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Bilel Kouider - The Future of MDF Lessons from Web3 Models · Partnerships Unraveled

• 0:06
  SPEAKER_00: Welcome back to Partnerships Unravel, the podcast where we unravel the mysteries about channels and partnerships on a weekly basis.
• 0:13
  SPEAKER_00: My name is Efe and I'm excited to announce our special guest, Bilal.
• 0:16
  SPEAKER_00: Bilal, how are you doing?
• 0:19
  SPEAKER_00: I'm doing good, Efe.
• 0:21
  SPEAKER_00: Thanks for having me today.
• 0:22
  SPEAKER_00: Really happy to be here to be here.
• 0:25
  SPEAKER_00: Thank you for joining, Bilal.
• 0:26
  SPEAKER_00: I'm really excited because I think you wrote a groundbreaking white paper about how Web3 is going to change channels, and we're gonna dive into that white paper.
• 0:34
  SPEAKER_00: But before we start, I would like you to uh give you an introduction, tell us who you are and where you come from.
• 0:40
  SPEAKER_02: Sure.
• 0:41
  SPEAKER_02: Well, I'm Bilal, I'm the global director leading the marketing development at uh at HP.
• 0:46
  SPEAKER_02: And my job actually is very simple.
• 0:48
  SPEAKER_02: Make sure that the partner can grow with HP, stay loyal to HP, and have the smoothest experience when it comes to MDF.
• 0:57
  SPEAKER_02: Um, I've always been at the intersection of business and innovation.
• 1:01
  SPEAKER_02: Uh, you know, I spend a lot of my time looking at how new technology, emerging technology like AI and blockchain are reshaping how companies, you know, uh work together, exchange value.
• 1:15
  SPEAKER_02: Um, yeah, and it's a space that is moving so fast, and I love it.
• 1:19
  SPEAKER_00: Yeah, I fully agree.
• 1:20
  SPEAKER_00: It's super interesting.
• 1:21
  SPEAKER_00: I read your white paper in detail.
• 1:23
  SPEAKER_00: And uh I think the the kind of premise of the white paper is you talk about how today in the channel in the ecosystem trust is not necessarily lacking, but it's built on an outdated system uh that slows down the entire partner experience.
• 1:36
  SPEAKER_00: I think you know the problems that we see with uh channel incentives, MDS rebase, that it could take a lot of time, there could be errors, there could be fraud, and those kind of uh problems that we all encounter in the channel.
• 1:48
  SPEAKER_00: So, what was the what was the moment or insight that kind of convinced you that the current system is outdated?
• 1:55
  SPEAKER_00: What what was the what was the turning point for you that realized that this needs to be changed?
• 2:01
  SPEAKER_02: Right.
• 2:01
  SPEAKER_02: So for me, you know, leading the global marketing development fund, my job is to constantly listen to the partners, right?
• 2:08
  SPEAKER_02: What's working, what is painful, what is slowing them into the what I call the partner happy path, right?
• 2:15
  SPEAKER_02: And actually the truth is the system that we are using is it's an infrastructure based on a web 2 infrastructure, right?
• 2:23
  SPEAKER_02: It's centralized, it depends on many gatekeepers, internally or even externally, right?
• 2:29
  SPEAKER_02: I think you know web 2 has been extremely grit over the last 20 years.
• 2:34
  SPEAKER_02: When you think about it, you know, related to you know when it comes to the internet, mobile device, social media, everything, all of all of all of these tools basically help to accelerate the globalization.
• 2:46
  SPEAKER_02: And that's thanks to the web 2 infrastructure.
• 2:49
  SPEAKER_02: Now, the the challenge that you face is that the more you scale, you know, and you start to operate in more than 200 countries, the more friction you create, right?
• 2:59
  SPEAKER_02: Because you have more teams, you add more rules, more checks, more approval into the process, and and suddenly you start to deliver what I call bureaucracy at scale, right?
