Looking for Ways to Improve Society? Try Applying the Blockchain!

interview soichiro takaoka socialgood

No matter how mercantile or selfish we become, there is always a part of us that longs to affect the global scene. Humans are not just consumers but creators, and the creation of a perpetually better environment for local and even global community is something our ancestors and us have all contributed to. Still, there are a lot of problems in our modern world that should be addressed, so there’s plenty of room for the singular person to help many. It’s just a matter of determination and convenience. Speaking of convenience, today we have Soichiro Takaoka, the founder of the SocialGood Project, and we’ve had the wonderful opportunity to talk with him about his project. So let’s read further and see how we can actually make a difference!

Good day to you, Mr. Takaoka. First, we want to congratulate you with your recent achievements. $30 million of investments and 33,000 of active users seems like a pretty great start. We figure that we’d start this interview off by asking you a little bit about yourself and your team at the SocialGood. Could you tell us more about the team, and you as the founder of the project?

As the founder of the Social Good Project, I started a fintech group in Japan, aiming to resolve social problems in 2005. Since then, I have been in the fintech business for 13 years. My online marketplace business, exclusively for the wealthy class, started in 2006 and has grown to reach $10 Billion in total assets of member individuals, the size of which is the largest in Japan. I also started a registered Japanese financial services agency. Investment contracts for the company reached more than $900 million at the end of 2017. Hence, the company became the number 1 Japanese investment advisor for individuals in hedge fund investing. My achievements were reported by well-revered journals such as the Wall Street Journal and Forbes.

My team is made up of experienced professionals and experts such as ex-CITI executives, ex-Rakuten executives, the ex-Nikko Securities Managing Director, a prominent university professor, as well as a renowned blockchain technology expert.

Now with the personal part of the introduction out of the way, we want to focus more on the project itself. What kind of background does it have? Can you present some kind of retrospective on its development up to now? Why have you decided to focus your resources on building a “Business-to-Client” matching system? Also it seems that the project has some deep Japanese roots. Do these cultural characteristics affect its shape in some way?

I joined the firm MITSUI & CO after I graduated from Tokyo University. MITSUI & CO is one of the biggest Japanese trading companies who’s adopting the Sogo-Shosha system. “Sogo-Shosha” always holds a kind of proactiveness to create a business for social contribution. Before MITSUI, I used to devote myself to volunteer activities in Mother House of Mother Teresa because I wanted to contribute to society. I think this wish led me to MITSUI. At MITSUI, I did a Mergers & acquisitions (M&A) and business incubation. After that, I left MITSUI to start my own business.

The online marketplace business “Yucasee,” for the wealthy class, is one I started in 2006, I expanded to reach $10 billion of the total assets of individual members. Then I thought that the idea of social contribution would help society, so I spent resources to enable social contribution using a point program which would have scored users’ activities in SNS (i.e. friend invitation and posting) and users could get donation points in accordance with the score. However, it turned out to be complicated and expensive. At the time, I found that the use of AI and blockchain technology may lead us to a certain kind of solution, but I didn’t know how. Meanwhile, Yucasee clients asked me to provide them with financial advisory services, and I started it under the Japanese financial service agency license. Then, I came up with the idea of the mixture of investment and social contribution, which is Social Good Foundation. First, I construct a blockchain economy where you can increase consumers’ assets (fortunes) and corporations’ revenues at the same time in a sustainable way, and I add a mechanism in which you can automatically donate a potion of such an increase to those in need. That is what SocialGood is all about.

socialgood

Oriental cultures are considered to be built on the concept of a greater good for every citizen and a balance in all things. In this regard, your goal of improving society seems to be noble. In what way do you plan to achieve to it? In terms of methods and effects specifically? The redistribution of values have also been an issue. Do you think you can handle it better than all of those governments who are also trying? What about any possible collateral damage? Could the growth of the SocialGood token induce some economic disadvantages for those who would not use it? Generally speaking, what do you see as a successful social development program?

The concept is that the more you do the things you like, the more you make society better.

In the Social Good Ecosystem, all you need to do is to buy anything you want. Then, the social contribution automatically goes to a charitable organization in a way that you can obtain the maximum level of accomplishment and satisfaction for you. The more consumers buy at member shops with legal currencies, the more they can donate via SocialGood automatically.

Simply put, an AI algorithm chooses the best charitable organization for you that is deemed to get more “likes” on a social news outlet (such as Facebook and Instagram). I think that this system seems to be more democratic and smoother than income redistribution by government.  The most troublesome weak point in the capitalism is that the pursuit of selfish desire and behavior will create unbalanced wealth distribution and the absence of diminishing social cost. I think the Social Good Ecosystem will help society resolve such social issues.

