[ENG] Hashed People : Decentralized Open Research Eco-system, from CEO of Red Pulse, Jonathan Ha

Red Pulse, is a market intelligence platform covering China's financial and capital markets. Their  'Open research platform' wants to connect industry experts, practitioners, and professionals together to share their views and analysis to a global audience. Hashed Post interviewed their CEO Jonathan Ha. All questions were answered directly by Jonathan.

Can you briefly introduce yourself, including your history?

My name is Jonathan Ha, and I am the founder and CEO of Red Pulse. I was born and raised in California, and then attended the University of Pennsylvania, studying computer engineering and economics. After 5 years as a management consultant in New York, I attended business school at the UC Berkeley Haas School of Business. I first arrived in Shanghai in early 2010 to build and oversee the consulting division at boutique firm Z-Ben Advisors, where we focused on providing advisory services to asset managers seeking to expand their business in China.

Jonathan Ha, CEO of Red pulse

How and why did you start Red Pulse?

While at Z-Ben Advisors, I realized that a major shift was taking place, in terms of financial regulations and market opportunities. Global institutions were given much greater opportunities to invest and participate in China’s markets. At the same time, there were few sources of market intelligence, in English, that provided the necessary market coverage to understand these opportunities. Red Pulse was launched to address this unmet need.

What are the use cases you are looking to cover with Red Pulse?

There are a couple of key use cases. The first one is what we call an open research ecosystem. This allows industry experts and practitioners share their insights onto our platform, and get compensated with RPX. This is the most basic use case. And insights can take a form of a basic event summary note. Events could be M&A activity, regulatory policy change, major government announcement and corporate events such as joint venture or new product launch. This could cover all industries.

To be more specific, the first type that I mentioned, the event note, could the easiest to write. Our major concern is the quality. One of the ways to ensure the quality is to have some very strict policies around the structure and content on the platform. So the platform is not a place where anybody can write in any format. We need to create more rigid structure to ensure the consistency in quality.

The other two include company notes, which is very similar to sell-side research, and industry and trend notes, which is a more broad note that cover the entire industry or the entire market trend.

How do you ensure credibility on content?

Credibility is determined by a complex algorithm that takes into consideration several key factors. A major factor is the rating determined by a crowd of peers. Instead of a simple one vote per person determining influence, the voting is also weighted by each individual’s credibility according to key topics and categories. For example, if a healthcare specialist posted a healthcare trend research report, and another healthcare expert (based upon their credibility) decided to vote favorably on the content, then that vote would carry much greater weight, as compared to a non-healthcare specialist.

Credibility scoring is also determined by the overall track record of the contributor, self-reported education, certifications, and work experience, and the degree to which the contributor is willing to tie their real-world identity to their online contributor account.

What made you use blockchain?

It is a very good question. Many people pointed out that the decentralized, immutable aspects of blockchain don’t seem to be very utilized in Red Pulse platform. That’s actually right. Red Pulse platform is not decentralized. It’s actually quite centralized. It is to ensure a certain degree of quality. The quality is achieved by the content structure and rules regarding what kind of content, and how they are created and shared on our platform. But it is also dictated by a complex algorithm that determines what is the value of each contribution. If it is decentralized, it would be difficult to manage and oversee. So we made a very conscious decision to maintain a very centralized platform. The reason why we made cryptocurrency is because the compensation mechanism is using our own RPX cryptocurrency. 

The reason why we need this is because it allows us to create a token ecosystem that allows us to scale the platform in the incredibly fast pace that would not be possible using just fiat. Using just fiat, it would almost impossible to scale up because we would essential wait for banks to pay us and enough experts to join our platform. It’s a chicken or egg problem. 

We are using cryptocurrency in two things. Number one is to scale very quickly. Number two is more complex. We have a built-in inflation mechanism which is like steemit does. We are minting a small amount of new coins continuously. We use this supply of new coin as ongoing compensation to these voluntary contributions of research content. This allows us to provide content free of charge to financial institutions and corporates, and we don’t have to continue paying out of the company’s reserve.

Once we have financial institutions and corporates using the platform along with the industry experts sharing their insights, now we give a new opportunity to these financial institutions. They can request custom insights. This is something that we will do charge for. We charge for facilitating the matching between those who request and appropriate experts. 

In the website I read 60K already signed up as Red Pulse professional researcher. How are your key performances currently?

We reached 7,000 people that have been using the internal version. 7,000 people are actively using the web and mobile platform. 60,000 people are receiving the market intelligence daily through email or mobile app. 

The difference between 7,000 and 60,000 is that 7,000 are using the platform more actively. They are logging in, saving search queries and doing more in-depth research into some of the data points. 

And what they are logging into is a traditional platform where my own team is producing content on the daily basis. I’m happy to announce that initially we only covered 15 to 20 pieces and now we cover up to 40 key market data points on the daily basis. Now the objective is to scale that much broader. 

Now about 2/3 of the content is produced by my own staff and 1/3 is produced outside of the company that we are paying in RPX. So already we are experimenting with the economics of creating content as a combination of internal and external contributors.

