Timothy Ruff: The Difference Between a Use Case and a Business Case

Today’s guest is Timothy Ruff, General Partner at Digital Trust Ventures. Timothy is an early pioneer of self-sovereign identity as a co-founder of Evernym, a co-creator of Sovrin, and an advisor to several IDtech startups. Timothy has countless battle scars from being on the ground floor of so much innovation in the decentralized identity space.
In this episode, we discuss the difference between a use case and a business case and how to bridge the gap. We also talk about the humility required to change your mind about your idea when you’re wrong. And one of the most pivotal things Timothy has changed his mind about in recent years is that blockchain isn’t needed for SSI. We close by talking about where Timothy thinks the most ripe path to verifiable credential adoption lies in the near term.
Multiple resources for SSI entrepreneurs are recommended within the episode and are listed below:

• The Cold Start Problem - Andrew Chen (Book)

• Running Lean by Ash Maurya - (Book)

• Disciplined Entrepreneurship by Bill Aulet - (Book)

• Without Their Permission by Alexis Ohanian - (Book)

To reach out to Timothy, email him at timothy@digitaltrust.vc
Reach out to Riley (@rileyphughes) and Trinsic (@trinsic_id) on Twitter. We’d love to hear from you.

Full Transcript

Transcript lightly edited for clarity.

Riley Hughes: Welcome to the Future of Identity podcast, where we talk to the people building the ID tech products of tomorrow. I’m Riley Hughes, co-founder and CEO of Trinsic, and we build infrastructure for launching awesome identity products. In this episode, I’m joined by Timothy Ruff, general partner at Digital Trust Ventures. Timothy is an early pioneer of self-sovereign identity, as a co-founder of Evernym, a co-creator of Sovrin, and an advisor to several ID tech startups. Timothy has countless battle scars from being on the ground floor of so much innovation in the decentralized identity space, and he shares a lot of those things openly with us here. In this episode, we discuss the difference between a use case and a business case, and how to bridge that gap.

Riley Hughes: We also talk about the humility required to change your mind about your idea when you’re wrong, and one of the most pivotal things that Timothy changed his mind about in recent years, which is that blockchain is not only not needed for SSI, but that verifiable credential companies will all move away from blockchain within the next couple of years. And we close by talking about where Timothy thinks the most ripe path for adoption lies in the near term. This is a great episode for anybody building in this space, and I hope you enjoy it as much as I did. How are you doing, Timothy?

Timothy Ruff: Yeah, doing great, Riley. Thanks for having me on.

Riley Hughes: Yeah, I’m excited to have you. There’s few people on earth who’ve spent as much time thinking about these topics as you have, so I’m really glad that you’re here willing to share some of your insights.

Timothy Ruff: Happy to. A lot of battle scars.

Riley Hughes: Yeah, your career in identity seems has spanned maybe a few different chapters. I know you were the co-founder and CEO of Evernym, raised tens of millions of dollars there. We’re a co-creator of Sovereign. And because of your affinity for launching and starting new things, ended up transitioning into a role with Digital Trust Ventures, where you launched a couple of startups, one of which was acquired by a major company. And then most recently, you’ve seems like been spending quite a bit of time working on organizational identity as a concept and talking about that. And so I’m excited to maybe explore all three of those areas and the different battle scars that you’ve learned there. But if it’s all right, let me start with one thing that I say a lot that I got from you, is that a use case is different than a business case. And just because you have a use case does not mean you have a business case. Could you explain what you meant by that five years ago when you said it, or whenever it was, and maybe expand on that concept for the audience?

Timothy Ruff: It’s really easy to imagine a future state where everybody is interacting in this new way. Once someone understands verifiable credentials, self-sovereignty, the idea that people can carry around their own credentials and connect directly to other people and have and control their own relationships, it’s really easy to sit and think, oh, I could finally have one master contact list that’s all my contacts. Instead of having my own copy and you have your own copy, when I change my address and I move from one location to another, I could just change my master address and everyone who I allow to subscribe to me will have it. There’s a use case, right? One master set of all of my contacts. And even the companies, even government, anyone who interacts with me subscribes to me, and I control my address. And that’s just for address. It could be many other things. So there’s an example of a use case that’s really easy to talk about and it’s fun, exciting, solves a lot of problems. But that doesn’t mean that there’s a go-to-market opportunity for someone to make a business around that.