• 3:10
  SPEAKER_02: So, really for me is uh it's NDF, uh it's it's based on a web to infrastructure.
• 3:17
  SPEAKER_02: And if you look at the recent research, whether it's coming from CRN, you know, the channel core, or tech essay, the the key feedback that's always coming back is um partner experience is fragmented, MDF is too slow, uh NDF is outdated, and the trust is not strong anymore, right?
• 3:37
  SPEAKER_02: So that's that's maybe when it became so clear for me that it's not about people and the trust on our people or the lack of trust with our people, it's the infrastructure that itself that is outdated.
• 3:50
  SPEAKER_00: I I remember in the white paper there was this data, I think in the US, every year 174 billion is spent in channel incentives.
• 3:58
  SPEAKER_00: It's a crazy amount.
• 3:59
  SPEAKER_00: And I guess you know what you said about bureaucracy at scale is so true because now there are so many partners.
• 4:04
  SPEAKER_00: You kind of talk about Microsoft, they have 400,000 partners worldwide.
• 4:07
  SPEAKER_00: It's how do you build a system that you can keep uh track with everything that's going on among your partners?
• 4:13
  SPEAKER_00: And I was kind of really amazed with the solution that you propose, how uh you're going to use Web3.
• 4:19
  SPEAKER_00: I feel like there's this negative stereotype about Web3, or maybe people don't understand it quite well yet.
• 4:26
  SPEAKER_00: Maybe some people see it as just crypto, they don't really understand what blockchain means.
• 4:30
  SPEAKER_00: But the you propose a very specific, a tangible, real case, practical use for uh smart contracts, zero knowledge proofs, stable coins, also AI uh to act as the intelligence in that uh in that uh system as well.
• 4:45
  SPEAKER_00: Can you walk us through how that how that looks like in real life and maybe share a real-world use case of how a vendor and a partner might uh use this system?
• 4:54
  SPEAKER_02: Absolutely.
• 4:55
  SPEAKER_02: So let the let me start maybe to zoom out, right?
• 5:02
  SPEAKER_02: And web two is the next evolution, what was the next evolution of Web 1.0, right?
• 5:06
  SPEAKER_02: So if we look back when Web 1.0 was in the 90s, and the the feature or the capability was all about read, right?
• 5:15
  SPEAKER_02: So you go into a home page, you go to you know, welcome, well, you know, uh hello world, right?
• 5:20
  SPEAKER_02: That's but those are famous, you know, uh, you know, web pages where that was the first version of the internet, right?
• 5:28
  SPEAKER_02: Web 2 came roughly in 2005 when it's not about read anymore, it's read plus write.
• 5:36
  SPEAKER_02: So it's a rise of platform, it's a rise of you know user-generated content.
• 5:41
  SPEAKER_02: You have platforms like Facebook, YouTube, you know, Uber, you name it, right?
• 5:46
  SPEAKER_02: Web3 2.0 is it's an emerging technology, right?
• 5:50
  SPEAKER_02: It's it's very recent in terms of adoption, but it takes the the into consideration the read, the write, and the own, right?
• 5:59
  SPEAKER_02: So we start moving to an ecosystem that is centralized, to an ecosystem that is decentralized.
• 6:06
  SPEAKER_02: Blockchain did not did not come from a crypto hype.
• 6:11
  SPEAKER_02: Um it actually goes back to the 70s, and this is what I've been writing in my white paper, where two American researchers, one at Stanford University, they were so convinced on how do you secure communication in an open network, right?
• 6:27
  SPEAKER_02: So they started to leverage uh a public key encryption, and and fast forward to now, this public key encryption is becoming the backbone of all the different transactional interactions in the banking system, in the e-commerce, in um you know, in um secure you know, in messaging that you you will see in a WhatsApp or Telegram uh application.
• 6:51
  SPEAKER_02: So, really for me, blockchain is 40 years of innovation, more than 40 years of uh you know constant improvement and constant technology improvement.