There is a lot of people reading and using it already. Contributors-side is not 7,000. It is actually less than 70 people. On the daily basis, we have 6 people internally. We have over a dozen people outside contributing. We are developing the external platform side a bit more slowly and carefully because our concern is that if we open it up broadly for everyone to contribute, the quality would go way down. And we already have active clients such as the major banks. So we have to be careful about who we invite onto the platform. 

Which stage of development are you right now?

We are about to launch our new Django system that will replace the existing system. Over the last three years, we’ve been using LAMP stack. And now we are moving to python and Django. 

Externally, we know that it is not very visible to people. Of course we will be sharing screenshots and walkthrough how it works differently. There are some additional features and that is the API system. It will allow our existing financial institutions to plugin and access our database in realtime and query the complex queries. 

Who are Red Pulse’s competitors? And what are main differences of Red Pulse from its competitors?

In a broad sense, Red Pulse’s competitors consist of any source of market information on China. This includes news platforms, blogs, financial data and research terminals, consulting firms, and expert networks. In a more narrow sense, Red Pulse is building a cloud-based platform where industry professionals and experts can share their knowledge and be compensated in cryptocurrency – truly a unique platform that has no direct competitors.

Red Pulse understands the balance that is required between providing access to critical market information and maintaining context and relevance in the face of information overload. We use AI and machine learning where it makes sense: for data-intensive tasks such as content tagging, recommendations, and expert to research request matching. Meanwhile, we leverage human contributions at scale via our open research platform, because people are still the best at abstract thought and analysis. The RPX token allows us to incentivize contributors to scale the platform quickly, without having to wait for clients to come on board first, solving the “cold start problem”.

Our competitors often view technology as the core of their offering, but we have a more nuanced view, in that we implement technology as a means to an end, understanding that each situation requires the right tools and approach.

Red Pulse also rewards people for translations. Are research and translation reward separated or translation reward dependent on original research post?

As of now, the research and translation rewards are tied together, as it is challenging to separate the translation effort versus the analysis effort. While indeed possible to do, it would be more of a burden on the readers that score the content. We want as much user-generated scoring as possible, so aim to have as simple and straightforward of a process as possible.

As bigger RPX holders get greater voting power, some users with many RPX might vote on biased/wrong post, creating disruption. What policies/solutions do you have?

Originally, our intent was to provide greater RPX holders with more voting power, as one major use case of RPX. Since then, our thinking has evolved. This original method would incentivize bad behavior such as the formation of voting cartels, and voting on your own content, rather than honest voting on other contributors’ good content.

Our new approach is to position RPX as a “pre-buy” of custom research, as well as premium services such as real-time access, alternative data, training courses, and certification. This provides a more “real world” demonstration of intrinsic RPX value, rather than a rudimentary “influence by vote” system, which is easily gamed and manipulated.

Can you describe your team? how many engineers do you have in your team?

We have been steadily building our Red Pulse team since our token sale completed in October of 2017. James Maher is our new Chief Operating Officer, overseeing our internal research team, legal and compliance, and finance departments. We’ve also recently hired key staff in marketing, sales, and market development.

On the product and engineering side, Dylan Blankenship is our Chief Product Officer, and City of Zion member Chris Hager is our Director of Engineering. Of course, my co-founder Stanley Chao, who heads up our Data and Analytics, is a key contributor as well. We’ve brought on board five back-end engineers, two front-end engineers, several UI/UX developers, a digital designer, and continue to work with part-time developers in the areas of mobile, front-end.

Chinese NLP is important to this project but at the same time it sounds really hard. Which stage have your team made so far?

Stanley Chao has been leading our Chinese NLP efforts for several years now, and we are continuing to build our capabilities by hiring data scientists and machine learning specialists, with a focus on Chinese language. Furthermore, as part of our APEX partnership, APEX has been sharing proprietary Chinese NLP methodologies and IP with us, where relevant and appropriate. 

The English and Chinese NLP development represents a core element of the matching engine, connecting the right industry experts to research prompts, in an automated fashion that allows us to grow our open research platform, providing greater accuracy and relevance in a scalable way.

What do you think is the most important marketing strategy as a content and information ecosystem?

I think the most important marketing strategy is to demonstrate the value. Because so much of the marketing is about giveaways and promotions. They are sort of flash. That does not really capture Red Pulse. Red Pulse’s fundamental element is professionalism. We’ve always been trying to avoid those kinds of promotions. In fact, the best way to demonstrate our capabilities and value is to build a platform, and to build a platform well and as soon as possible. 

But at the same time, we are also developing some very important marketing strategies and campaigns. This is focused on marketing for people that actually would use the platform. These are on the one side, the experts who need to be aware that Red Pulse is another platform or in fact the best platform to monetize their expertise. It’s going to be much more efficient than working with old and antiquated expert networks such as GLG. Everyone knows GLG and it created a very successful business. But the same time, they are not leveraging technology such as AI, machine learning or NLP to try to scale the process. In fact, they rely very heavily upon humans. So what we need to do is to demonstrate the value that we bring to these experts.

The other key market or community that we are looking to develop are the financial institutions or corporates that are using the platform. These are the recipients of the research and the expertise. We need to demonstrate to them that the platform we are building is unique. It is providing a very strong combination of value and cost-effectiveness.