Timothy Ruff: Now, there might be, but it might be something that just Apple can do, or Google, or it might be something that requires broad adoption of the underlying technology before some third party can come in and bring something and take advantage of that and start to introduce that to the world. And unfortunately, it’s probably a hundred or a thousand to one, the use cases that we can think of in this new world compared to the places where an entrepreneur or even an intrapreneur inside of a company that’s trying to bring a product to market can actually find a way to bring it to market, bring it to market, make money. And if you don’t make money, you don’t have a business. You don’t have a business. You can’t bring something to market. It won’t exist yet. So unfortunately, we are bound by the laws of business to get something into market so that we can have this wonderful future, this self-sovereign or decentralized identity future. That’s the challenge. People come to me all the time with use case after use case after use case, and I challenge them. I’m like, Well, who’s the customer?

Timothy Ruff: And I challenge myself. I’m not trying to be rude. I’ll challenge anybody on the same line of thinking as, Who’s the customer? Who’s going to buy it? What problem does it solve? How much is it going to cost? And who’s going to charge money for that, and why? How do you justify that?

Riley Hughes: Yeah, those seem like pretty straightforward, dare I say obvious questions. I’ve had to go through this as well and have had to ask myself and challenge myself and others on this many times as well. Why do you think that is? Why do you think many of us need to be asked, Who’s the customer?

Timothy Ruff: It’s because what we’re dealing with, with, you know, the SSI space is a two-sided market, at least. It’s a multi-sided market. And people don’t understand the dynamics of that. There’s a great book about how hard it is to go to market with multiple sides called The Cold Start by Andrew Chen. Fantastic. One of the best business books I’ve ever read about that particular topic. It’s very difficult. You have the chicken-egg problem. Why would an individual get verifiable credentials if they weren’t useful anywhere? And why would organizations, companies, places where I might use verifiable credentials, why would they change their systems, their sensitive systems that are dealing with identity and authentication, if no one yet has verifiable credentials? It’s the cold start problem. And by the way, you had this problem with the internet. Why get internet access if there’s nothing on the internet? And why would the builders of internet infrastructure build that if there’s no one using it yet? So the cold start is not an insurmountable problem. We’ve done this with fax machines.

Timothy Ruff: Why get a fax machine if no one else has one? But the interesting thing is, if you’re the only doctor without a fax machine and all the other doctors and medical professionals are zipping faxes around using this new thing called faxing, and you’re the only one that doesn’t have one, well, then you have the opposite problem, right? It’s a network effect, and the network effect is your enemy at first and your friend at the end. But the spoils go to those who figure out how to go to market, who find ways to open up these markets, who find those little nuggets and ways to go to market, ways to make money, ways to survive in the early days when it’s hard to survive, when it’s hard to make money. Being the first fax machine salesperson, right, is not going to make a lot of money selling fax machines when no one knows what it is, when he has to explain, Oh, here’s what a fax machine even is. That salesman is going to starve at first while he’s trying to figure it out. There’s this tipping point where there’s momentum, and that point hasn’t been reached in the SSI space.

Timothy Ruff: So we’re still at that hard clawing it out. It’s like a pioneer with a machete carving a path through the jungle. The one at the front with the machete has the toughest road. But after that, there’s people that can come and kind of smooth it out a little bit, and eventually that path gets paved. And then eventually along the path, you know, there’s an ice cream stand or maybe a gas station or a hotel and then streetlights. And next thing you know, it’s comfortable for everybody to go down that path. But it started with, you know, the guy cutting his way through the undergrowth of the jungle. The greatest risk is the guys at the beginning because you’re not sure what’s in the other side of the jungle. You’re not sure how long it’s going to be, you know, or if you’ll run out of money, run out of stamina, you know, as you’re trying to get it out. And so some people just wait till the few intrepid folks who are with the machetes have carved a path and then they come in. I’m more of a machete wielder.

