 in the CUBE office here, I'm John Furrier, the co-founder of SiliconANGLE Media and also the co-host of theCUBE. Our next guest is Jeremy Allman, who's the CEO of PayStand, hot startup, doing some really new things in and around blockchain, decentralized and really targeting the B2B space on a really compelling and an interesting topic that a lot of people are interested in. Jeremy, welcome to this CUBE conversation. Awesome, thank you, John. Hey, so talk a little bit about the company and set the table for us at PayStand. What you guys are doing, why you were founded, and what's the disruptive enable that you guys are taking, what's the angle of your business? Yeah, sure, so PayStand, like you mentioned, is a B2B software platform specifically focused on payment. So you can imagine what PayPal or Venmo does from the consumer level. We do for complicated commercial transactions between accounts receivable and accounts payable departments that normally would be paying with paper checks and a manual process. So basically accounting, ledger, I'm kind of guessing nice fit for blockchain. Correct, yeah, yeah. So what we do is we apply blockchain technology to help a company speed up their time to cash, automate their business process, and dramatically lower their transaction costs. I'll get your thoughts on this. I interviewed Don Tapscott at an event and we were riffing on this notion of the nature of the firm, right? People would come to an office, you'd have accounting, all these things that you'd have to put in place as systems. Now with this decentralized world we're living in, internet and with blockchain in particular and a cryptocurrency market that's pretty frothy, but you go to the blockchain and separate those two for a minute, you really can look at ways to change how work is organized. How do you guys view that? What are you, I mean, it's obviously a new big wave coming. Then you got businesses who are just trying to operate and make money, right? So keep the lights on, but they also have to start rethinking about the future. So what is this block wave, blockchain wave coming? How do you talk about that? Is it that disruptive? I mean, certainly centralized databases aren't going away anytime soon, but it's coming. What's your thoughts and reaction to that? It's coming. I think it will affect the enterprise, which is where we spend our time and space in a lot of ways like cloud did, right? So I've spent probably 15 years doing unsexy B2B tech in some way, shape or form. And what we've seen is digital transformation in the enterprise has happened in a few key areas. CRM is now in the cloud, right? You have companies like Salesforce that have become significant. ERP is now in the cloud. Your financial software is now automated, right? Kind of ironically, the last mile piece, the part that lubricates the business, the core of the business, the money movement piece is actually still really, really manual. So you have humans that sit around and they take an invoice and then a paper check and then they move it. And that process is very, very inefficient. And so having a more automatic smart financial system can improve the business's life in really significant ways. Also, you know, one of the things we've been commenting on opining here on theCUBE is, I made a statement a couple of weeks ago, oh, more tech, marketing technology, wave, all those logos on those landscape slides didn't really pan out because the cloud kind of changes that. And it's panning out, but not the way people thought. FinTech, financial tech is also certainly important. Banks, obviously trading, you see that. What is the inhibitor for these new trends? Because you mentioned moving paper around. I mean, it's money. They probably don't want to mess with an operational system that's core of their business. Is it fear? Is it tech? Both? What's your view on why it's taking so long or is it moving along at a speed you think is going to be adopted? Yeah, it's actually kind of a unique point in time right now. I think in one hand, financial services in general, part of their job is to manage risk. And so they're going to be a lagging in some ways industry. And so digital transformation, right? The internet has opened up and democratized media. It's opened up so many other areas. Blockchain now is the entry point for digital transformation of financial services. And so the time is probably right right now. We've been in the space, we started the company in 2014. And I've seen over the last three years hearing banks, other large institutions, large enterprises go from skepticism to curiosity. What's the technology stack look like? Obviously four years is like decades in the blockchain world. And obviously people are running as fast as they can. It's kind of a moving train at many levels. The business model side as well as the tech stack. And this is really the opportunity. A lot of these systems, I mean some of the e-commerce systems are 20 year old tech stack, some are even older. Just going back four years since you were founded, what's the big moving glacier, if you will, of change and how are you guys managing that? And how should people think about managing the risk of the tech stack? Yeah, I mean I think on the blockchain specific side, in the early days, a lot of it was about currency and actual payment, right? I think what we're seeing now is the opportunity for blockchain, particularly in the enterprise, to actually dramatically improve their operation side, right? So Ethereum, private