Applied Series: Fashion's Blockchain Truth Engine with QBrics CEO Rakesh Ramachandran

Why Blockchain and Fashion?
Rakesh Ramachandran and Peter Jeun Ho Tsang unravel the complexities of blockchain technology and its potential pivotal role in the fashion industry. They reflect on the anticipated shifts towards decentralisation and automation in fashion production, in which Rakesh believes that blockchain brings promise of a transparent and sustainable fashion ecosystem. With his startup QBrics, Rakesh helps listeners understand what is blockchain, how his low-code platform enables better digital workflows, and the ways the technology can be applied to fashion.

Fashion's Truth Engine
Featured in chapter 3 of the book, Fashion Tech Applied,  Rakesh makes a case for blockchain platforms functioning as a 'truth engine' that ensures data integrity and trust. Hear Rakesh's analogy of a garment's life akin to revealing the 'karma' of clothing, and discuss how this emerging tech equips consumers with the power to make ethical and sustainable choices. However, this is not without challenges from larger fashion corporations and the like.

Find out about QBrics: qbrics.com
Connect with Rakesh on LinkedIn.

*EXCLUSIVE OFFER* -20% discount for podcast listeners on the printed or ebook of Fashion Tech Applied. Purchase your copy at Springer here using the discount code*: 08cWPRlx1J7prE

*offer ends end of June 2024

Transcript

Peter Jeun Ho Tsang: 0:03

Fashion Tech Applied is published, my co-authored book taking you through six chapters uncovering the technologies and innovations powering the fashion industry. I'm Peter Jeun Ho Tsang, founder and CEO of Beyond Form, and welcome to the special podcast series Applied. Each episode, I'll be sitting down with incredible fashion tech professionals that are featured inside the book. On today's episode, I'm sitting down with Rakesh Ramachandran, founder and CEO of QBrics, a blockchain platform enabling users to create digital workflows without the need for heavy coding. Blockchain a buzzy word within the last five years or so, but the use of it is so pretty nascent within the fashion industry. There are plenty of opportunities, including traceability, transparency and authentication. Rakesh is featured in chapter three of the book, where we talk about the connected supply chain, and in this episode we unpack how the technology works and what it may mean for the fashion industry.

Rakesh Ramachandran: 1:02

There is no delete button in Karma, so the blockchain, the truth engine, is the Karma. It's a chain of Karma which is around. Whatever transactions are used, that be the general use that we make it for. If it's a fashion product, it shows where it was produced and what's the Karma to make it into a final product.

Peter Jeun Ho Tsang: 1:22

Let's get to the conversation with Rakesh on this episode of venturing into fashion tech. How are you today, rakesh? I'm doing very good. Peter. That's great to hear. I'm so excited to hear about Kubricks and what you're building for the fashion industry, specifically, transparency and traceability with blockchain Super interesting topic there. But I just want to set the scene for our listeners. So, factories of the future what will they look like? The question for today's conversation Fashion projections still mainly relies on cheap manual labor to produce 100 to 150 billion garments per year, so there's a huge quantity of volume.

Peter Jeun Ho Tsang: 2:07

However, the fifth industrial revolution is upon us, whereby men and machine will have a more symbiotic relationship to automate tasks and achieve greater efficiency. So hopefully, solutions like yours, rakesh, is going to enable that fifth industrial revolution a little bit sooner, shall we say. And specifically for your solution, you are dealing with blockchain. It allows tools to be built on top of it for transparency, and it is a secure database shared across a network of participants where up to date information is available to all participants at the same time and that's just a definition by McKinsey. Some of the benefits include reduced risk and lower compliance costs, cost efficient transactions, automated and secure contract fulfillment. So it has many use cases. You're utilizing it in a specific way for the fashion industry, rakesh, which you're going to tell us a little bit later on. But to start off with, I want to know a bit about you. Tell us about your story, rakesh. You don't come from the fashion industry. How and why did you get into building a blockchain solution?