Riley Hughes: I was going to say, yeah, as one of those machete-wielding pioneers yourself, with the conversation of go-to-market in mind, can you connect the dots between where you started as CEO of Evernym to where you transitioned to essentially being a full-time machete-wielding, boots-on-the-ground person trying to crack the go-to-market nut in a variety of different industries?

Timothy Ruff: Jason and I, as co-founders of Evernym, were machete wielders ourselves. Evernym was one of the first companies to really try to make a business of verifiable credentials and self-sovereign identity. We created the Sovrin Network. Things really took off with the IBM folks coming on and being stewards of the Sovrin Network. And then we got Cisco and we got NEC and we got Deutsche Telekom, and it started to hit mainstream. And so we got some momentum. And we open-sourced a lot of code. We spent a lot of money developing code, and we made some mistakes. We should have open-sourced the wallet early on. We didn’t do that. But we open-sourced everything else, millions of dollars of code that ended up being Hyperledger Indy, Hyperledger Aries, Hyperledger Ursa. And we did that to jumpstart the industry. We didn’t want it to be just us that needed to be a competitive industry. Our customers needed to be able to fire us and switch to another one. We didn’t want to be just another platform.

Timothy Ruff: And once it was apparent that the industry was bigger than us, and we were seeing activity on every continent and every industry, and we were hearing about use cases all over the globe, it was super exciting. I mean, it was something that we couldn’t stop. We helped give it a push. We’re not the only ones who gave it a push in the early days, but we gave it a really strong push. And once it had sufficient momentum, it couldn’t be stopped. The vision was out there, never to be put back in the bottle. So I stepped down as CEO of Evernym in 2019. Evernym sold to Avast in late 2021. And in between that time, I partnered with Dr. Samuel Smith, and he and I launched Digital Trust Ventures. And now we do not wield the machete ourselves. We find other machete wielders and we partner with them and we help them. And instead of being very horizontal, and this is something for the entrepreneurs in your audience, find a vertical. I wish we had been vertical rather than horizontal. And what that means is pick a market, narrow your focus, and go win that market. Go solve a problem in healthcare.

Timothy Ruff: Go solve a problem in travel. Go solve a problem in some specific vertical. I would strongly encourage any entrepreneurs who hear this to pick a vertical as narrowly sliced as you can possibly make it and go after it. And that’s what we’re doing with our startups too, in our venture studio. Not a venture fund. We’ll eventually have a fund. Don’t have one now, but we do help with fundraising. We do have investors who like everything that we do and want to invest in anything that we bring to them. But we don’t have the ability to write the check ourselves. So we’re a venture studio. We take a piece of equity from the startup, so we partner with in exchange for helping them with four things. We help them with their technology, we help them with their go-to-market, we help them with the recruiting, and the fundraising.

Riley Hughes: Yeah, that’s helpful. I don’t know if you see it this way, Timothy, but in the Cold Start Problem, the book that you referenced before, I think one of the antidotes to the chicken-and-egg problem that they describe in that book, as well as others that I’ve read, talks about targeting what they call a beachhead market and really just being very specific. From what I’ve seen, that can be done with an industry vertical. You can go really specific into an industry vertical, but I think there’s other ways to segment it too. I’ve seen— there are companies that instead of segmenting based on vertical, they’ll segment based on use case, for example. They’ll focus just on age verification. But I think the ones that do really, really well start very specific and narrowly on maybe it’s age verification in gambling or something. Once they are able to address that really well, they can sort of expand either horizontally or vertically into sort of maybe it’s still age verification, but now it’s gambling and it’s alcohol.

Riley Hughes: Or maybe it’s instead of just age verification and gambling, they’re doing age verification and bank authorizations for gambling or something like that, right? They’re doing a sort of secondary use case. And I think that the key thing that I’ve seen be a predictor of success is just hyper-focus on a specific problem or customer that they’re targeting.