blockchains, actually have the ability to not just decentralized how money movement or networks operate, but how an internal system operates. I'll give you an example. We use the blockchain to a private blockchain to actually control approval workflow. So when a payment goes out, oftentimes you need your accounts payable person to send a payment out, but the controller or the treasury or someone else has to sign off on it, right? So that signature, you need it to be valid, trusted, the identity around it, right? And you want an audit record. And so blockchain's a really, really good use case for something like that. That's not pure play payments. It's not pure play settlement. It doesn't require a million people to get on. It just can operate in the business in a really critical function in a better way than the current technology does. It's interesting. I love these new technology opportunities because there's always going to be a tipping point and the famous Steve Jobs quote is, hey, if I was asked to build a better phone in 2005, I would have built an excellent, better blackberry. But then he built the iPhones. He thought differently. No one was really asking for the iPhone. The question I get a lot from skeptics in blockchain is no one's really asking for blockchain. So again, this is kind of like, you could always say, I'm building a better centralized database system in a distributed computing environment. Okay, we've done that. Are people asking for blockchain or are they just asking for it in a different way? What's your thoughts today? I would say that there's a big picture question of are people ask for it? And I'd say society is actually asking for it. Part of my personal story is my family, blue collar family, they, my mother's side immigrated here, her generation. And my bricklayer father, they spent their entire lives getting their first home. And 800 square foot home is nothing special, but it was their American dream. In 2008, in financial crisis, they lost a house. And so I think society said financial services and core parts of our economy actually could, we could do better, right? And I think the magic thing about technology is we get to imagine the world not as it is, but as it ought to be. So one, I think society is actually asking for, can the core parts of our economy actually do better? Can we dream up something better? Right, and I think that's the purest part of what the folks in the blockchain movement are trying to do. That's at a very high level. And then I think practically, right? For businesses like we operate day in and day out, if there's technology that allows them to be able to operate their business more efficiently, drop their costs and grow faster, how that worked, right? It's in some ways like cloud. How does cloud work? I think now we're really getting into the deep mess of it, but cloud was transformative to the business, right? VOIP was transformative to some businesses. Inbound marketing is transformative to some businesses. Blockchain is the same kind of concept. I mean, in cloud too, there's a lot of naysayers. I remember I used the first EC2 instances of Amazon when it came out being an entrepreneur, like, oh my, I don't have the provision servers. This is amazing. I can put my credit card down, pay a few bucks. And then even still, up until, I would say even three or four years ago, they were dismissed as relevant. And again, the rest of history, look at what they've done. So there's always going to be those naysayers. But to the point about cloud and blockchain and even crypto, this is a wave. And we're very bullish on this movement because we see the waves coming way out there and it's huge. And this is probably bigger than the other waves combined in our opinion. So you mentioned societal change. This is a big deal. I mean, you're seeing regulations right now in GDPR in Europe, kind of trying to govern an old database market that's even in own problems. It's a mess, database-wise. But it makes sense from a society standpoint. People want to pull their data out. This is a trend. You got societal forces and then technical legacy. I mean, this could be an opportunity for a blockchain to saying, hey, optimize for the new wave. Don't try to retrofit, say an old wave. What's your thoughts? Correct. Yeah, I mean, I think there's a number of areas, even in the data side of society, take an Enron scandal that happened a decade plus ago. Out of that came regulation called Sarbanes-Oxley. And Sarbanes-Oxley's concept is to ensure that companies publicly account for their records in the proper way, that there's an audit trail, that they don't take their financial systems and misrepresent them. The blockchain, because it's a source of truth that's immutable, meaning it can't be changed, is a great way to have more efficiency in that process. Today, there's a whole industry that's popped up just for Sarbanes-Oxley, just to regulate the financial system, just to ensure that the books actually say what they're supposed to say, right? That's kind of the definition of what a smart contract can and should do. This is the really opportunity for entrepreneurs to think about it. I mean, a lot of alpha entrepreneurs are really licking their chops on blockchain because they can see how it could disrupt industries. And this is really, and I showed you some of the things we're working on, what we're thinking about, the silicon angle, about media and data. But it brings out things that we obviously see every day in the press. The