• 7:03
  SPEAKER_02: In 2024 alone, it's not only about the innovation, but in 2024 alone, blockchain now processing more than$28 trillion in value.
• 7:14
  SPEAKER_02: It's more than Visa, MasterCard, and American Express.
• 7:18
  SPEAKER_02: Payments are becoming faster, they're becoming cheaper, and they are borderless, right?
• 7:24
  SPEAKER_02: A payment in stablecoin is like sending a WhatsApp message.
• 7:27
  SPEAKER_02: It's you know, instantly.
• 7:29
  SPEAKER_02: Decentralized finance, another KPI that I like to use, is the decentralized finance.
• 7:34
  SPEAKER_02: Last year,$240 billion of capital has been deployed in the in the web3 and in the blockchain infrastructure.
• 7:43
  SPEAKER_02: Uh it's not hype anymore, right?
• 7:45
  SPEAKER_02: It's not a niche anymore.
• 7:47
  SPEAKER_02: Um you have major institutions, BlackRock, um, you know, uh Grayscale, um JT Morgan, um, you know, an innemit, right?
• 7:57
  SPEAKER_02: That are all in this in this space.
• 8:01
  SPEAKER_02: In terms of users, we are talking about more than 700 million users in the blockchain.
• 8:06
  SPEAKER_02: So it's maybe three times more than Netflix users, right?
• 8:11
  SPEAKER_02: So I I like to give a bit of perspective on this one, and that's what I did that a lot on my white paper, because again, it's it's not a niche, it's not a hype, it's not you know uh uh uh only a crypto money that's uh gonna serve for the for the uh you know uh black market.
• 8:29
  SPEAKER_02: Now it's actually um you know a technology that is being used uh for a financial institution.
• 8:35
  SPEAKER_02: Now to come back to a question related to you know a real use case for channel, I love to use this maybe uh you know analogy.
• 8:42
  SPEAKER_02: Let's say if that uh you know you want to imagine the perfect playground with your friends, and you say, okay, in this playground, I want to have an open, very transparent and very fair you know uh game that I'm gonna decide.
• 8:56
  SPEAKER_02: I will call the first layer, the layer one.
• 8:59
  SPEAKER_02: This is your notebook.
• 9:00
  SPEAKER_02: And what you see in your notebook is every transaction that's happening in this playground are being recorded, right?
• 9:06
  SPEAKER_02: I'm being recorded into the notebook.
• 9:08
  SPEAKER_02: Here, this is a blockchain.
• 9:11
  SPEAKER_02: The good thing with with being recorded into your notebook is that nobody can erase, nobody can change, nobody can cheat on the transaction.
• 9:19
  SPEAKER_02: Right?
• 9:19
  SPEAKER_02: The moment that is recorded, it's immunitable.
• 9:22
  SPEAKER_02: The second layer is what I call the robot referee.
• 9:26
  SPEAKER_02: Here is very simple.
• 9:28
  SPEAKER_02: We decide that if someone scores four goals, well, there will be a robot that will give a little tweet, a little sticker instantly.
• 9:37
  SPEAKER_02: That's what I call smart contract.
• 9:39
  SPEAKER_02: So there is no more discussion, no more weighting, the rules of the game are super clear, and everybody is transparent and understand.
• 9:47
  SPEAKER_02: The third layer is what I call the secret keeper, so the zero knowledge proof.
• 9:52
  SPEAKER_02: And here, really the the the technology that that was um that has been released back in the 90s is how do you prove that something happened without revealing the identity of that person?
• 10:05
  SPEAKER_02: Right?
• 10:06
  SPEAKER_02: So it's it's a massive new infrastructure, right?
• 10:09
  SPEAKER_02: That that changed everything in terms of how you interact.
• 10:13
  SPEAKER_02: Now let's imagine this applying to MDF.
• 10:15
  SPEAKER_02: Let's take a concrete use case of MDF and rebate, but I will take MDF.