Timothy Ruff: Let’s talk about age verification for a minute, because that’s a hot topic in my home state of Utah right now. There’s been some legislation that’s been passed that’s very controversial. Two pieces of legislation. One deals with access to pornography for adults because pornography has been deemed a public health hazard. So Utah passed a law requiring those that sell pornography to make sure that their users are at least 18, even though there’s really no way for them to do that. And there’s a lawsuit going on now. Still, the law has been passed. It’s done. The other thing is for children accessing social media that they need to be, I think Thirteen. And Riley, since the very beginning, we’ve known that this technology is ideal for age verification. But yet, no one that I’m aware of has come to market with a verifiable credential-based age verification system in the U.S. I know maybe in other places they’ve done it successfully, and you would probably be able to answer that better than me.

Timothy Ruff: But you’d think Utah, who’s the first state in the United States that’s passed laws like these, you’d think this would be the place that they would converge and really go after it. But you talk about narrowing the market. You can not only narrow it in the way that you described age verification, you can also narrow it geographically. You can really slice this thinly where you say, you know what, I’m going to do age verification for pornography, for adults, you know, because it’s tougher to do the guardian thing for children. I’m just going to do the adults one. People are 18 or over, and I just want to focus on that problem in the state of Utah. That is a narrowly defined market that I think would be great to go after. But you still have a chicken-egg problem. You still have to get both sides of the market. You still have a cold start problem. But at least you’ve limited your cold start problem. I find the irony that you bring that up, and we’ve been talking about age verification for how many years?

Timothy Ruff: Probably since 2017, 2016, maybe since the beginning of Sovrin, which rolled out in 2016, and still no one has gone after that. The question then is, is it strong enough to stand on its own as a business model or a business case? I still assert that the subject of the market— Which for SSI is the individual. That subject does not generally, does not want to spend money. If the subject of the market is the individual who wants to access pornography, and they now need to spend money on your service that you brought to market in order to use it to prove in a privacy-respecting manner, using verifiable credentials with all their privacy capabilities, that they could access that kind of content. They’re not going to want to spend money. They’re going to want to expect this kind of thing for free. They’re going to expect it to be bundled into something else. And you’ve got a huge marketing problem too. It’s like, how do you try to market something like that?

Timothy Ruff: And to everybody, even if it wasn’t something as controversial as pornography, you still have to go try to get people to sign up for something and spend money on it. That’s hard to do. It takes a lot of dollars to do that.

Riley Hughes: Timothy, if someone were to come to you with the idea for using verifiable credentials to solve age verification, what would be those questions you would ask them to challenge them? You mentioned who is the customer, and maybe for a moment, let’s assume the customer is businesses who now have liability because some law has been passed related to this, and they need to comply with that law. In Utah, that would be social media and pornography companies. What are the next questions that you might ask an entrepreneur who comes to you with this idea to help them try to flesh out whether or not they have a real business case versus just a use case?

Timothy Ruff: Here’s the challenge. Someone comes to me with an idea for go-to-market. There’s three things they’ve got to figure out: the problem, the solution, and the fit. The F word is the hardest part, the fit. Now they come often with a solution. They’re a hammer looking for nails. Oh, blockchain this, blockchain that. And hopefully they’re a little bit smarter about it than that, and they come and say, No, no, we can actually do age verification, and it can respect privacy so that the company serving up the content don’t even know who’s logged in, and they can prove that they’re 18. Great. That is an interesting one because now you’ve got the problem and the solution described. So the problem being people trying to get access to this content. They live in Utah, can’t do it because of the law, don’t know about VPNs because it’s the imaginary world; they don’t exist. And the solution would be some kind of verifiable credential-based product that gives them the ability to do that and do it in privacy so that no one can track them.

Timothy Ruff: So there’s the problem, there’s the solution, but what’s lacking? The F word: fit. Fit is only when you have some validation from your market that your market actually wants. what you have. It’s the moment venture capitalists call it, Will the dog eat the food? Fit is when the dog eats the food. Okay, when you have a problem and a solution, when you’re walking around with a solution, you’re basically saying, I’ve got this dog food that dogs are going to love. And that is your solution, and you’re assuming that there’s a hunger for that kind of a dog food. That’s the problem. Where it all comes together is when the dog eats the food and is wagging his tail and wants more. That is when the market has given you some evidence that it wants that food. Now, how do you get to problem-solution fit without building the product and spending a bunch of money and taking a bunch of risk? Well, the tools are out there to build mockups and clickable wireframes and all kinds of ways that you can put things in front of people and basically sell it to them. It’s legitimately vaporware.