Rakesh Ramachandran: 3:16

My journey almost started six to seven years back after quitting my job. I was thinking what's the what do you want to do in your life? So I had kind of a soul surge and I said to myself oh, I have the behavioral traits of becoming an entrepreneur. So when you want to become an entrepreneur, you usually start with an idea that you're passionate about, that you like. So in my first instance, I did some experiments with building an organic food supply chain. That was completely non-tech. That was an experiment that I carried for about six months and after a few learnings I said to myself what's the best thing I'm going to build? So that was in the around quantum computing you can say super high tech. We did about like a six month research and then we progressed to creating an encryption method for blockchain and we got a patent in the US called that. So that's the story where we started with blockchain, we built Qbricks and then we start. It's been about six to seven years of a journey now.

Peter Jeun Ho Tsang: 4:34

Why did you decide to get into this technology side of things? What interested you?

Rakesh Ramachandran: 4:39

Technology has always fascinated me. I started my career at Dell at 18 years, so I had the opportunity to play with computers and technology from a very young age, particularly blockchain. The world needs a truth engine. In today's world, biggest difficulty for businesses as well as individuals is what data to trust, and the ability of blockchain to create that the true tension, I would call it as that. The trusted data is a very interesting aspect which attracted me to continue building on top of that. The second factor is it's distributed nature, just like internet. You can't just bring down a blockchain. You can't bring down internet, because everything is connected, and I think it reflects the interconnectedness of humanity as well, in a way where everything is connected.

Peter Jeun Ho Tsang: 5:40

I think it's interesting how you call it a truth engine, and I think that's the key word here, especially for consumer products like fashion, and allowing consumers to know the truth about where the products are coming from, how they're moving through the supply chain, is exactly just that Trying to understand what is the truth, and I think more and more customers are wanting to know what is the truth. What are they wearing and how is it going to affect the planets? In a certain way, you're obviously using blockchain to do that. In layman's terms, what is blockchain? Because it can be confusing to understand.

Rakesh Ramachandran: 6:20

I think the right way to think about blockchain is one very graphically, it's like a tree, and from the base of the tree you have different branches, but if you go to any branch, you can always go back to the root or the trunk, the main trunk of the tree In blockchain. Technically we call this a vertical tree, but we can think of it as an actual tree as well. That's one way to think about it. So a blockchain is a block by block of sequence of events, and what it does is it allows any common layman to figure out what happened was the previous event.

Rakesh Ramachandran: 7:10

I also call it it is like your karma. The beauty of your karma is you can say that you have done mistakes in the past and you can correct it. Like you can do something today which will reduce the negative or amplify the positive effects, but you will not be able to erase your past. There is no delete button in karma. So the blockchain, the truth engine, is the karma, is a chain of karma which is around whatever transactions or the general use that we make it for. If it's a fashion product, it shows where it was produced and what's the karma it took to make it into a final product.

Peter Jeun Ho Tsang: 7:58

I really like that, but it's almost like a spiritual element on fashion, tech and technology, that karma element. Actually, nobody's ever explained blockchain like that to me previously, but it makes sense. It's about your history and you can't erase that history. It's always going to be there with you, and I guess the same principle is applied to products and, of course, in this case, fashion products. When it comes to Qbricks, though, it isn't necessarily just for the fashion industry you have used it in other verticals as well. So what is the solution and how can it be applied to the fashion industry?

Rakesh Ramachandran: 8:37

Regardless of the local or a no-code platform, we want to enable people who are not necessarily blockchain experts to use blockchain.

Rakesh Ramachandran: 8:49

So if I look at the evolution of blockchain and many other high tech things, it has always been difficult for a common man to finally use it. Usually, it starts with a very selected niche group of hobbyists trying to use the tech. We, of course, went through that cycle where we had ourselves to figure out a lot about blockchain, which enabled us to think about a business model and a market gap where you could introduce a low code or a no code tool so that a person with an average or even a little bit of tech background could start using a blockchain application. And in terms of fashion industry, I remember from our previous conversations fashion industry allows more probably more Excel sheet, a Google Drive or a Microsoft Excel sheet that you had to use a tech product. I think for that particular audience, this would be a better approach, something where they could drag and drop things using a user interface, rather than trying to get them to learn more about the blockchain.