It might be worth mentioning as well the fact that you announced that your project has no competitors within the blockchain industry. But would considering old, conventional players to be out of league a bit hasty? With projects of such a grand scale like SocialGood, you will need some time to truly realize your potential on the global scale. With time at their disposal, they might try to enter blockchain and come at you… or would they? Also, what about all of those blockchain projects oriented around specific industries?

I believe that the business vision of SocialGood is universal and will develop enormously because it has, for instance, earned 30,000 users in the last two months.

I think our competitor is a cashback platform business. We are, on the other hand, a smartphone cashback site through cryptocurrency. First, holding SocialGood at the time of purchase is the condition of being rewarded with cashback. And then, when those consumers holding SocialGood tokens buy at member shops with fiat currencies they can get cashback with SocialGood.

EBATES, a large online cashback site in the US, has more than 2,000 companies registered with it. It is growing rapidly at the rate of 45% per year, and the 2017 transaction volume totaled $9.7 billion. The SocialGood Marketplace is the evolution and enhancement of the cashback system, including not only electric commerce but also real commerce that utilizes smartphone-based UI/UX and blockchain technologies.

Alliance member companies considering to participate in the SocialGood Marketplace do not have to pay any initial fee and operating cost. In this regard, the SocialGood Marketplace will not be in “tug of war” with EBATES. On the contrary, we will contribute to expanding the market as the cryptocurrency derived cashback platform on top of EBATES.

We have submitted a series of Token Ecosystem International Patents (cashback and donation related) based on blockchain-based technologies. We think that such action will give us strong intellectual property protection, which will not allow others to be our competitors at all.

You may ask me what if someone comes forward and offers me “I want to buy the Social Good Project”. Well, first, I refrain from talking about things like the Token Ecosystem patent and intellectual property because that is a different story. But, if you want to buy the growth potential of the Social Good Ecosystem, all you need to do is purchase the SocialGood token at exchanges. For example, if you are a big EC Site, buy SocialGood, and use it as point giveaway on your site. It will help the Social Good Ecosystem grow and do the value of SocialGood rise.

Business-to-Client business model is something we witness in our everyday lives every time we’re interacting with a merchant or a service provider. Still, it’s that inner side of the business that we know nothing about. By this we mean the internal mechanisms and guidelines, unwritten principles, and modern trends. So could you disclose some of these? We don’t want you to share trade secrets of course, but a discussion about the intricacies of the market with the experts is something always worth listening to.

The Customer Acquisition Cost for manufacturers and retailers is 10 to 15 percent of selling price.  This is the source of funds for cashback. In real estate business, the transaction fees are 3%, in which 1% is to be paid for introducers. That will be a cashback source, too.

Luxury corporations stay away from discounts because it hampers their brand. Cashback through a third party, on the other hand, is accepted and well-perceived by consumers. That will bring both consumer and business a win-win.

interview soichiro takaoka

Next, we would like to talk about the principle of your donations system and overall data analysis usage. How could you ensure that these funds get into the right hands? There are a lot of misuse cases out there, even one with Greenpeace involved. So with this in mind, how can you insure that these funds will be used for good deeds? And what about the data you gather for your project? As aspiring machine-learning acolites, we would like to know what kind of systems do you wish to apply to this task and what beneficial results they might bring, both in terms of optimization and data research?

I think the Social Good Ecosystem can make use of “big data analysis” to find institutions naturally in order to automatically carry the people donations to suitable charitable organizations. That’s it, and beyond that, namely what each charitable organization would do after its receipt of donation is their issue. In other words, our ecosystem is simply engineered to achieve finding a good, charitable organization for donations to maximize self-satisfaction of a consumer and automatically donating a portion of cashback to it:

1. The consumers use the Social Good Ecosystem for shopping.
2. A part of their payments automatically go to donations.
3. The SocialGood administrators are in charge of doing donations on behalf of the shoppers.
4. The AI is used to select organizations receiving the donations to maximize the satisfaction of the shoppers.

If any charitable organization were to go against what it would advocate to do, it would simply get paid back with a bad reputation, and such an organization would end up with being excluded from the algorithm automatically. This cycle will work in a kind of self-sustaining way. As a result, I believe that the charitable organizations that everybody admires will always be chosen to receive donations.

Let’s get a little bit technical now. Your token is based on the ERC-20 platform. Why have you not to build your own? Is it more cost efficient? How can the issues with scalability be solved? Also, it’s a rather common practice for projects to present open-source code versions for the general audience to check. Will you participate in this practice? We have also read about you payment platform. Could you tell how this one will be realized? With so many blockchain projects present, don’t you think that there has to be some kind of general payment mechanism? Would fintech blockchain companies have to collaborate in order to create a common payment platform?

