“If you look at blockchain, DLT in general, my best guess is that 10 years down the road, only less than 30 per cent of the market of the applications will be on DLT”

He started his first business at the age of 16 when the word ‘startup’ didn’t event exist in Italy, and later went on to build/operate a total of 19 businesses in 24 years across Europe, Southeast Asia, the Middle East and Africa. But Stefano Virgilli is not finished yet, and his fervour and curiosity continues to drive him into uncharted territories in the blockchain, cryptocurrency and ICO spaces.

A TEDx speaker, Virgilli is a regular speaker at various international events. He has also held the roles of mentor in Riyada (Public Authority for Small and Medium Enterprise Development of Oman), Special Advisor at Zubair SEC (SME Incubator), and Industry Advisor with the Middle East College. Virgilli is an avid traveller and connoisseur of the cultures of the world and his goal is to cover 100 countries by 2025.

In an interview, Virgilli walked e27 through his journey, current projects, goals and his views on the steaming blockchain and ICO industry.

Edited excerpts:

Your profile says you have built 19 businesses in 24 years. How old were you when you started your first company? I assume that the startup ecosystem did not exist then.

So, the first business I started when I was just 16. I was in Italy and it was an advertisement agency. That time I was a host at a local radio. During my hosting, I could hear ads being played, but I found them boring. So, I proposed to become a recorder of ads. The radio station gave me the green signal.

I started selling small ads for the radio; it was a small and medium enterprise in my town in Italy and sooner than I knew, I started doing it for cinema, newspaper, and magazines. I was selling advertising.

The word ‘startup’ didn’t even exist when I started my first venture. It was 24 years ago, and it was just a normal business.

Let me make it clear that to me startup is a business, and I always focus on the business side of any venture. In general, I would say that any business surrounding the area of technology could be considered a startup, like, for instance, VOX, an ICO advisory company. We have served 11 ICOs for different services so far. Most of them are still in progress and the idea is to leverage on my 24 years of marketing experience in helping ICOs enter the market.

Also Read: Should more traditional companies embrace blockchain technology and tokenization?

When the startup word started becoming a buzzword, I was already living in Singapore. The first time I started hearing about it was in 2009-2010. At that point in time, Singapore decided to become a startup attraction point.

That time, they were not talking about ICOs, of course, but I remember having met startups, some of which went into it because, to tell you frankly, it’s just another way to find a job when someone is not hiring. Everyone is an entrepreneur as long as nobody pays you salary. It was an easy and convenient way for some of those folks I talked to, but they didn’t even have a good idea at all to start with.

But as long as you have external support — the government of Singapore is doing a fantastic job in supporting startups — then it triggers the attention of the investor/investment funds.

Obviously startups fail, but we should not forget that every business fails. Restaurants fail, bars fail, real estate companies fail.

What keeps you motivated, and how do you look at your evolution over the past 24 years?

I look for opportunities. The businesses that I have built, they come from opportunities. Wherever I see there is a space, I set up a business and as you can imagine most of them aren’t successful. There’s a few that were successful.

In a TEDx speech, you talked about ‘how to sell milk to a cow’. What does this metaphor mean? Have you ever managed to ‘sell milk to a cow’ in your 24 years of career?

In the year 2000, I set up an insurance agency in multi-level marketing. There are two things people are scared to pick their phone when someone calls. They are: one, when you say ‘bro, it’s a multi-level marketing company’; and two, ‘bro, it’s an insurance agency’. They soon hang up their phone. I think these are the two worst things that you can do to the mankind.

However, I managed to sell 29 insurances and get a team to sell insurance in multi-level marketing. I think that was pretty much selling milk to a cow, because it was very hard.

It’s not that you don’t sell the things that they don’t need. In fact, 99 per cent the people that I called told me ‘no’ and they didn’t buy from me. However, I just carried on doing it until I found some other ones.

Now, let’s think from a different perspective. Certainly, you cannot sell cow milk to a cow, but you can still sell goat milk to a cow, right? You should always put things in different angles.

Having said that, the challenging part is to identify that opportunity. For instance, with VOX, we offer investor relations services and I think we are probably the only ICO advisor in the world right now, who does not charge success fee, cryptocurrency or tokens from the clients. This could sound weird.

When I started pitching it in a conference in Prague, I met 10-15 people. They all told me it’s weird. We don’t want that service. But all of a sudden, they get it, they understand it and now I hope I can set the benchmark for better ICO advisory by implementing these three simple things.

I don’t want to use tokens because if you pay your advisor in tokens, they want to get rid of them as soon as you list them. So, they dump it. No cryptocurrencies either, because in the end, an entrepreneur has to have the responsibility for the employees and make sure that when you pay, the salary sticks to a value. And number three, no success fee because I was brought up with this mindset from my parents.

My parents would give me 50,000 liras (about US$10) to clean the backyard. Now with a $10 bill, I could make a masterpiece.