election, weaponizing content for bad things. Facebook's having a challenge right now on how they optimize their data for their own self-service reasons. This is a problem, this is a revolution. People are kind of tired, so what's your view of the role of data to the human? I mean, obviously, you know, the cliche, oh, the users are in charge, they should own their own data, okay, I get that. But how do you see that vision playing out? I mean, not just from a Facebook, this is a social network example, but how does data impact a user going forward in your vision because they could really change from the outside in? Yeah, I mean, I think part of what's critical with data is two things. One, identity really matters, right? How do you manage identity? And so I think there's a number of really fascinating blockchain companies that are specifically focused on the identity question, right? And that's true around the social media side, it's true around how do I actually manage where I move identity around. So I think that's one side that's really, really critical to solve. I don't know that we've got a crystal ball yet on what it will ultimately look like, but the blockchain model for identity allows us to rethink the fabrics of what privacy is, what permission looks like, and what trust looks like with people I wanna engage with and with people I don't wanna engage with, right? It's interesting, you have a blockchain culture being more societal and mission driven, my word, you're kind of implying that. I remember when the cloud came out, it was the network guys were in charge and the app guys were like, have to feed off the network requirements and then that seed change flipped around, the app guys are in charge, data's driving requirements for the network. Question for you is, do you see a day soon where societal requirements will dictate technology? I mean, you're seeing that pattern kind of emerging now is kind of not yet been fully thought through in public commentary, but we see the pressure points potentially impacting tech design. Yeah, yeah, I think there's actually a good tug of war balance, right? So entrepreneurs naturally are going to run as fast as they can to see innovation, hopefully with means of improving society, right? And then you have regulators and you have government agencies who are looking and saying, okay, you might be thinking about one myopic view and we need to make sure we're looking at the good of society. So I think that tug of war you saw with the internet, right? Where how much do we regulate the internet, right? And I think the balance was mostly healthy. And we're sort of seeing that true today with blockchain as well where, you know, things like ICOs have good and bad implications. The regulators have been watching it relatively closely, but they also haven't completely came down and clamped down on it, you know, even this week, right, there was a relative balance in the discussions that came out. SCC's done a good job. Correct. They whipped a few people in shape, send the signal, but they weren't foreclosing any innovation. That's correct. And ICOs certainly had some scams. What's the good sides of ICOs? Obviously the scams are out there. What's the good sides? The fundraising, democratization, what's your take on the ICO? Yeah. National coin offering opportunity. You know, I think in some ways, democratization has become such a buzzword. It's lost its meaning, right? But if you think about what it really is, it's so powerful because it's this concept, right, that we distribute power and control to the hands of many. And so, you know, I think there are a lot of public good technologies that actually can use that concept, right? The internet is a public good. You could argue Wikipedia is a public good, right? And so utility type tokens actually are valuable because they can have a dual nature to them. I think the other thing that I'm particularly interested in watching how ICOs evolve is I think there's some danger in ICOs coming in and in the early stage market because early stage companies tend to be, they're so nascent that they need guidance, right? And I actually, I might be contradictory here to most people in the blockchain space, but I actually think early stage investors have a lot of value in that space. And so I am actually fascinated about what happens in later stage rounds and what do ICOs become there? So I think utility and later stage rounds are actually two fascinating areas of ICOs. That's a great point. I would also say that the trend that we're seeing is there is an early stage component that needs mentoring and needs some nurturing. I would agree with that. And that's a classic VC, maybe some token economics in there, but again, different playbook. The tokenization of business is really interesting because now you have token economics being applied to a pre-existing proven business with a disruptive nature on the other side is super interesting. So I have to ask you, are we going to have a chief economic officer as a new role soon? Or is that going to be, because remember you think about token economics, it's about opening up and changing the distribution of our data and wealth. You can argue both was the same, but how do you view that? Because that's a trend we're seeing. The tokenization of a business to disrupt an industry incumbent set of incumbents. Correct, yeah. And I think it's really, really early days and what you have really early stage companies that are thinking about tokenizing their business