The token is based on the Ethereum ERC-20 Token Standard. Further technical development steps, such as exchanging tokens among ecosystem participants and incentive programs for token holders, are considered to be made functional at later stages. As we have already submitted a patent application of the core token ecosystem, we believe that we can expand alliances with many IT partners based on that. We intend to co-develop the next stages for the ecosystem with a prominent information technology partner after the ICO. This is what we call an “Open Innovation Alliance Strategy.” In accordance with this strategy, we pursue the enhancement of alliances with worldwide trustworthy big companies. I think it is similar to Proctor and Gamble’s “Connect + Develop” program.

With the need to establish lots of alliances, it seems that the pool of tokens dedicated for those needs has to be quite significant. So even through those with large pools of tokens are dedicated to the actual growth of the platforms, it still seems that the team leaves a big chunk of the pie to itself in terms of control over the ecosystem of the platform. How much actual power will the team weild and how will the  decentralization of the platform be preserved? What is the role of community in terms of platform growth? Could their own actions bring some changes to its base structure as well? Also, returning to the fourth question, we would like to know how eager companies are in receiving benefits and revenues via cryptocurrency, and how is this regulated in terms of legal compliance?

Alliance member companies in the Ecosystem need to buy SocialGood from the market and/or from the Social Good Foundation Inc. to meet with the demand of cashback as they sell products and services in there. Tokens are reserved for the team in order to meet with such demand. Token supply, in the meantime, will be controlled in a careful manner not to block the rise of token prices. In a way, such functionality can be deemed similar to that of a central bank. Whereas the money supply by the central bank is theoretically unlimited, therefore fostering the fear of inflation, the issuing amount of SocialGood is limited. This will drive the value of the SocialGood token to rise.

As consumers buy things and services in the ecosystem, they will keep receiving SocialGood because of the cashback. If they intend to sell SocialGood, all they need to do is sell it at cryptocurrency exchanges, complying with the rules and regulations involved in each region and country.

interview socialgood

With such lofty ambitions, it seems as though your project truly has a long road ahead. What good would a trip be without a map, though? A roadmap, specifically. So, while the nearest schedule is filled out for you, it would be nice to know when you do plan on releasing SocialGood. Will there be some alpha or beta testing? Do you have a long-term roadmap with plans detailing the next decade or so? How do you expect  your project to look in the future? With all this discussion about planning, we would also like to know how your cash-flow chart is built? What expectations and hypotheses have you used for its creation?

We intend to increase our user base through the ICO. Since the project has piled up 30,000 users in the last two months,. I think the pace of the increase is faster than other ICOs. Based on this achievement, we are going to leverage our resources to expand to Alliance member companies. Evidence of this momentum is that the total sales of Alliance corporations at the end of April this year has already exceeded $2 billion. Keeping that in mind, we aim to exceed the total “market cap” of Bitcoin in 2020. We are going to build up the Social Good Ecosystem under the following timeline.

We are scheduled to list SocialGood on the exchanges in and outside of Japan at the end of December 2018. During the cloud sale beginning in April 2018, we will be announcing the SocialGood Alliance companies. We will also discuss the system specifications of the ecosystem mechanism with Alliance companies to settle on agreed specifications by December 2018.

After listing SocialGood on the exchanges, we will continuously announce Alliance companies joining the ecosystem. This will be material information for the token listed on the exchanges. By doing so, we intend to enhance the liquidity of the SocialGood token in the market. By March 2019, we will start the cashback business and will construct the total framework that enables SocialGood token holders to receive benefits. In 2019, we will complete the efficient real-time cashback system by connecting flows of cash back into the blockchain. We will also construct an automated donation network supported by AI in 2019 with approximately 100 social contribution organizations. With this project, the value of SocialGood is important. Accordingly, the size of the ecosystem is important because it influences its price. Therefore, we will measure the total revenue of all Alliance companies as the Key Performance Indicator (KPI) and will release it on a constant basis. The projection of KPI progress will be as follows: First, the sum of the GDPs of the 21 countries in which we plan to develop the ecosystems is $59.8 trillion. Of this amount, we plan to integrate $20 billion by the second half of 2020. We also plan to approach institutional investors and encourage them to invest in SocialGood as an ESG investment.

Seems like our interview has suddenly came to its logical conclusion. Let us thank you again for your answers, we hope our readers will find them entertaining and helpful. Good luck and till next time!

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