• 10:21
  SPEAKER_02: The MDF rules are inside a smart contract.
• 10:25
  SPEAKER_02: So you decide what will be my rule of the game for my MDF and what I uh what behavior I want to have related to MDF program.
• 10:33
  SPEAKER_02: So this you know when when a partner reaches a specific error, a specific target of FRI, you name it whether it's a number of temperature, number of leads, what you're going to do is to release the little treat.
• 10:44
  SPEAKER_02: And here the little treat will be a reward, the payment, right?
• 10:48
  SPEAKER_02: And the payment is then released automatically.
• 10:52
  SPEAKER_02: Payment will happen in stable quant.
• 10:54
  SPEAKER_02: A stable quant is nothing than just a digital money that stays the same value.
• 10:58
  SPEAKER_02: So one stable point equals one US dollar, and it can move 24 hours, seven days a week, 365 days a year, and it's borderless, right?
• 11:09
  SPEAKER_02: It's globally.
• 11:10
  SPEAKER_02: So that means if you want to pay a channel partner that is in Nigeria or in Philippines, and uh any company is based in the US where the payment is done in less than 20 so right.
• 11:21
  SPEAKER_02: So for me, Web3 introduced what I call programmable money, programmable instantly.
• 11:27
  SPEAKER_02: It becomes much more transparent in terms of rules, it's instant settlement, and again, it's not science fiction, it's happening today.
• 11:37
  SPEAKER_00: And let's I I allow that.
• 11:38
  SPEAKER_00: Let's say we forward maybe five, ten years where let's say that this system has been adopted, let's say we've evangelized it, we got we got the buy-in at an executive level from the vendors, partners, and everyone is using how do you see it kind of solving the challenges that we see today with MDF?
• 11:56
  SPEAKER_00: How how is it going to kind of change the way that the system is going to work?
• 12:01
  SPEAKER_00: I feel like because currently um I know talking to a lot of partners, they have a lot of challenges when it comes to getting their payment.
• 12:08
  SPEAKER_00: The the timing is uh can take quite a long uh while.
• 12:11
  SPEAKER_00: They don't want to act as a bank to partners.
• 12:14
  SPEAKER_00: Do you feel like when the system is implemented, it's going to enable a more amount of partners, also maybe smaller partners to be able to benefit from incentives like MDF or rebates?
• 12:27
  SPEAKER_02: Yeah, I think you're you're absolutely spot on.
• 12:30
  SPEAKER_02: I think this type of infrastructure, this type of technology, what we will enable uh you know, this small partner, SB partner that may not leverage the strength of corporate like HP, where you know you can leverage an investment, but going into this process of reimbursement, reimbursement will take longer or may impact the cash flow.
• 12:54
  SPEAKER_02: And here's the idea is with such infrastructure, you will be able to move much faster in terms of payment, in terms of being transparent in the rule of the game, uh, and and actually even on the participation itself.
• 13:09
  SPEAKER_00: I would also like to talk about the idea of DAO, so decentral decentralized autonomous organizations.
• 13:16
  SPEAKER_00: Now, first, Bilal, I would like for you to kind of explain what this means for anyone who doesn't uh who may not be familiar, but you kind of talk about these that can help with managing incentive rules and MDF structures collaboratively.
• 13:28
  SPEAKER_00: Uh, could you give us an explanation of what DAOs are and how that could uh help us manage MDF and kind of move away from the top-down approach as you kind of talked about it before?
• 13:39
  SPEAKER_02: Yeah, right.
• 13:40
  SPEAKER_02: Well, uh a DAO is actually it's it sounds complex when you explain it, but the idea is very simple.
• 13:46
  SPEAKER_02: Is so it's it's a community or network that manage the rules together, right?
• 13:51
  SPEAKER_02: There's no more central authority, it's very decentralized, and uh it's it's you know being uh controlled uh and you know within the community.
• 14:01
  SPEAKER_02: A real example that I would like to share is the maker DAO.