Timothy Ruff: You tell them it’s vaporware. Hey, this doesn’t work yet, but we’re building this thing. Would you buy it? A lot of people have heard of the Lean Startup, and that’s written by Eric Ries, and there’s a series of books. One of his students wrote a book that’s better than I think any other book in the series, and it’s called Running Lean, and Eric has now adopted it. And the book gives you step by step how do you go around conducting interviews with people to find out real feedback so that you know the dog will really eat the food that you’re bringing. You got to be clear about the problem. You have to be clear about the solution. And then you have to get some kind of evidence that there’s a match there. It’s not just in your head. You’re not just speaking on behalf of every potential dog who might eat food. The dogs are going to love this. Take my word for it, investor. Give us a bunch of money so we can go build this because I know the dogs are going to love it. Smart investor is going to say, Give me the evidence that the dogs are going to eat the food.

Timothy Ruff: And this is where this running lean book by Ash Maurya, M-A-U-R-Y-A, strongly recommended because it helps you get that assurance before you raise a bunch of money, spend a bunch of money, waste a bunch of time. And I can’t tell you, Riley, how many deals we have wanted to do, including one just as recently as last week in the insurance industry, where we spent a bunch of time with the entrepreneurs over months. We thought we’d found a really nice problem solution. The problem was, is the fit. We spent some time interviewing prospective customers in the insurance industry, all different sizes of companies, and turns out it’s just really bad timing in the insurance industry. Any market that’s struggling, even if your product is amazing and solves a major problem for them, if the market itself is struggling, it will overwhelm your attempts to go into that market. That’s another just little pro tip. Pick a market that’s actually healthy.

Riley Hughes: Yeah. Have you read Disciplined Entrepreneurship?

Timothy Ruff: No, I haven’t heard of that one.

Riley Hughes: It’s another one that I think is really, really good at being very tactical about the act of entrepreneurship and launching a product. There’s another book called Without Permission, I think, by Alexis Ohanian, who’s the co-founder of Reddit and a current venture capitalist. But he talks about how when you’re playing poker, sort of the most important thing that you can choose is which table to sit at. That’s more important than almost any other decision you could possibly make. And that is sort of speaking to your point about markets. Choosing the market you go into is almost more important than really any other decision you can make.

Timothy Ruff: There’s an age-old arm wrestle among venture capitalists about what is most important, whether it’s the market, the product, or the team when they’re evaluating what company they want to invest in. Those are the three things they look at. There’s arguments for all three. The one argument that’s most compelling to me, most persuasive to me, is the market. A lousy market will make a great team look bad. A fantastic market will make an average or mediocre, maybe even a lousy team look really good. It’s like a big wave that you can ride or that you can have smash you into the rocks.

Riley Hughes: Well, I wonder if it would be useful to explore an experience that you’ve had doing this hands-on. I know that you are a co-founder of a company called Credential Master, and I don’t know if you consider that as being a machete-wielding experience. It seemed to me like you were certainly quite in the weeds with Alan on that endeavor and ended up selling that company. But I know that at Credential Master, you had sort of a horizontal product which you were exploring applying to a specific vertical. And I wonder if you could talk through what that experience was like searching for the right problem-solution fit.

Timothy Ruff: Yeah, that one was maybe not a great example because it had a happy ending. There was an exit. Salesforce bought the company. But we didn’t go to market. We positioned the product, which we called Verifiable Credentials Management, as something that every organization will need. And I still believe that every organization will need to do verifiable credentials management to some degree. By the way, I think verifiable credentials are going to be far more numerous. than the people and things we interact with. So this platform was anticipated to use the power of Salesforce, so it was built on Salesforce, to enable organizations to manage hundreds of thousands or millions of verifiable credentials and integrate it with all their other existing systems and perform analytics. And then Salesforce noticed it, and then they noticed also the growing fervor around verifiable credentials generally. They made a bet that verifiable credentials are the future, and they’re right. So that was very horizontal.