Peter Jeun Ho Tsang: 10:08

Absolutely agree with you there, rakesh. In terms of the fashion industry, many professionals still utilize spreadsheets and for some reason, this industry does love their spreadsheets for some reason, especially in the supply chain sector buying and merchandising as well. I have to say previously, in my previous roles and other clients, I was doing spreadsheets in the most rudimentary way and such a time consuming way to build out a product range or to catalog a product range, and I was always thinking there must be a better way to do things and then to push this entire catalog through. Actually, we were working with six or seven factories out in China. There must be an easier way, streamlined, where to track all of these products through these seven factories that we were working. This was in the late 2000s, early 2010s, where I was working with these factories, and I don't think it has changed that much since then. I still see and hear professionals in the industry still working on this very manual method, so I think there is a huge potential there.

Rakesh Ramachandran: 11:24

In terms of conversations that you've had with the fashion industry, what has been the feedback been like for something like Hubricks From our limited conversations that we had, one people loved the truth engine aspect of it, and what I see is the need for sustainable fashion is going to be a big talking point and how something like blockchain would help. So, as I see also the evolution in terms of climate tech, the growing problems of climate, there is a huge movement of fashion industry going to go probably like carbon neutral Hence it becomes all more important to know where your materials are getting procured, who is designing, where it's getting designed, where it's actually getting manufactured. All these things are quite important for someone to know their carbon footprint. So tracing the supply chain is becoming quite important.

Rakesh Ramachandran: 12:31

I also spoke to some firms who are on the other side, who are in the distribution side of the fashion industry. They usually use large data management tools you can go for the likes of Walmart and Amazon. However, they also, even after using larger master data management tools, as they call it, as they are still searching for something like blockchain to give them actual transparency, traceability of their supply chain. So that is where I see the need of the market and, in terms of the adoption, I know quite a few startups who are looking to create that in the fashion industry and I think, as in the next four to five years, we would see the fashion industry moving towards more into the blockchain ecosystem. Some of the big brands have already done it using NFTs, and I think it's only a matter of time before they move their supply chain as well.

Peter Jeun Ho Tsang: 13:36

So we feature Qbricks in chapter three of the bug. Fashion tech applied, but obviously we talk about traceability and transparency. You mentioned a little bit there as well. I just want to go back to actually what you discussed earlier about the solution allowing a block by block process to view data. How does this granularity in data presentation benefit the brands and how do users interact with this certified data through prompts like QR codes or spectrometers?

Rakesh Ramachandran: 14:07

One of the best real life scenarios in conversation. So I was in Dubai and on what let's say, dubai is known for perfumes and you have some of the big brands over there which are marketing to its their perfumes, for example, and of course then you have the Other brands into luxury goods as well. Now it is very difficult for a consumer to know which is the original what I would say the original product. How does he know, you know, which is the right one? And I always thought why there is no QR code In a particular product? Why is it not possible for someone to just scan a particular QR code, be able to Know if what he's actually buying is genuine or not? So having genuine goods, being able to simply have a QR code which helps them consumers identify, I think is one good, good use case.

Rakesh Ramachandran: 15:14

The second comes from the Certificate of purity, especially applicant for things like diamonds a high-end luxury goods and watches, etc. Where the value of the Particular product is directly tied to the Genuinity and the certificate that you could possibly get from it, and I've always seen that something which is electronic. Imagine you could buy a particular brand and your certificate automatically comes to your Google wallet or Apple on it and you always have it there whenever you need it. I Think that would be the future.

Peter Jeun Ho Tsang: 16:07

For fashion, specifically, the supply chain, the production, the middle part of the value chain. It is one of the hardest parts to transform by technology, just because you know the very nature of production and all the supplies and stakeholders involved is just a huge Network. It's, most of the time, is not owned by the fashion brands. It is third party people that they are working with. How do you think the industry can overcome those challenges to be truly transparent and traceable, including, you know, blockchain solutions such as yours?

