Abstract

Supp is a global network for realtime hospitality shifts. As the uberisation of traditional industries takes place, Supp proposes a model to secure hospitality’s future as a fairer, more transparent and equitable one. Designed by technology and hospitality experts with a focus on the millennial cohort of the workforce, the Supp protocols ensure its dApp is affordable for everyone, and value arising from the success of its model is distributed to its users rather than just benefiting shareholders. Supp tokens can be earned by its users in an incentive system that rewards positive participation within the community. Its dApp and protocols are powered by the ERC-20 utility token on Ethereum’s blockchain. Since we began experimenting with inner Melbourne iOS users in 2017 the minimum viable product has generated over AUD$120,000 in shifts. Having achieved proof of concept we are ready to decentralise and expand the model.


"this app sits in the lifestyle category for young people”

Solution

A minimum viable product has been tested by 1,500 hospitality workers and 300 venues from Inner Melbourne. The venues represent a broad cross-section of the industry from highly regarded fine diners, corner cafes, pubs, event groups, food vans and stadiums. The workforce comprises back-of-house and front-of-house roles including baristas, chefs, kitchen hands and more. Over AUD$120,000 in shifts have been performed with the prototype. Users have been highly engaged in the feedback loop and our roadmap is profoundly informed by these users. As at February 2018, Supp is only available on the Australian iOS Appstore. 

For hirers the value proposition is clear. Hirers post shift to local workers. Pick the best available worker. Workers set their minimum rate.

Why a dApp solution for the hospitality sector?

-       Workers and hirer interests are currently misaligned

-       The old, inefficient and costly recruitment practices are ripe for overhaul

-       Smartphone penetration reached 85% in Australia in mid-2015 but is closer to 100% for the young hospitality workforce

-       User trust in centralised technology giants is waning (Uber, Facebook, Google, Airbnb)

-       Low cost platform

-       The other 60% of the world’s population are about to join the Internet (only 3 of 7.1 billion people are on the internet)

Value proposition

-       Reduced end to end process of finding a worker from an average of 2 hours to 60 seconds

-       Better results due to specialising on hospitality vertical

-       No more headaches

Model

Marketplace model. Worker insurance, platform operating costs

Data

Supp’s proprietary matching algorithm will be used as a recommendation engine to improve results. 

Most qualified workers are selected based on prior job performance, reliability and distance from job. This instant access to a large pool of suitable workers can provide a quick fix for unexpected staff vacancies or known future vacancies.

Collecting data for use in recommendation engine to improve the user experience. Community will have control over future use of data.

Supp screens workers based on job requirements and invites suitable ones to apply, allowing for cherry picking from an on-demand workforce.

Part of worker solution: Online Marketplaces and Casualisation of the workforce: Online marketplaces provide a clear way of building a profile, displaying skills and experience (just as you would build your resume/portfolio but much more efficient) and attract a rating and feedback reviews (just as you would build a word-of-mouth reputation). These systems are designed to replicate the same marketplace mechanics that people use to select a freelance contractor through any other traditional channel such as the seek.com.au.

With increased transparency, online marketplaces provide the opportunity for workers to more easily sell their skills, differentiate themselves from the competition, and therefore earn the best possible rate. In any marketplace, it’s equally possible that the rates of pay could in fact be bid upwards (if demand for certain workers is greater than supply). Online marketplace creates choice for both the hirer and the worker. They empower workers and create new opportunities across a spectrum of different work types and break down rigid career structures, allowing workers to instead make use of their diverse skills in myriad of different ways.

Problem

An analysis of both workers and hirers is required to understand the related but unique pain around staffing in both camps.

Workers/ Demand side of shifts: For workers such as chefs and baristas the process of writing a CV and spraying it across the multiple job boards or pounding the pavement is maligned as laborious and ineffective. For hospitality workers, a major draw card to the industry is the flexible nature of casual work, enabling a fit with other aspects of life, be it study or parenthood. Supp enables that flexibility by helping these workers to side-hustle. The global gig economy is expected to continue to proliferate throughout 2018.  In Australia where the majority of the hospitality labour market is casual, youth underemployment is at an all-time high meaning workers want more hours.

“According to Forbes, now over 40% of the US workforce is contingent and by 2020 it will be greater than 50%. In contrast, in 2005 only 30% of workers were contingent”

The workforce casualisation trend has been building for some time and it is clear old models are breaking down. In Australia, ANZ Bank has published job ad statistics showing that job ads increased steadily since mid-2013. However, at the same time unemployment has been creeping up. Usually an increase in job ads would result in a decreasing trend in unemployment. However, the current statistics are bucking the trend – suggesting a structural shift in the employment market. The trend towards casualisation is already clear as shown by a decreasing trend in permanent employment as temporary employment continues to grow, according to the Australian Bureau of Statistics. Employers are clearly looking to hire workers but on more flexible terms. The mismatch suggests the market will experience ongoing casualisation as employers look to acquire the specific skills and labour they need on-demand, while workers will turn towards alternative, flexible sources of work and income.

