sitting on an exchange for speculation. You can't stop that, when something is on an exchange it's nearly impossible to stop that. But DOVU’s business model is to all about earning it, but if you do want to buy it on an exchange then you have that token and its out there to be used in our ecosystem and be more valuable in our ecosystem than just pure speculation.
Nick: So some people may be aware that you were featured in the March issue of Wired Magazine in the UK, talking about your ICO, or Initial Coin Offering. Would you recommend that as an experience for other businesses as a way of raising money? What was the process?
Irfon: It was an interesting process. It's a very new way of fundraising and you have to learn a lot as you go along. Luckily we had some great advisors. We engaged with KPMG early on in the process, we were lucky enough to have Lars Klawitter on board who was on the original Ethereum project board in 2013, but also the ex CTO of Rolls Royce, having some experience of the OEM industry and the crypto-industry. I think it has been pretty unique in that and having some advice and setup from KPMG. Having said that, you then leap into the unknown and you're operating in a world where you have got countries like China banning them, and you have America really unsure about what to do. There's a whole range of political and economic considerations going on there but the key for us really is that, if you’re straight forward and transparent about what you're looking to build as a business, what you're going to use the funds for, we were very confident of the approach.
That method of fundraising isn't going away. I think in the first quarter of 2018 $5.4 Billion has been raised through that form of funding. Pretty much exactly the same was done last year. So there is a huge amount of money coming into it, it's a great way of capitalising your business in a way that you can start thinking about building a business 3 years out. The traditional method of funding a tech business can be very prohibitive, you go through your C-round then your B-round then finally your A-round, and for that you have to focus on some short term goals. Sometimes those short term goals aren't the right goals to be looking at. For us to think about longer term goals and their route of doing a token sale, an ICO, we're not focused on our exit because we've created liquidity as a founder in our business so the age old question is, what is our exit strategy? Which is nuts. I'll be sat there trying to build a business and thinking how I'm going to sell it and I’m encouraged to do that because a venture capital company wants me to do that, they want me to think about that exit. It is very counter-intuitive, and most entrepreneurs just make that up, “Oh yeah a trade sale, it'll be an IPO,I don't know, we will see how it goes.” I don't have to think about that as a CEO, I think about building the business, what will it look like in 3 years, in 5 years, we have enough capital to get our business where it needs to get to without thinking about exit or another fundraise. In terms of the process itself, anybody who has done crowdfunding, it's that but on steroids. It was exciting and I highly recommend it.
Nick: Just sort of getting away from the ‘now’, from those 3 years you alluded to, obviously mobility is going through a huge change. I think conservative estimates are saying that within 10 years there will be autonomous or semi-autonomous vehicles on our roads. What do you see for the future of tokens and the role of DOVU in that future?
Irfon: I think it's really exciting, the idea that if you look at an autonomous fleet or a street with autonomous cars in, then there is going to be a sort of programmatic negotiation between the two vehicles for overtaking rights, I want to go to a meeting and I'm willing to pay to overtake everybody in the next 10 minutes to get there quicker. How do you negotiate cross path ones with multiple OEMs, that sort of negotiation, tokens will play a big part in that because you can offer 10 tokens to every car that gets out of the way and then go down that path. I think that the entertainment that you're going to be consuming, how do you pay for that ? There are going to be lots of transactions taking place, and I think that when you look at blockchain, when you look at smart contracts and you look at tokenisation in order to facilitate that payment. I think that's where this whole type of technology will really blossom and when you tie in insurance, entertainment in the cars, all the other range of things, as I say token, blockchain and smart contracts, you can definitely see that they will fit into that environment.
Nick: It's really interesting when you think of interoperability which is already a problem. I can imagine in the autonomous future that will be a huge headache unless we get some sort of open standard.
Irfon: Yeah, which brings us nicely onto MOBI. So if you are going to have an industry wide, open blockchain initiative, then that's really it. It's a case of creating those standards so they can operate across the multiple platforms OEMs and other mobility providers are creating.
Nick: Obviously that sort of jumps into the future, what about now? I think this year you've said that you're looking at the platform, and building it out, what does the rest of 2018 look like for you?
Irfon: Hard work, I mean its getting back to things, we've had the excitement of the token sale and now it's back to basics, recruiting and developing and working with customers. All the normal things that any startup or early staged business needs to do. So we've got a really strong pipeline of pilots that we are working on. We have developed some really strong use cases and we won't take a pilot on unless it furthers our use cases. But we've got a really healthy pipeline, it's about recruiting really. One of the challenges in this exciting sort of nascent industry is that developers are so hard to find. So it's about getting those individuals excited and fired about the mission that we are on and getting them onboard. My job now is to get that out of the way really, and allow them to do really well.
Nick: Thanks so much for taking the time to talk to me today, it sounds so exciting listening to where you’re taking the business and what's going on, I can't wait to see what you guys are going to come up with.