Rakesh Ramachandran: 16:42

What I feel is there is one. There is, of course, we all agree, the gap of when there may not be, you know, technical expertise. However, when technologies become more user friendly, I believe the adoption could really take off. So one is about how easy you can make tools for people to adopt, and the second part of the problem is identifying the right problem areas to work on. Many times, technology becomes like an old problem solver. People look at it and tend to look at it that way. However, to get a real adoption, it becomes very necessary to have a particular focus and and define clearly the problem that one would like to solve using a technology.

Rakesh Ramachandran: 17:38

The third aspect of Getting I would say this is a form of a digitization or digital transformation.

Rakesh Ramachandran: 17:46

Now, with the AI Coming up, the need for digital transformation is going to be very high. But I do also see the challenges that, for example, some of the manufacturing is happening in the developing world, whereas the actual Design in the fashion industry is done in the developed world. So, and the developing world is fast catching up in terms of digitization. So, with digitization, have with the right problem areas and With an easy adoption, it is possible to overcome the challenges and be able to get to the Final output. And since there is a lot of pressure on brands already with the AI, I think digitization is just inevitable. We are already looking at how creative people are a bit worried about the chadgivities of the world Recreating there, using their designs and recreating things. So there is already a disruption happening, which I'm sure is happening in the design part of the things, which makes it even more Imperative for the brands and companies to start completely digitizing their supply chain, because I believe whoever is Ahead in the digitization process ultimately will become a successful winner in the market.

Peter Jeun Ho Tsang: 19:11

I completely agree with that sentiment is the ones that are Advancing faster than the others. They're going to be the main big winners, and I don't necessarily mean that's going to be the big boys necessarily, because the big boys quite often fun is so difficult to, you know, adopt the technologies or just to get sign off. Even if they have the money, the buying can be notoriously difficult. We speak to large corporations all the time. I don't know if you found this, rakesh, but quite often there's quite a big pushback just because of the company culture that is created within the site there, the big brands. I don't know if you've experienced that at all.

Rakesh Ramachandran: 19:48

Yes, I have experienced that. I've dealt with very large corporations. It is quite difficult to move ideas and solutions in different layers of people, committees, and different stakeholders and decision makers. I also believe that these layers of decision makers do tend to work quiet, very efficiently. Someone is able to create that need for urgency. So I think with carbon climate tech, ai, things are now putting a lot of urgency in the brand and companies to become digitized.

Peter Jeun Ho Tsang: 20:34

As an outsider from the fashion industry, what have been the toughest challenges for you to overcome Trying to enter this vertical? Is it getting conversations, people to take you seriously, Trying to explain what it is that you're trying to do? What has been the toughest part about all of it?

Rakesh Ramachandran: 20:53

Sure, I think it's almost in a very candid way. It's like the left and the right parts of the brain. So the creators have a very different way of thinking than a tech guy. The tech guy thinks in terms of sequences. Right and creative brain thinks a lot more holistically and circular thinking. I would call it as. So when we tend to explain things to people, we have like a flow diagram, flow chart in our mind, and the creative side of people, especially in the fashion industry, think more at the entire input and output way, being able to deeply understand the problems and be able to talk in terms of let's call it as a return on investment. So there are always going to be new metrics because each industry have their own metrics. So the fashion industry has a set of metrics and we need to be able to communicate to them in some of the metrics that they would like.

Peter Jeun Ho Tsang: 21:58

I can just imagine you, Rakesh, with like a flow chart whizzing around inside your head. Is that how you really think that's an?

Rakesh Ramachandran: 22:06

interesting thing. Yeah, more than the flow chart, I think it's about sequencing right. It's like thinking that something like A happened, so the B should happen. That's the scientific thinking, or the tech way of thinking. I think in physics there is an interesting theory. It's part of the chaos theory. There was a beautiful butterfly who was flapping its wings somewhere in South America which caused thunderstorms somewhere in Antarctica. That's one way to think about how things could happen in the real world.