People are becoming increasingly savvy about the monetisation potential of their data. They seek control.

Some key concerns of workers at present include:

-       Better pay

-       Less hours

-       Stop the “suck it up” culture

-       Empowerment

**Discuss some key industry issues (social, underpayment, no shows etc)**

Hirers/ Supply side of shifts: The biggest issue reported by hospitality businesses is staffing. Managers in charge of this function waste hours of time juggling the roster, often at the expense of not completing other important tasks. For venues such as cafes, restaurants and pubs a simple, reliable and efficient way to fill staff vacancies doesn’t exist. Venues typically have a small roll call when it comes to back-filling sick leave or scaling up their team to handle an influx of customers. Traditionally the search for staff would involve the time consuming process of “calling around” prospective fill-ins, within the limits of their internal staffing network. Large venues such as Stadiums or event companies need to rapidly scale up and down their workforces using casual staff and usually pay a premium to do so through traditional agencies. The hospitality industry is also robust and resilient through down cycles, particularly in Western countries. The staffing problem is expected to worsen as the industry grows and competition for staff heats up.

“The industry is booming as Americans are putting a growing share of their food budget on eating out”

Some key concerns of hirers at present include:

-       Lack of trust in workforce

-       Staffing turnover is at an all-time high

-       Lack of skilled staff

-       Growth of industry increasing competition for customers

-       ?

-       ?

Hospitality is a bedrock industry which underpins the small business sector in most countries yet no venue is immune from the high staffing turnover.


Market Entry

Melbourne was the perfect launch pad for Supp due to the vibrant hospitality sector and its history as an innovative hub that often sparks global F&B trends.

We are committed to an ambitious user acquisition strategy which aims to concurrently grow supply and demand for shifts. Key elements of our market entry growth strategy are:

-       Supp's main source of growth is currently word of mouth. We achieved this due to our focus on maximising user experience (in-app and off-app). Word of mouth sign ups will continue to be our main focus through app improvements and user testing. 

-       Ambassador Program: leading workers and hirers will be invited to participate in a referral program which can earn them tokens in return for recruiting active users to the platform;

-       Loyalty Program designed to encourage network effects;

-       Trickle Down Marketing: by targeting the best venues and workers Supp will ultimately capture the wider market. It’s impossible to do this in reverse due to trickle down effects;

-       Sequencing markets correctly: we’re initially target global hospitality hubs, one country at a time, starting with Melbourne and Australia. For a sustainable rollout we must consider demand and supply of shifts;

-       Target universities, tourism offices and hospitality bodies;

-       Google ads and social media including, Instagram, Facebook and Twitter accounts; and

-       PR channels including influencers, digital and traditional media

-    Focus on maximizing Supp UX to generate word of mouth sign ups

Key elements of our medium term growth strategy include:

-       Seek strategic partnerships to provide additional revenue streams from the platform;

-       Top level management appointments to strengthen corporate and consumer go-to-market teams;

-       Expansion of digital marketing through additional channels, increasing market coverage; and

-       Localisation of smartphone app to increase global market penetration, including: translation into foreign languages, customized for local regulations.

Blockchain

In 1998 a computer scientist named Nick Szabo wrote a paper called “The God Protocol”.  In it he spit-balled about the ultimate protocol that designated God as a third party who vouched for all online transactions. It would establish the necessary trust and security required to transact peer-to-peer over the internet.

Ten years later Satoshi Nakamoto wrote the whitepaper for a peer-to-peer version of electronic cash called Bitcoin. In it he proposed a distributed trust network that resonated with the God idea. This network would be governed by a protocol that allows data to be safely exchanged over the internet and authenticated by mass collaboration rather than requiring a “trusted” third party like a bank. Bitcoin was the first protocol blockchain organisation but its code was published online (open source) to help others build their own blockchain from scratch (hello Ethereum). Rather than Supp building its own at least initially we will use the blockchain built by Ethereum. A good analogy is Google, UBER, Alibaba, Amazon and Facebook all building their businesses on top of the internet.

A simplified way to think about blockchain is as a digital history of transactions. Only with blockchain this data isn’t stored on a central database; it’s stored in a “distributed” ledger of records. A “block” represents the transaction data and contains a cryptographic hash of the previous block and timestamp. These blocks are stored on a single chain (“the blockchain”) which is replicated across computers in a peer-to-peer network (Napster was used to exchange movies and music in this P2P fashion). Computers in the network are called nodes and some of these nodes may voluntarily work to update the blockchain with new information aka engage in the mining process.

