Please describe your proposed solution.
Problem perception: The current postal delivery service in Africa is underwhelming .
Sending and receiving parcels in Africa is a real-life struggle as it is not just more expensive than in industrialised countries but also way worse in terms of reliability, convenience, speed and accessibility. These observations are not just derived from my personal experiences and conducted interviews but even underlined in the Integrated Index for Postal Development (2IPD) by the Universal Postal Union (UPU), a UN body.
Proposed solution: Disrupting the legacy of centralized postal delivery through a Blockchain-based Peer-to-Peer approach.
With this solution someone wanting to send an item from A to B (sender) would match with another one going from A to B anyways (transporter). A transporter wants to make money on the side for taking the item along his/her way.
This is not just the most ecologically friendly delivery solution as it reduces the C02 footprint but also the cheapest and fastest delivery solution for the sender, which opens up the opportunity for a side hustle for the transporter as well.
Thus, a win-win-win situation for the sender, the transporter and mother earth.
For this, we are building an MVP, which is a listed proposal under the Catalyst Fund 9 dApp/Product Challenge, thus not part of this proposal.
The datails on the MVP development can be seen in this proposal: <https://cardano.ideascale.com/c/idea/416992/comments/421157>
With the Output of a working open-source MVP, we want to fund in this proposal the Testing of this MVP on the ground with the targeted audience.
The reason for doing such a step-by-step approach is based on the theory of the Lean Startup method. We want to first test the idea through hypotheses by interviewing potential users of this product in the first place. Then analyse the learnings from the assessment of the collected data (qualitative interviews) and draw the conclusions from it for adjusting our business model and the MVP. At the same time, we test our MVP with people and incorporate the feedback of the user experience through improving the usability and features provided. Then iterate again until a product ready to market is developed.
The implementation of the interviewing, data collection and MVP testing is conducted on the ground with the right stakeholders and potential clients by the WADA hubs in Ghana and Cameroon. The analysis of the data and the conclusions as well as the upgrades to the MVP, will be done by the Peerpost team.
Output: Lots of qualitative and quantitative data ranging from UIX feedback to the knowledge on blockchain, crypto assets and Cardano as well as to opinions on the current postal systems, its drawbacks and improvement ideas. The output is either a positive or negative validation of our idea and MVP backed by customer data.
Outcome: The feedback and data gained from the interviews and MVP testing will ultimately decide if we should progress working towards this solution as a viable use case for the people in Africa or had to pivot to some extent. In case of a confirmation of the general use case, we would generate some learning insights not just for us but for the entire Cardano community on how Cardano, blockchain and crypto assets and its dApps are perceived and what needs to be improved for more adoptions. Thus, this MVP testing also serves as an awareness and information campaign for Cardano since the participants will not just learn about our proposed solution but also about Cardano in general. Lastly, everyone having participated will go home with personally a set up Cardano wallet, which is required for the testing of the MVP.
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The envisioned, full-fledged technical implementation of this solution (not part of this funding proposal):
A mobile App for accessing the online platform for filtering and match-making between senders and transporters, into which Cardano wallets can be integrated for flawless payment and deposit transactions into the smart contracts on Cardano.
Why do we need a Blockchain for this solution?
You would never trust (and pay in advance) a stranger to deliver your item, right? The person might just run away with it. So the issue here is trust. And blockchains, like Cardano, were built for resolving the issues around trust, namely through smart contracts enabling trustless economic interactions merely based on the execution of autonomous and publicly verifiable computer code.
Through a smart contract escrow solution on Cardano setting up the right economic incentives for the transporter to deliver the parcel in the promised fashion, this P2P parcel delivery service becomes trustless, automatic and infinitely scalable.
The transporter will have to deposit a certain amount - set by the sender of the parcel - into the smart contract, which will be released together with the payment for the delivery service (added by the sender to the Smart Contract) by the smart contract automatically once the receiver confirms the proper delivery of the parcel.
Thus, if the transporter delivers way behind schedule, not at all or has damaged the item, the locked payment and deposit will be transferred to the sender as a compensation.
A solution for who?
On the sender side, we see potentially anyone using this parcel delivery service, who wants to send any item to friends, family and relatives at lower costs and in a faster and more reliable manner. Of course, we do not expect that very expensive items will be sent through our service as economic value had to be matched by the deposit of the transport to some extent.
Next to the person-to-person sending, we also identified the e-commerce sector to make use of this service option if cheaper, faster and more reliable delivery is provided than compared to the existing options. Furthermore, a study (https://journals.openedition.org/factsreports/3682) pointed out that spaza shop owners could benefit from efficient delivery systems stocking up on goods by an external party, so they do not have to close the shop for doing it themselves.
On the transporter side, anyone willing to take something along his or her way could make a small financial gain. This ranges from commuters and travelers going via any means of public transportation to truck drivers and people with their own cars driving to potential destinations hours or days away.
Please describe how your proposed solution will address the Challenge that you have submitted it in.
General project
With this decentralized, blockchain-based approach, a sound alternative to the currently centralized and highly dysfunctional postal service system in Africa can be established allowing for cheaper, faster, more reliable and greener parcel delivery. A working decentralized solution on blockchain to the current centralized legacy postal system would be a disruptive game changer for the entire postal delivery industry.
But not only are the senders and receivers of post items served well with this solution with cheaper and faster delivery options, also for the transporting side a new income stream is created for anyone traveling, commuting or driving to somewhere boosting the regional economy as the payment goes directly to the transporter without any (western) cooperation/service provider extracting the profit.
It holds for some transporters even the opportunity to become sole-entrepreneurs and deliver postal items from one place to another on a daily basis as a profession.