• 14:06
  SPEAKER_02: It's uh so so they are managing the DAI stable coin, and here the community has more than 90,000 people, so it's 90,000 address identified.
• 14:18
  SPEAKER_02: And and what the people and this community can do, they can vote on interest rate, they can vote on collateral, and on the rules of the stable quant itself.
• 14:27
  SPEAKER_02: So now imagine if you apply this for massive partner ecosystem.
• 14:32
  SPEAKER_02: You mentioned earlier Microsoft has more than 400,000 channel partners, uh CVS Healthcare works with more than 300,000 healthcare providers, uh, Walmart has more than 100,000 uh suppliers.
• 14:48
  SPEAKER_02: Well, for it's impossible to keep everyone happy, especially in this top-down type of model, right?
• 14:56
  SPEAKER_02: So for me, with with a DAO, what you can do is that anyone can propose a challenge, right?
• 15:02
  SPEAKER_02: When you are part of this ecosystem, you can come and request uh a change on rebate rules, on you know, onboarding stake, um, and you know whatever.
• 15:13
  SPEAKER_02: Then comes you know the voting phase where all the partners can you know select, they can vote.
• 15:20
  SPEAKER_02: It's very transparent for everyone.
• 15:22
  SPEAKER_02: And and obviously, if it's being approved by the majority, then the smart contracts are being updated automatically.
• 15:29
  SPEAKER_02: So every vote, every update, every transaction are being stored, are being recorded into the blockchain.
• 15:37
  SPEAKER_02: And the past the partner stopped being the recipient, right?
• 15:40
  SPEAKER_02: I didn't know about that, right?
• 15:42
  SPEAKER_02: I was not aware.
• 15:43
  SPEAKER_02: Now they start to be co-creators.
• 15:46
  SPEAKER_02: And for for me, you know, the the the company that will be able to move fast in into this type of model will be the one that will have a competitive advantage because you will have a channel ecosystem, a living ecosystem that will be a co, you know, that would be that will co-lead with the vendor.
• 16:04
  SPEAKER_02: Um, we are still very early.
• 16:07
  SPEAKER_02: Okay, you still need uh a lot of work related to legal, regulatory, you know, off-chain execution, not necessarily on-chain execution, but the off-chain, on-chain execution.
• 16:18
  SPEAKER_02: Um, but the direct the direction is clear and it's coming.
• 16:23
  SPEAKER_00: You so you say that we are very early, and I I agree.
• 16:25
  SPEAKER_00: I think there's a lot of road that we have to uh you know overcome.
• 16:30
  SPEAKER_00: I kind of want to understand where you're at with this uh proposal.
• 16:34
  SPEAKER_00: I think that you you laid the foundations really well.
• 16:37
  SPEAKER_00: You found you have written this really uh well thought out uh white paper.
• 16:42
  SPEAKER_00: What are you working on right now that's really making you exciting uh that that could fundamentally change how vendors engage their partners?
• 16:51
  SPEAKER_02: Right.
• 16:52
  SPEAKER_02: So yeah, so so when I publish the you know the white paper, uh the feedback has been very positive, right?
• 16:59
  SPEAKER_02: Um I think obviously you still have some people that are not convinced that they still believe that crypto is just about speculation.
• 17:06
  SPEAKER_02: So it tells you about their level of understanding, right?
• 17:09
  SPEAKER_02: But I think people are being curious, they want to learn, they they want to understand the technology behind, right?
• 17:18
  SPEAKER_02: And that was the goal of this white paper.
• 17:19
  SPEAKER_02: What I wanted to do is really trigger and open this type of conversation.
• 17:25
  SPEAKER_02: Um I think we we are still super early because maybe probably three to five years earlier.
• 17:31
  SPEAKER_02: If you think about it, uh in the US with the Genius Act, um, you know, the law has been approved in July this year, right?
• 17:39
  SPEAKER_02: So it's it's super early, and usually it takes 24 months until the law is fully operationalized.