Timothy Ruff: Then we said, all right, let’s take this and verticalize it, and we created self-sovereign student ID. Let’s use this verifiable credential management capability and customize it for a school, higher education primarily, for issuing verifiable credentials to their student base so that they can use it as a student ID. And so we designed that product, we built the capabilities, we wrote a bunch of pages about it, but we never went into market. We talked to a few educators before we built it. We did mock-ups and things like that, and we went through those steps, and we believed that the product would sell, but we never went to the step of building a marketing campaign or hiring salespeople and trying to go out and sell it. We were in the process of taking that product and taking it to market. But the reason I say it’s a bad example, Riley, is we never really did.

Riley Hughes: It sounds like you had a problem-solution, and you were exploring what that fit would look like. If we’re all being honest with ourselves, the batting average that we all have of our ideas being the winning ideas in the market is pretty low. So if we’re being sort of sober about all of this, probably 99 point whatever percent of the things we think up are going to need to be adjusted. I know that you currently are working with a number of companies and have one in particular in the telecommunications vertical. Are you further along there? And if so, what is the nature of the conversations that you end up having with a potential buyer of the product, and what kinds of questions do you ask them to really understand whether that dog will eat that dog food or whether you need to pivot the solution or the problem just a little bit to get that fit tighter?

Timothy Ruff: This is another go-to-market tip, you know, pro tip is go into a market that you know well. And if you don’t have a market you know well, partner with someone who does. That’s what Sam and I do, is we partner with people like Randy, who know a market well and they know who to talk to. He can pick up the phone call or send an email, and next thing you know, we’re talking to very important people. What we do is we sit down with them and we explain the concept of verifiable credentials. It’s so refreshing, Riley, to talk to an industry where you are explaining the concept of verifiable credentials anew because they get excited. So we talk to them about the concept, but then we show them pictures. And they would show, okay, here’s how it works today. Now tweak, and then click and tweak and click and tweak and click. And every click was a new slide that added a new element to the diagram. So we built it and built it and built it.

Timothy Ruff: And in the end, you have this really beautiful diagram of a future state of where all communications are verifiable, not just text messages, but all communications are verifiable by any actor in the chain. And using what I call second-generation credentials, there’s a capability called contingent disclosure. Not selective disclosure as with zero-knowledge proofs, but different, contingent disclosure where identity is actually put into escrow. The identity is not disclosed, you know, 99% of the time, maybe 99.99% of the time. But then when a regulator needs to perform what’s called a traceback, then they can go get the identity out of escrow and verify who sent the communication or who sent the call. And that way you solve a really delicate problem in the telecom space of provable identity, but not having the identity always be broadcast everywhere.

Timothy Ruff: And so, being able to strike that balance and show pictures of how all of this can work and paint this picture for people of importance, regulators, standards makers, carriers, people who Randy knows because of who Randy is, that’s when it all starts to come together. And after you have a number of those conversations, you no longer doubt if. It’s not a matter of if. It’s just a matter of how and when that this is going to happen, because it solves the problem so elegantly. It’s just a matter of what’s the pricing and which use case is going to go to market first.

Riley Hughes: When I have done these kinds of exercises as a founder, the most useful conversations are actually the ones where I am challenged or I’m proven wrong. Do you have any questions that you ask in these meetings to unearth maybe concerns that are hidden behind the concern behind the question or anything like that that you think would be helpful?

Timothy Ruff: You’ve touched on something very near and dear to my heart, Riley, and that is, you know, I’ve got seven kids, and I’ve got grandkids now. So my older kids are married, got grandkids, and I can just tell you that the most important thing I think that my kids can learn in this life is what you just said, is that the ability to be wrong. Some people might find it ironic that I would say that because I always speak as if I’m right about everything, and that’s the way I talk, as if everything coming out of my mouth is a fact. But people who know me well, my wife and kids and people that have done business with me, will say that I try really hard to be intellectually honest and be willing to be wrong and do a 180 and acknowledge when we’re going down the wrong path and choose a different one. And goodness, Riley, there’s nothing more important in business. There’s nothing more important than life. In my opinion than that is being able to admit that you’re wrong. When we were raising money for Evernim, there were investors who came to us who said, Tell us about your pivots.