Are you going to move to markets other than China?

It’s not just long-term. We expect, in 2019, to start expanding beyond China. Our initial expansion is going to focus on APAC and the surrounding region. And then we will move onto Europe as well as the Americas. Our belief is that the business model we are creating, what we call that cloud-based research and expert network, is disruptive in every market. It’s not just China. 

The reason we decided to start with China is because Red Pulse started out focusing on China and it happens to be a market that is massive, scalable and very little understood. It have a very interesting dynamics. People really need information on China but some they just cannot get it. 

Do you have partnerships you want to introduce?

We are proud to continue our ongoing partnership and collaboration with NEO and OnChain, having been the first ICO and major dApp on the NEO blockchain. We are also informally partnered with City of Zion, given that our Director of Engineering Chris Hager is also an active member of CoZ. And on a more formal basis, Red Pulse is partnered with NEON Exchange (NEX) to integrate a crypto-fiat payment gateway system into the Red Pulse platform, as well as APEX, a blockchain-enabled consumer data platform, through which RPX ecosystem participants can access a vast range of retail products and services.

Could you explain the advantages of using NEO platform?

One of the biggest advantages working with NEO is that I’ve been able to learn some very good lessons from the previous blockchain infrastructures. The way that I see the blockchain infrastructures being developed over time is that there are of course originals that are continuously pioneering, like Bitcoin. But they also carry their baggage so to speak. Bitcoin is slow. Ethereum has its own scalability issues. What NEO has been able to achieve in a much more efficient manner is the efficiency and throughput. I think there is a lot of advantages from not being the first mover and being able learn all people who went before. As long as you can take lessons and translate it back into better technology, it is a huge benefit. That was the key reason why we chose NEO. 

Generally speaking, it really depends on each project. There has been a trend taking place where many of the new projects are focused on creating the entire blockchain, not just dApp. In those cases, it probably makes more sense for them to initially do token sale in ERC20. It is faster, easier and easier to audit, and has more developers. Even though NEO is quite advanced in a technological stand point, it is not as mature as Ethereum. Ethereum has so many dApps created and ICOs. NEO is not staightforward. If you are planning to do a hot-swap into your own chain. It’s much easier to do in ERC20. 

Our plan is to continue working on the NEO blockchain. We don’t have any mainnet or testnet is is intent to go up. Our application is dApps dependent on NEO. A lot of projects out there focus on the chain. Especially if you want to do an ICO, it is a bigger story. People want to tell as big of a story as possible and raise money. It’s a huge undertaking. The time to market is much longer, and the ability to demonstrate the actual value into the market is much tougher because you have to create a chain along with building a real-world application that actually generates value for people. In our case, we are much focused on generating value and demonstrating that there is a real world use case for blockchain, more than just for transactions, but a new type of sharing economy. This is a topic that I’m personally interested in.

Using token economics, by implementing a small inflation mechanism, we can produce a resource of incentive or capital to compensate for contributions into the ecosystem. That allows us to create a really interesting dynamic. And it can still retain a lot of aspects of true sharing economy. 

What do you think about market crash happened recently?

For those that have been involved in cryptocurrency for a while, you’ve experienced ups and downs before. This is such a new space that clear regulations and overall education are still sorely lacking. It brings to mind a quote from renowned investor Warren Buffet describing traditional capital markets: “… it is a device for transferring money from the impatient to the patient”. Perhaps in the case of crypto markets however, that transfer takes place at a much faster pace.

What do you think of regulation?

I think regulations are critical to establishing a mature, transparent, and sustainable market. Red Pulse welcomes fair and well-informed regulation, as blockchain technology has many merits that will benefit major industries and the overall economy. Regulations may initially seem to be a hindrance, but ultimately it is a framework that will allow much greater acceptance and adoption by a global audience and community.

Do you think Korea is important market if yes why?

Absolutely. Korea is important to Red Pulse in several ways. As a cryptocurrency market, Koreans exchanges and market participants represent a major proportion of the global market, and it is critical for us to build awareness of Red Pulse’s vision. Also importantly, Korea views China as a key trading partner and investment target, thus understanding China’s capital markets is a top priority for Korean financial firms and other institutions. For this reason, following Chinese and English language support, we plan to support Korean language on our Red Pulse platform, with opportunities for contributors and translators to earn RPX for their efforts.

Do you have any exclusive information for Hashed Post readers?

We have some more top ten exchanges that are soon be engaging with over the next several months. I can’t say which ones, but we are quite close. I think that’s very exciting from the liquidity stand point. But what I’m most excited about is starting to work on tokenization, integrating RPX into our platform. We just started the development. 

Last words for Red Pulse fans in Korea?

Korea is awesome. It is number one in our mind. We are always very happy to be there to engage with the community. I’ll look forward to be there quite soon.

Especially to Hashed, thank you for the opportunity. It’s always exciting to be able to reach out to our supporters. Hashed has been there from day one. Hashed and NEO were the biggest supporters. We are very honored to have this relationship.

Thank you!

* Red Pulse's Hompage : https://www.redpulse.com/

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