The blockchain movement was reinforced by the launch of Ethereum in 2015 and smart contracts which enables any developer to create a new genre of decentralized apps (“dApps”). Ethereum blockchain is a distributed, open-source blockchain-based computing platform. This computing platform, the Ethereum network, hosts dApps that are executed with chunks of codes named smart contracts; all transactions on the Ethereum network, as well as the computing costs of executing smart contracts, are paid for in the Ethereum cryptocurrency ether.

There are countless in-depth explanations available online for anyone wishing to delve into blockchain in more detail. This section will now focus on how Supp uses blockchain.

Supp has an operational iOS app that will transition over time to be either partially or fully developed on the Ethereum network. We will initially use ERC20 blockchain technology and use a combination on Supp developed ands 3rd party protocols. Per our roadmap, Supp will decentralise aspects of our business model such as governance, beneficiaries, growth and payments. Supp will have its own token to fuel the protocols. The tokens can be earned by users and used as an optional currency of payment for shifts performed. They can also be purchased and sold for fiat currency (AUD, USD etc) or other cryptocurrencies.

Supp will utilise a set of protocols in aspects of governance, users as beneficiaries (ownership), growth and payments.  

Governance. Why decentralise?

Currently Supp’s Management governs the community using a set of guidelines found on its website. The governance protocol removes the need for Supp to act as a central authority. It’s calibrated so that instead of merely hoping users do the right thing, Supp rewards them to do the right thing. And instead of hoping users won’t play up, Supp will charge them for poor behavior i.e. a no-show.

Up until now, playing the central authority was the best solution for some of these instances which are common in hospitality:

·       “No-shows”: A worker has confirmed their presence at a shift but never arrived and failed to notify the manager

·       “Failure to pay”: a hirer fails to pay a worker without an explanation

·       A hirer has refused to pay the minimum hours required by Fair Work (government regulatory body)

·       Arbitrating between a worker and hirer over a dispute

While Supp is mostly frictionless and the above examples represent a small percentage of overall shifts, at scale this represents a significant time burden. Also, some cases are clear cut. Other cases are “he said, she said” situations where it is difficult for a Supp staff to provide reasonable judgement.

For the community to run smoothly without a central authority, Supp uses incentive mechanism design to encourage users to participate in governing the platform. Decentralised governance is relatively immune from bias, human error and political pressure. Any conduct, criminal or otherwise, will be regulated by the usual local regulatory bodies.

REPHRASE/ DELETE: Data privacy. People are concerned about how their data is being used and monetised. As we are aware apps collect endless amounts of personal data. We advocate for the control and collective use of this data to be put in the hands of the users, which might lead to making the data available for betterment of the community in the eyes on the community. (confused lady meme?)

REPHRASE/ DELETE: (Supp is “baking” beneficiary rules into the model which reward users for participation. Instead of the value uplift from Supp’s successful model benefiting only the shareholders of Supp (as is the case with Uber, Airbnb, Airtasker), the users are beneficiaries of the community’s success. In the same way that airlines issue frequent flyer points, for hiring and working on Supp’s platform users, will be issued fungible tokens which can be easily exchanged for fiat currency)

As a result of the instant and free flow of information over the internet, trust in all institutions (government, banks, media, religion to name a few) is at an all time low. Decentralised governance will become increasingly commonplace as the millennial generation grows up.

Payments. Why tokenise?

Profit margins are low in hospitality, thus owners of venues are highly sensitive to prices. Low or underpayment of workers is common in the industry.

Stripe currently charges 30 cents + 2.75% of shift wages for processing payment. Introducing optional token payments will allow users to save on Stripe fees leading to higher wages for workers and lower costs for hirers.

With our MVP we confirmed that higher paid shifts receive more applicants, so workers are also price sensitive.

The more affordable Supp can be, the higher the participation rate and frequency of use by hirers and workers.

Beneficiaries. Why decentralise?

Users are the backbone of the community but in traditional models (UBER, Airbnb, Facebook etc) they wouldn’t benefit from the uplift in value which arises when the community grows. The token system allows Supp to distribute value created to users. Supp’s users become its champions when interests are aligned. It motivates participation and creates stickiness. Reward the early adopters who are integral to the mass adoption of any innovation.

Tighten feedback loop

The users inform the roadmap and help the startup stay on its critical path, avoiding edge cases. Involve users directly in the feedback loop for a better market-fit. Decentralised consensus/ voting system.