Timothy Ruff: That was like the first question, their pivots, meaning you were going one direction and you realized it wasn’t working and you pivoted to go another one. And that’s like almost the only thing they wanted to know. And the implication was that if you’re not pivoting, you’re not listening to the market. You’re not paying attention to market signals. And basically, you’re not admitting that you were wrong. You’re trying to say that you are right and the market is wrong. But if you’re humble and instead you’re saying, No, the market is right, and I need to figure out what the market is saying, then that is when you start to discover. amazing things. So, as you know, I used to be a huge proponent of blockchain. There was no one singing the praises of blockchain louder and more frequently than me. And I now believe that blockchain is pretty much a dumpster fire, that it is not the right solution.

Timothy Ruff: I’m writing a piece right now about the top 10 reasons why I think all of SSI, including you and your company, will abandon everything to do with blockchain within a few years, for a number of reasons. I’ve got 10 reasons, and a lot of them I think are pretty compelling. Once again, I could be wrong. I need to be willing to be wrong about that pivot as well. And if someone comes to me and says, You’re completely missing it on blockchain, I need to be open to that. So just because I pivoted on blockchain doesn’t mean that I’m right by doing the 180. You have to always be willing to do another pivot. I may end up doing a 360, right? Someone comes and points out something I completely missed, and I’m back on the blockchain bandwagon, and people will say, Oh, you’re flipping and flopping. No. New data, new information merits reconsideration of old conclusions. And by the way, a new perspective on the same information also is new information.

Timothy Ruff: If someone can come and give me a new perspective on something I thought I knew, that’s new information, and it now merits reconsideration of past conclusions. So, you know, I have strong opinions, but I don’t hold on to them so rigorously that they can’t be changed. I’m a huge believer into what you just said of being able to admit you’re wrong, change direction, both in your personal life and in professional life. Huge benefits.

Riley Hughes: Awesome. I think you and I share this. I try to be really sort of critical or skeptical of even my own conclusions and try to disprove them as quickly as I can. And I think it’s worth mentioning that that’s painful.

Timothy Ruff: Let’s talk about that for a second. You know what the ARPANET is?

Riley Hughes: Yes.

Timothy Ruff: The first internet, and the University of Utah here in our backyard was one of the first nodes. And one thing I like to remind myself and ask other people was, the ARPANET a failure? The ARPANET doesn’t exist anymore. It’s gone. Does that mean it was a failure? Absolutely not. We would not have the amazing thing that is the internet without the ARPANET. So it served its purpose. So sovereign and blockchain served a really critical purpose. It does not have the legs to go the distance for a bunch of reasons. But was it a mistake to have used blockchain? Absolutely not, because blockchain opened the aperture. It opened people’s minds. You now have organizations all over the world, governments all over the world talking about identity, talking about verifiable credentials, talking about the concept of decentralization, talking about the issue-ordered verifiable model, talking about all of these things, all inspired by the excitement for blockchain. They rode the blockchain wave, and that is a super useful, wonderful thing.

Timothy Ruff: But that’s not the same as saying that blockchain is the horse that’s going to take us the distance.

Riley Hughes: Yeah, and it’s been painful as a company building in this space, as one of those people, machete wielders, I think you’ve experienced the same thing, where you spend millions of dollars, years of time building things, and the— Product of that work is actually the insight and learning that you need to build the next iteration or the next thing.