before they exist, right? And then you have other companies which are maybe past the innovation curve and they're trying to apply tokens to their business. A pivot of an all-existing business. Yeah, so we've seen these right public companies that have added blockchain to their name, right? I think the fascinating thing will become where fast growing real businesses where there's a there, there, they've crossed the chasm, go, okay, how do we apply tokenization to our company? And how do we think about it from both a commercial economic part of the business and then how do we think about it from tokenizing the business? And we haven't seen many cases yet, but I actually think that's one of the next waves. We'll see. Great insight. I got to ask you on a personal level, you're doing some talking, obviously the founder of the company, CEO, what's going on? What are you talking about these days? What are you passionate about? I know you're talking to some folks that using your center, Barbara, you mentioned, go another to teach down there. What are you talking about? What are you sharing publicly? What's on your mind these days? Yeah, I mean, I think I'm personally deeply motivated every day by waking up and going. The financial service industry, it can go through a massive transformation, right? And I think there's a lot of really good companies that are doing that at the consumer level. And so, I think our space, we have a unique place in time to be working at the commercial level. So the commercial level affects big parts of our economic infrastructures in ways that we don't think about, right? The Equifax breach was a pretty big deal to people, right? The financial crisis was a big deal to people. So how do we imagine those kinds of industries, right? Supply chain, title, logistic, right? And how do we think about those industries democratizing them with blockchain? Those to me are the unsung heroes of what blockchain will ultimately help transform society. It's interesting, you said you were kind of humble when you came on earlier. I'm in boring areas of B2B, but I got to say to see your point about cloud earlier, there's a calm before the storm, these boring areas that are, they come, are really the grounds where you see disruption. I think that's an area, not just high frequency trading, that's going to be always an issue, but in terms of real financial plumbing. Perfect for a ledger, perfect for those things. Okay, explain, take a plug for your company. How are people using you guys? What's the value proposition? What are some of the things that you guys are involved in? How does someone engage with you guys? Give the plug for PayStand. Yeah, so at PayStand, we tend to work with companies where there are high volumes of paper checks in the process, right? So if you have a $100,000 invoice that goes out, for example, with a company that you've been working out with for a decade, and you have a contract that says it's a net 60 contract, right? The challenge is, it's paper check, you want to move it digitally, what do you move it digitally to? And the reality is consumer payment companies that are focused on credit cards are not really an ideal solution for that, because their business model is a percentage business model. There's nothing wrong with a percentage business model that charges a company two or 3% if I'm swiping for a $5 cup of coffee, right? If it's a $100,000 payment that I owe someone that I know and I have a contract terms, I'm not going to pay the bank $3,000 to move ones and zeros from this bank database to this bank database, right? So what we do with our network is we make that money movement fast, instant, automatic, verified, validated, right? With control in a way where we can automate the process. It's so funny what jumps in my mind is punch cards to computers, tape to storage. This is interesting. So the paper checks probably big. I don't know what the numbers are. You might have them handy. People are doing paper checks. So you're building a system around paper checks. Did I get that right? Yeah, so we digitize what would have been a paper check. Today over 50% of all commercial payments are still done in paper check. So they're gone in our digital world, right? Like you and I, we Venmo each other. But when the business goes to write a check, when they get an invoice, they send out a check. And so we digitize the whole process. The moment that the invoice is ready to go to the moment it gets in the bank, it all becomes digital face to face. And the alternative is what? I got to go check when it was mailed, was it received, was it cashed? Did it get put into the accounting system? And that's kind of- That's correct. That's the manual. That's the manual. They'll spend a week tracking down the payment from the moment the controller says okay to pay to the time it sits in their bank account. That's humans, time, money. An old antiquated system that doesn't change because of what? Well, it's legacy infrastructure in one way. But in another, even the banking infrastructure, right? The most of the banking infrastructure that are for commercial payments was designed in the 60s and 70s. And last time I checked the 60s and 70s was before the internet today. So they weren't really designed for digital real-time payments and they weren't designed for commercial use cases like today. Is fraud a factor? Is that not a factor? Is that part of it or yes? Yeah, I mean, I think a key thing with what we do enterprise payments is security is really, really