The ecological impact is positive, too, as CO2 emissions can be saved through this decentralized delivery approach.
For the Cardano community, a real-world blockchain use case would drive adoption and improve the lives of many people in Africa, who can rely on a just better and fairer delivery solution for their items they want to ship to family, friends, and customers around their countries.
Lastly, the DAO approach would enable a fair community governed profit-sharing among users by avoiding the classical profit optimization strategies of large corporations, which come usually at the cost of local employees and/or customers.
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MVP Testing (to be funded)
First and foremost, it allows us to validate the functionality and usability of the developed MVP. With this testing process on the ground in Ghana and Cameroon involving everyday people who might have been skeptical about crypto in general and most probably unaware of Cardano, they will learn the basics of the Cardano blockchain and community, its mission and how to do basic interactions and why to trust it. Furthermore, they will learn how to download a wallet, interact with it in combination with our MVP. Ultimately, they will see when learning about our project that blockchain is more than just speculation or NFTs but can have a real world use case, just like our MVP is trying to provide one for them.
For us as a team also using financial resource from the cardano community through Catalyst and other funds, it will help to figure out at an early point with yet low investments if this idea/business model does serve the needs of people or not and would ultimately fail having swallowed up huge financial and human resources. The earlier you have a validation as a startup the less likely you waste resources through pivoting earlier. On the other hand, if the confirmation is there, you know you are on the right track and increase the chances through this data to raise more capital that can be invested into this project. So in either way, the MVP testing will serve us, the Cardano developer community as the MVP feedback will be shared and the entire Cardano ecosystem with more people being aware of it.
Therefore, it most certainly will help onboarding new people to Cardano and in the long run with a successful development of our parcel delivery dApp will drive adoption among Africans spreading the message of Cardano as the ecosystem for empowering people and overcoming real life struggles.
What are the main risks that could prevent you from delivering the project successfully and please explain how you will mitigate each risk?
Risks for the testing of the MVP (to be funded)
- Risk of biased feedback: the design of the interviews as well as the MVP testing must be constructed according to the empirical social research standards so that untrue (just nice e.g.) answers can be filtered out.
- Risk of coordination failure: The coordination with the responsible person for the conducting of the MVP testing of the WADA Hubs in Ghana and Cameroon will entail any normal coordination risk when dealing with several stakeholders -especially when far away and operating under different conditions. It is clear to cooperate closely and to hold meetings frequently with face-to-face video calls so that the intention of how this project shall be implemented and what goals shall be achieved is aligned among the stakeholders.
- Risk of misleading conclusions from the analysis of the findings: There is a chance that the data generated through this process is not extensive or detailed enough to draw a clear conclusion for the UIX design of the MVP, the validity of the value proposal of the business model and its implementation on the ground. However, with this knowledge we can work a redesign for another MVP testing and interviewing phase in order to improve the explanatory power of the data analysis.
- Risk of contradictory findings (Ghana vs Cameroon): Even when at first glance a result like that would look frustrating, it could generate a learning insight for us and the entire Cardano entrepreneurs that the local/regional context for accepting proposed solutions by the people is highly different (context dependent) and thus needed to be taken into account when developing blockchain applications for African consumers.
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From our research we have identified five major risks for the general project idea:
- Business model/ platform risk
- Mule risk
- Insurance risk
- Dispute resolution
- Overall crypto risk
As our business model is built on the logic of a functional platform economy, the threshold supply (of transporters) and demand (of senders) within a certain region must be reached. Otherwise it would not work. It is a chicken-and-egg-problem. If there are not enough transporters offering the carriage of an item along their way the delivery system does not work just as if there are not enough senders wanting to send items on the platform. Demand and supply has to be created almost at the same time. The solution to it is to create a sufficiently large network effect through regionally targeted marketing campaigns with the help of the WADA and the overall Cardano community.
The mule risk involves the abuse of this delivery through sending illicit items, like drugs and weapons. Besides a disclaimed 'transparent and open parcel policy' allowing for the transporter to check what he/she is carrying, we are planning to incorporate Atala Prism's ID solutions, too, trying to deter criminals from abusing our system due to enhanced traceability for the police.
The insurance risk concerns, first and foremost, the transporter who exclusively bears the economic risk in case the postal item gets stolen, lost or damaged. In this case, he/she would not just lose out the payment but also would lose the deposit made into the smart contract (to the sender as a compensation) as this is to incentivise for reliable delivery. For this we are thinking hard about a third party or community based insurance solution which copes with the challenge of moral hazard. The sender to a lower degree is exposed to the insurance risk as he/she gets refunded with the deposit made by the transporter in case of theft or damage. It is ultimately up to the sender's risk assessment of how much deposit the He/she demands from the transporter to deliver the item.
Associated with the risk of damaged and stolen goods is the dispute resolution mechanism that resolves complaints coming from either side - the receiver or the sender. Through an incentivised community effort as an extra service to be paid this risk of false complaints can be handled. Furthermore, the Atala Prism integration would allow for ratings and verifications of senders making it even in the short run hardly profitable to perform a poor delivery service.
The overall crypto risk entails regulatory as well as technical concerns. From a regulatory perspective payments in the form of cryptos, including stable coins, are under scrutiny and the risk of a crypto ban is hard to mitigate. On the technical side, the smart contracts in the most basic (and cheapest) form are autonomous and cannot be controlled by a third entity, like the DAO, in case someone loses its wallet access or unlock code. We are having a less decentralized version of smart contracts also in mind as a premium feature which carries less risk in the form of proper private key management for crypto beginners. Overall, the risk of exploiting the escrow smart contracts are perceived to be rather low due to security audibility of smart contracts written in Plutus and the very limited amount locked in them.