Timothy Ruff: But there’s also market momentum. There’s a lot of beauty that you get. You’re warming up the market for yourself and for others. People don’t realize identity is the single most sensitive thing for an organization to change. It affects their authentication of their employees and access to their most sensitive systems. It affects how their customers access their own accounts and secure things. I mean, identity is like the core thing. And yet organizations around the world are acknowledging that there’s a problem with it, that it is broken, and they’re thinking and talking about it. It is warming up the market for change, and that is a beautiful thing. So even if someone builds something on blockchain and takes something to market and ends up realizing later, Oh my gosh, blockchain is not going to take me the distance, the thing that you’ve really built, which I think is what you were saying, is you’ve built a market. You’ve built a customer that wants a solution. They didn’t want blockchain. They didn’t buy your product because it was blockchain.

Timothy Ruff: They bought it because it solved a problem for them. It’s like an ingredient in the food. If the food still tastes good, the dog will eat it, and people think that it’s all about blockchain. It’s not.

Riley Hughes: If you had to bet, which class of use cases or class of verticals will drive adoption of verifiable credentials in the next little while, which will be the first dominoes to fall in building the future of identity?

Timothy Ruff: One, we have a startup in stealth mode that I think will drive hundreds of millions of users within the next year and a half. And unfortunately, I can’t talk about it. I’m excited. I will put out a little bit of a pitch for anyone who’s made it this far into this episode, is we need wallet providers who can scale. And I don’t mean just the technology. I mean the ability to handle hundreds of millions of users of anything is a very difficult task. So it’s not just a matter of having technical scale; it’s a matter of supporting with knowledge bases and how do you handle users with all their different challenges and things like that. So there’s that. And I wish I could give details on what I think we’ve discovered there that will enable that. It’s not my secret to share, so I can’t. But gosh, you asking a really hard question. We spent years looking. We’re going after it in telecom. We have another…

Timothy Ruff: company in stealth mode in the trade and supply chain space with a star-studded cast and a completely disruptive approach, very different go-to-market approach than anything else that we’ve seen. So I can see what we are doing. We’re also doing something in state government. We have a stealth mode company going after use cases in U.S. state government, not federal, not municipal, state. But in general, the answer to your question, I think, is going to be in the organizational identity space. I think that that’s where most of your listeners are going to have the broadest, most target-rich environment of things to go after. And the reason is, is because in the SSI space, the subject of the space, the individual, like we said earlier, doesn’t want to spend a lot of money. It’s really hard to build a market around a customer who doesn’t want to spend a lot of money. And then there’s this constant fear that once you prove the market, that Apple and Google are just going to take over. But organizational identity is different.

Timothy Ruff: When you can solve problems with B2B ID, when someone’s being able to prove their authority between organizations, or B2C, someone representing an organization, like a member of law enforcement, for example, proving that they really are officially law enforcement, and they’re proving that to a citizen, and the citizen is verifying law enforcement. Right now, a lot of people are thinking, Oh, we need to verify citizens in their interaction with government, and we’re actually taking kind of the opposite. We’re saying, actually, we want government to prove who they are when they’re interacting with citizens. How do we do that? That is what I think is an organizational use case, not an SSI use case. And so that whole field of organizational identity, I think, is far more ripe for opportunity because the subject of the market will spend money. These are organizations; they will spend money to solve problems.

Timothy Ruff: Whereas, unfortunately, in the SSI space, the subject doesn’t want to spend a lot of money, and so we have to find these kind of periphery go-to-market opportunities that result in people holding credentials, but don’t necessarily involve the people holding the credentials paying for anything, which is a tricky go-to-market problem.

Riley Hughes: Timothy, this has been an awesome conversation. We’ve sparred in some cases over some of these topics and also agreed on others, but I think this was a really, really fun conversation that I think could go much deeper in many of these areas, but was a great overview. If people want to get in touch with you or follow up with you or get in contact, how do you recommend they do that?

Timothy Ruff: Just an email, timothy@digitaltrust.vc would be the easiest.

Riley Hughes: Great. Well, thanks for listening. You can find us on YouTube, Apple, Spotify, and wherever else you listen to podcasts. Feel free to reach out to us on Twitter at Trinsic underscore ID and me at Riley P. Hughes, and visit Trinsic if you’re interested in building the ID tech products of the future. Subscribe to get new episodes as they drop, and thanks for listening.