A shift from the internet of information to the internet of value.

A transaction is typically the transfer of ownership for a digital asset (i.e. a bitcoin, an MP3, a meme). It is decentralized and distributed

Bitcoin was created with egalitarian idealogues.

In practical terms, a Supp token allows

Mining is decentralised consensus.

We appreciate our model has applications to other industry verticals and have not ruled out a future pivot in these directions. For now, Supp’s team has a razor sharp focus on revolutionising the hospitality industry.

Tokenomics

This new field describes how demand and supply determine the token price in a tokenised community.

Supp uses blockchain architecture to power incentive mechanisms which are designed according to the shared principles of the community. These mechanisms will encourage positive participation and eliminate bad behavior through issuing Supp tokens. Aside from rewarding good behavior the Supp token will represent an optional medium of exchange for shifts, and its function can be expected to evolve over time. Supp tokens can either be instantly converted to AUD, sent to family members across the globe, held onto to participate in Supp governance, or kept in a digital wallet and converted into whatever local currency a barista with a round-the-world ticket requires.  

The price of a token will be driven by supply and demand dynamics. Upward pressure on the demand side will be driven by the increasing utility of the token within Supp’s ecosystem.

Demand-side Tokenomics:

  • More payments in Supp tokens puts upward pressure on the token price. Workers are attracted to receiving tokens as the medium of exchange because the platform fees are significantly lower, resulting in a higher hourly rate. As the community grows city by city the platform shift activity will increase resulting in higher token demand.   

  • Many families are spread across the globe. In hospitality it’s common for workers to support families abroad by sending them a portion of their wages. These people may elect to be paid in tokens that can be transferred to a family member’s wallet anywhere in the world instantly and at almost no cost.

  • Millennials which are the majority cohort in hospitality travel far more than any other generation. While working hospitality shifts in foreign countries they may elect to be paid some of their shift wages in tokens for use in other countries. This removes the need to set up a local bank account which is impractical for short visits. The lifestyle enhancing potential of this is really exciting for anyone in the industry. Without much forward planning an Australian barista could seamlessly fly in to Auckland for a working holiday using their suite of lifestyle apps (Supp – for income, Airbnb – for accomm, UBER – for transport).

    As Supp’s community grows and blockchain becomes mainstream, more users may opt for payment in tokens, thereby increasing the demand for tokens. Acknowledging that today workers may want to be fully paid in fiat, Supp will introduce a sliding scale which can be toggled at the worker’s discretion (full fiat, half fiat/ half SUPP/ full SUPP). In the event of full payment in token, the amount of tokens paid to the worker will be adjusted to represent the current market value of Supp tokens in the local currency. There is high demand to transact on Supp’s app because it saves both workers and hirers time by an order of magnitude compared to traditional ways. Cheaper use of the platform via token payment method will make the platform more accessible and intensify the market efficiencies.

    Suppy side dynamics include a limited supply (scarcity), hard to obtain (mineable through completing shifts), and quarterly buy-backs of tokens using platform profits.

    Users are rewarded according to a payoff structure. Users can commit to a mechanism that grants an outcome. 

    Token Velocity

Users are rewarded according to a payoff structure. Users can commit to a mechanism that grants an outcome. 

Cryptoeconomics – area of applied cryptography design with economic theory.

https://hackernoon.com/making-sense-of-cryptoeconomics-5edea77e4e8d

https://en.wikipedia.org/wiki/Mechanism_design

Token Crowd Sale

The Supp Token crowdsale and the corresponding token creation process will be issued by Supp App Pty Ltd, an Australian Proprietary Limited Company, and will be organised around smart contracts running on Ethereum. Participants willing to support the development of Supp can do so by sending Ethereum currency to the designated address. By doing so, they are purchasing Supp Tokens (SUPP) at the rate of 4,000 SUPP per 1 ETH (approx. USD$0.20 per token) which are sent to their wallet.

There are 3 token issue events in total.

1.     Presale local: 1 March – 1 April

2.     Presale global: 15 April – 15 May

3.     ICO: 1 June – 1 July

For each event, Supp Tokens can be purchased in AUD, ETH or BTC. The creation will be capped (“Soft Cap”) upon receipt of ETH equivalent to USD$5M. This amount is subject to change before the Token Creation event.

If the Crowdsale campaign does not reach its minimal capital goal of $1M all funds will be returned automatically to the SUPP token holders by the Ethereum smart contract. Token Creation has a hard cap: upon achieving this cap, token creation will stop and no further contributions will be accepted. The hard cap amount is USD$10M ETH. Tokens that are not sold during the Crowdsale will be burned automatically by the smart contract