• 17:45
  SPEAKER_02: So the industry is being consolidated.
• 17:48
  SPEAKER_02: Um, but I think yeah, you know, if if if if I'm able to get more and more you know channel sales leader, channel leader um to understand the concept of Web3, getting more awareness, more education, um, I think that's gonna be a success on itself.
• 18:07
  SPEAKER_02: Um so yeah, I think this is uh what's coming, Effay.
• 18:10
  SPEAKER_02: And uh if I can just help this industry uh get ready with this challenge, the same as the same way as we are getting you know now digesting the AI wave, we will need at some point to digest the blockchain wave.
• 18:25
  SPEAKER_02: And I think it's important to do it uh as early as we can.
• 18:28
  SPEAKER_00: So would it be fair to say below to everyone who's listening that if they're curious, if they want to learn more about it, that they can reach out to you directly?
• 18:35
  SPEAKER_00: Absolutely, it will be a pleasure.
• 18:37
  SPEAKER_00: Well, you've been working on this for quite a long time, and I'm kind of curious what are you working currently that's exciting you the most in the next you know few months, next year.
• 18:47
  SPEAKER_02: Right.
• 18:48
  SPEAKER_02: Well, you know, right now the most exciting layer, I would say it's agent K guy, apply it to NDF.
• 18:53
  SPEAKER_02: If you look at you know NDF, I would say there are two big faces, right?
• 18:57
  SPEAKER_02: You have the pre-campaign, it's all about budget allocation, partner activation, um, you know, uh, and and then you know campaign preparation.
• 19:05
  SPEAKER_02: And then you have post-campaign, right?
• 19:08
  SPEAKER_02: It's all about uh making sure that you know you validate your campaign, you do the payment, you align with you know all the things related to widget and compliance.
• 19:16
  SPEAKER_02: So for me, both can be completely reimagined with AI agiotic um that operate autonomously.
• 19:24
  SPEAKER_02: We are moving into a uh into a world where instant is becoming the new standard.
• 19:30
  SPEAKER_02: And and at HP, we are working very hard to make that happen to our partners.
• 19:35
  SPEAKER_02: Now I can I can't share all the details yet, Effe, uh, but uh some big innovation are coming.
• 19:41
  SPEAKER_00: Amazing.
• 19:42
  SPEAKER_00: Well, Bilar, thank you so much for joining us.
• 19:44
  SPEAKER_00: I have one last question before I let you go.
• 19:46
  SPEAKER_00: Uh, we always end the podcast by asking our guests to invite the next guest on the podcast.
• 19:50
  SPEAKER_00: Uh, who do you think we should have next who can explore, who can help us explore more on this topic and how Web3 can uh revolutionize the channel?
• 19:59
  unknown: Well
• 20:00
  SPEAKER_02: If he first thanks for having me today.
• 20:02
  SPEAKER_02: I've really enjoyed the the conversation.
• 20:04
  SPEAKER_02: Maybe for your next guest, I would recommend uh Christian Catalini.
• 20:08
  SPEAKER_02: Uh he works at again the center section of NCNT, innovation, and Web3.
• 20:13
  SPEAKER_02: Uh he's the founder of the Crypto Economics Lab at uh at the MIT.
• 20:17
  SPEAKER_02: And I think he would be an amazing uh voice uh for you audience.
• 20:21
  SPEAKER_00: Well, thank you for your suggestion, Bilal, and Christian, if you're listening, uh I'll be reaching out to you and hope we can get you on the podcast.
• 20:26
  SPEAKER_00: And Bilal, I'm really excited to see the next steps in this uh progress.
• 20:31
  SPEAKER_00: I think you're working on some really interesting innovative stuff that really solves uh the major challenges that everyone sees on the channel.
• 20:38
  SPEAKER_00: Thanks for joining us and see you in the next episode.
• 20:40
  SPEAKER_02: Thank you, I think.