Peter Jeun Ho Tsang: 22:46

So essentially, the butterfly effect is what you just described there. So let's just go back to the number that I said right at the start of today's conversation. There are between 100 and 150 billion garments produced every year. Obviously, the water doesn't need that many garments in the world to be produced every year. So obviously, there is a lot of toys, there's a lot of waste, there's a lot of everything. When it comes to the fashion industry, this can be very confusing for the consumer how to make the right choice, especially if you want to be a little bit more sustainable in your consumption and to be a little bit more ethical in your choices. So, with blockchain technologies such as yours, rakesh, how can consumers use it to make informed choices about, for example, the fabrics and the fibers used inside their products, and what impact do you think it's going to have on the way they consume in the future?

Rakesh Ramachandran: 23:41

I think with the digitization of the supply chain, I imagine a world where I, as a consumer, go to a store, I look at a particular fabric and let's say there is a QR code and I just scan it and the QR code goes to a website where I see, for example, the carbon footprint, how many hours of labor has it taken to produce this particular garment? The second part would be very interesting is if I could get like a comparison. A brand could introduce a more premium part where they could say this is completely recycled and they could actually show why it is people, why people might be willing to pay a 10% or 20% extra dollars on that particular piece of garment. So the ability of brands to clearly articulate the value and the sustainability that they are willing to bring into a garment would be very interesting. So the first phase would be digitization. The second would be the representation of that data and being able to do that.

Rakesh Ramachandran: 25:01

The next part, where I think blockchain would play a very big role, is a more personalized fashion. So right now, what I see is that the fashion and the clothes that I consume is kind of part of a mass production engine. I as an individual has little representation in that it includes my measurements, what colors, etc. That I like. So I believe, as manufacturing gets more digitized, we would definitely go to a world where I could order something that fits me always perfectly.

Rakesh Ramachandran: 25:43

It's not exactly the old ways of bespoke and tailoring, but in a very much more smarter way, enabled by technology. So there are a few startups who are working on what I would call personalized fashion, where the brands already know about what I want, what are my measurements. Even blockchain would give a very secured way of storing that information, with privacy, and the brands being able to create personalized fashion would be another thing. Yep, so that's where the future of the world would be. We go to a store. We know what the particular brand and the garment represents, where it actually came from, how many people probably worked on it and what was probably the carbon footprint. And what it all does is it enables consumers to make better choice On that.

Peter Jeun Ho Tsang: 26:43

Note on On the Future. Hopefully we're all going to be able to do that in the future. Obviously, not every brand has it at the moment. I just want to finish off this conversation with a quick fire round of questions, rakesh. So the first answer that comes to your head are you ready? Sure, did you already purchase your copy of Fashion Tech Applied? We have seen it in Amazon as well. Nice plug there, rakesh. It is available on Amazon. Favorite tech gadget you can't live without.

Rakesh Ramachandran: 27:12

It's a tough choice between a phone and a MacBook Pro. I think I'll go towards my phone.

Peter Jeun Ho Tsang: 27:21

You can these days live in a phone even without a MacBook, so the phone Quick tip for brands looking to enhance their supply to hate transparency through technology.

Rakesh Ramachandran: 27:31

The first answer would have been just contact me at QFREX, but a better answer would. A better thing is to have someone who has a passion for technology at QFREX. Have one person at the C level who is passionate about tech.

Peter Jeun Ho Tsang: 27:53

I absolutely agree with that. I think every corporate, or even not a corporate, needs to have something that is going to be the champion inside the company for everything to work properly. But that's another conversation. One way to describe the future of fashion production More decentralized, more distributed and more automated. Best piece of career advice you've ever received, I think the best was two reviews.

Rakesh Ramachandran: 28:20

It's very hard to see which one is best, why you will fail to have a good career. By Larry Smith. He's a professor at University of Waterloo and probably the Steve Jobs Stan Soutt commencement address. That's the second best, thank you so much for your time, Mikesh.

Peter Jeun Ho Tsang: 28:38

Thank you, Peter.

Rakesh Ramachandran: 28:40

It was delightfully great and pleasure talking to you.