important, right? We take it very, very seriously. And this is again, one of the downsides to the legacy commercial infrastructure is when you have a check, right? You have this checking and routing number on it. Anybody who takes that, in theory, that's all that identifies you and your company and your account. And so money can actually be moved and ran against in that case. With a network like ours, we can validate that you are who you say you are. You have the money in your account and moved when it should and you've actually authorized it, right? These are all things that we should know but we just don't. And you put the data around it, you take that payload, AK check, put it into the system. Okay, so when does a company want, should be calling you? Was it like, I'm overloaded with paper, I want a new system, I'm doing a refresh. I mean, when do people call PayStand? What's the signals that would give your buyers some indicator of time to call PayStand? Yeah, so generally it's after, it's when they have high volumes of checks and they're growing and or that they've basically taken their ERP and they've done an ERP cloud migration, right? And so now they've got their general ledger and that financial system is not in a shoebox anymore, right, it's in a critical core ERP system. And so what they're finding is they bought digital transformation for financial services and their accountant only sort of has half the solution, right, and so they come in and they use us to close the last mile. Okay, so I'm gonna put my naysayer hat on and ask you the question. I love it, but what's this blockchain thing? I'm an accounting guy, took a one computer class or whatever, I get blockchain. How do you stay up to date? How do you ensure that I'm gonna have a system that's gonna be working and know that blockchain standards are changing? How do you guys mitigate that? How do you handle that question? Yeah, I mean, I think the critical thing for our customers, right, is for us, our customers, money moves in dollars, right? It leaves their bank account and goes into their supplier's bank account. The supplier's bank goes into their customer's bank account, right, their financial system does not change. We're actually very, very sensitive to that. We think about this very different than a consumer solution, which is consumer solutions almost have a critical mass question. They need everybody to get into the system for it to work. For commercial, you don't actually want to change the business process of your partners, right? It's really important, they've been doing this. So we are very thoughtful about our software, doesn't change business process, it doesn't require you to enter into some kind of new economy or new currency. You simply do what you're always doing with the systems you're already using, right? And we just digitize the process to make them faster, cheaper, and automated. Awesome. Talk about your goals for the year at PayStand. Were you guys at company-wise, funding, goals, hiring, what's going on? Give a quick final word on the company. Yeah, I mean, I think we're blessed right now, I would say we're one of, if not the fastest B2B payment companies, fastest growing B2B payment companies today. So I think we have a long way to go where, I would call this inning two for us, right? We ultimately, I think much more about what does 10 years look like than 12 months look like because this is the beginning of the commercial financial service wave. And so I think we ultimately believe that digital transformation is going to reinvent our industry. And if we can go lead the way, we'll be very happy. And for us, that just means to continue growing, continue serving our customers, continue hiring. I think if we do all that, right place, right time. Awesome, final question for you. The folks out there watching, you're an expert in the industry again, FinTech as well as computer engineering. If my sister who is not savvy says, Jeremy, what is blockchain? Well, how would you describe blockchain to someone who's interested and needs to know the importance, definition and the importance of blockchain? Okay, so blockchain to me is basically a way to be able to take information like you might have on your textbook or you might have in a spreadsheet and use it where anybody can access it in a way that's actually easily controllable, visible, secure and automated. That doesn't sound very sexy, but the important thing is how we keep records affects all of society, right? We have records of who owns our houses. We have records of how much money we have in our account. We have records of who did we vote on, right? Those records are the foundation for our society. Currently, companies own those records. Companies are fallible, right? And so what blockchain does is it allows us to make a more infallible system to keep access to those records you and I care about. And this is an infrastructure opportunity, not so much cryptocurrency, kind of a distinction between the two, right? That's right, that's right. I would say cryptocurrency and money is like the first pillar app on top of blockchain. Jeremy Almond, CEO, founder of PayStand Hot Company, doing something really good in a growing, changing market called checks, paper checks, and if you have them and grow and digitize them, great entry strategy for blockchain. Thanks for coming on this CUBE Conversation and thanks for joining us here in Palo Alto. I'm John Furrier in the CUBE Studios for CUBE Conversation. Thanks for watching.