In ICO, if they tell me if you attract investors then I will invest a million dollars, I don’t care. I don’t put any effort in it. But if they tell me here is US$5,000, connect us with investors. Then, a minute after, they will have the investors.

So, you have been advising many companies on ICO. How is your definition of ICO different from that of the traditional one?

ICO is like producing a movie. I don’t place ICO in the industry of finance, but I place it in the industry of entertainment. And so, I say that as much as you need a whitepaper for an ICO, you need advisors for an ICO, you need actors for the movie. And for the investors in an ICO field, you need a producer for a movie.

You take a very boring script, like, for instance, Transformers, you pass this script to a guy like Lorenzo di Bonaventura, and he transforms it into a commercial blockbuster. He was able to sell US$1.1 billion in tickets.

ICO has the same logic. You can sell tokens on an idea or a horrible script, just because you have the right producer. I bring up a lot of movie references that were not so exciting, but they managed to earn a lot of money. For instance, they will tell you Transformers made US$8.7 million in box office on a single day, people would say: ‘wow, I must go and watch it if everyone is going’. In next hour, it raked in US$16 million.

ICO advisor does the same thing. I advise 40 ICOs. What do I do for them? I put my picture on the whitepaper. Is that advising? It’s just appearing, not advising. Any if they need my help, no matter what time it is, I will respond. Their time zones don’t matter to me. And I present them with written reports. The whole team is involved in advisory.

Blockchain is considered a path-breaking technology. Is it for real or is just a hype? What is the future of this tech?

Most important thing I want to say is that to me blockchain is finished. There’s nothing interesting about blockchain any more. Blockchain already became old by last November.

Blockchain is a category of a technology called distributed ledger technology (DLT). Indeed, DLT and blockchain are not the same. It’s like daddy and son. Blockchain is the son of the DLT. Same as Tangle, same as Hashgraph. There are other technologies and blockchain is slow, non-scalable and is not safe.

Today, I was reviewing a whitepaper. A customer from the United States put the whitepaper on the table and told me blockchain is safe. No, it’s not safe. Safe on what criteria? If I send you one Ethereum, and instead of copying all the characters, I make a mistake. My transaction is recorded on the blockchain, but it doesn’t go anywhere. The funds are lost forever.

Also Read: Singapore is warming up to blockchain but many challenges remain, say experts

But if I send you US$10 with my bank account and they write it down wrongly, they return me the money. Assume  someone clones my credit card and spends US$14,000 overnight at Target while I am asleep. When I wake up the next morning and go to the bank, they will say we have insurance and we will refund you. So, I love banks and I love Visa.

But with blockchain, if I try to send you US$1 worth of bitcoin on any online trading platform, it costs me way more than that to send it. It is multiple times the cost of the transaction. But people still complain for three per cent charged by Visa.

So, my point is that blockchain is not cheap, it’s not safe, it’s not scalable and it’s very slow. If a human being were to develop using the blockchain concept, then one cell cannot develop until you have embedded all the other cells before — a human-being takes a billion years to develop in full. With other technologies that are comparable to blockchain like Tangle, like Hashgraph, it is much faster and much more efficient.

But why people are so bullish about blockchain? How do you view companies’ overeagerness to embrace this technology?

Look, there is a big factor in propaganda. There was a movie called Fitzcarraldo produced by Herzog in 1984. If I recall correctly, he said that by 2004, there would not be the Amazons in South America anymore, and that it would be gone and wiped out by Industrial Revolution. This was the prediction 20 years ago.

Now, you look to the present. If someone tells you the same, you will laugh it off. It’s ridiculous because the Amazons is still there prospering with so much wildlife. But at that point in time, everyone was so bullish and passionate about saying that the world was going to end. It’s the same logic with other social propaganda issues.

Cloud computing is another case in point. About 10 years ago, everyone was advocating cloud computing. Ten years down the road, only 50 per cent of the market of application is on the cloud.

If you look at blockchain, DLT in general, 10 years down the road, my best guess is that less than 30 per cent of the market of the application will be on DLT. Because still, maybe, a new company doesn’t start the server-side application anymore. But because they are operating a server-side application, it doesn’t mean that tomorrow they’re going to develop a DLT technology. They didn’t do it for cloud for 50 per cent of the world application because the moment you change technology you have to change your environment, your developers, your customer service, your hardware, your software, your salespeople — everything is different. That’s why banks cannot start a blockchain-based bank account.

So do you mean to say that blockchain cannot make banks obsolete, unlike several experts claimed?

I hear all these young speakers on stage say that banks have slowed and they are like dinosaurs. You should keep in mind that banks know more than many other people do, because they have the money to buy the knowledge. That’s why they don’t jump on board as fast because they perfectly understand it is absolutely impossible for a bank to simply press a button and switch your bank account to blockchain. They can’t do it.

So, they will have to start with other products, parallel products, some of which might not even employ blockchain technology.

The post Interview with Stefano Virgilli (Part I): “Blockchain is slow, neither safe nor reliable, and is already finished” appeared first on e27.