Navigating compliance in the future of work continues to be an issue for both the buyers and sellers of labor. Talent Tech Labs interviewed the founder of Opolis, John Paller, to uncover his journey to stand up a new token-based employment cooperative that provides independent contractors with benefits such as payroll, medical insurance, retirement plans, and other shared services. In our conversation, John shares why he decided to create the self-described “member-owned digital employment cooperative.” He sheds light on some of the challenges along the way with some fresh thinking on the future of work.
Let’s jump in and talk about your experience in the staffing world. What’s your historical view of organizing systems for workers and employers?
I started in talent acquisition and spent the last 20 years working with employment systems & HR tech. I built what is now the 5th largest staffing company in Colorado and sold it to the employees in 2017 after a major epiphany of sorts. The epiphany was that the way employment operates today is antiquated and about to shift in major ways. I wanted to be a part of this change.
In 1908, 88% of people were self-employed. And it’s really the advent of the Industrial Revolution and industries like auto that created a better arbitrage of people’s time to go work for a corporation. So the idea of corporate subjugation wasn’t really a thing until the economy started to grow by leaps and bounds. Today, making money is still the name of the game, and that’s great.
But fast forward six or seven decades to the information age, and now the technology age, these systems are antiquated because we’re moving back to independent workers. The youngest population of workers are choosing not to participate in W2 work. They care more about freedom, flexibility, and purpose than the pension, retirement, and other benefits of the employment social contract and making profits for shareholders sitting behind the curtain.In @TalentTechLabs latest #TrendsReport, Jonathan Covey sits down with John Paller of @opolis to discuss the #FutureOfWork: Click To Tweet
So the economic game design of the corporate model is starting to fracture. You really need all stakeholders in the game to opt-in, and if the workers don’t want to opt-in anymore, corporations will have to figure out a different way to scale value. This is where the future of work and Opolis are about optionality and choice. And it’s not about the mirage of choice where people feel they have all these different corporations they could work for. It’s about reaching a level of optionality for your employees to work independently and make a living without being forced to be a cog in the wheel at a corporation.
The environment you’re describing sounds pretty bleak, almost modern-day indentured servitude. What are alternative, more democratic models of employment? Are there examples like unions?
Unions are one step in the right direction. From a social anthropology standpoint, you have a few different things: guilds, cooperatives, and unions, trade associations to a certain extent. Cooperatives (like agricultural, food, oil, and gas co-ops) usually create some sort of mutualistic joint venture and have a slightly different governance mechanism than you would see in a traditional corporation. Guilds are similar but focused on the worker and are closer to unions, which take things to the next level. But the problem with unions from a governance standpoint is that they’re highly centralized with their power, and they are political. The geo-centric affiliation aspect of unions is outdated.
So I think historically, we’ve had things that have attempted to democratize outcomes from a game design standpoint, but there are flaws, whether in their governance or geographic limitations. So moving into the technological age, using decentralized ledger technology like blockchains, there’s a whole new blue ocean of opportunities for communities and organizations to reimagine themselves in ways that have never been done.
Yes, the model of a cooperative exists and has for 500+ years. The thing is, no one ever put it on the blockchain. How does this change the way companies organize themselves?
Yeah, that’s exactly what we’re doing at Opolis. No one’s ever really taken the concept of a cooperative and modernized it. There are reasons for that because employment can’t be entirely decentralized. In the USA for example, you need to get an EIN number, file Form 940 for employees and have an office entity if you’re going to be in compliance with the laws of the land.
And from a value distribution standpoint, corporations, even Silicon Valley, high-tech startups, aren’t going to compete in the traditional sense. Airbnb tried to give their hosts stock options and couldn’t do it because of different securities laws as a C corporation.
So futuristically or even today, if the Airbnb community were a DAO (decentralized autonomous organization), the hosts (workers) would contribute value. Then the money the DAO receives from renters would be distributed across the platform in terms of shared profits as a cooperative. There is no centralized board of directors, no investors that don’t use the product, no other misalignments that typically happen in the old school corporate structure. So you’re going to see an entire redrawing of how we scale value. My prediction is instead of $2 trillion being the ceiling on what a corporation could be, you’re going to see multi-ten trillion-dollar networks and these sort of hives for workers globally to create value for themselves.
This is a good segway to what you’re doing at Opolis. What is it?
Opolis is a digital employment cooperative providing payroll benefits and shared services for the independent worker or self-employed. The web3 nerd term is a self-sovereign worker – anyone not dependent on a 3rd party mechanism or corporate organizational structure. Opolis is like a professional employer organization (PEO) for independence, but it is a decentralized employer organization (DEO). We find that term to be more accessible and less scary for people, given all the misnomers about crypto and blockchain tech out there.
How is the Opolis community organized? How decentralized is its decision-making?
Opolis has a corporate governance structure just like any other organization but is more progressively decentralized. In a pure decentralized world, our members would vote on every little thing that happens, but that’s not tenable at our stage. There’s an operating side to the business that members don’t know about, so we could not possibly have an effective governance strategy.
At 1000 members, we currently have what’s called a board of stewards. In the traditional lexicon, this is the board of directors. Still, the board of stewards is a better label for what we’re doing because they’re made up of members of the cooperative who are actively receiving payroll benefits and shared services from the community, i.e., Opolis’ product. This is a structurally sustainable way to progressively decentralize decision-making to the community entirely over time.
Now, Opolis can’t become legally decentralized entirely because of the existing employment regulatory standards mentioned earlier. For example, we have to have an EIN number in order to procure healthcare and do compliance for our members. There’s just a particular framework we have to play within to make it work.Jonathan Covey of @TalentTechLabs talks with John Paller of @opolis on creating a #Decentralized approach to business and embracing #Blockchain as the way for the #FutureOfWork Click To Tweet
If healthcare insurance and other benefits become decentralized, then, in theory, you could avoid jurisdiction of any kind, and 100% decentralization becomes more feasible. Is that right?
Absolutely. I agree with you. As more things become a public good and less jurisdictionally and compliance-driven, eventually we can decentralize the whole thing, and that’s the goal: to be the global public utility infrastructure for employment that knows no jurisdiction. And the goal of the community is to be as profitable as possible on behalf of its members. So think about REI, for example. If I buy skis and camping equipment, at the end of the year, if enough people purchase skis and camping equipment, they’re going to make money and ship me back a profit in proportion to my consumption.
The same thing is true at Opolis, but we’ve defined patronage a little differently. It’s not just your consumption as a member, but also patronage as referrals using the native job board and staking your community tokens called $WORK. The $WORK token is a unit of account representing the proportion of profits you’re entitled to (should there come a time when there are profits).
So yeah, of course, if we could do it, we’d love to be as fully decentralized as possible, but it comes on a spectrum. Where we start and where we finish are two different things, but we’ll probably always be on the more conservative side of decentralization because of the nature of the beast.
You mentioned the $WORK token. Is this available for anyone to buy on the exchanges, or must you be an Opolis member?
$WORK is a membership token that gives the rights to governance. There are two kinds of membership:
- Employee Membership: the person receiving paychecks, healthcare, benefits, and everything else.
- Coalition Membership: typically, these are other cooperatives, DAOs, and channel partners strategically aligned to Opolis, but individuals can also join the coalition. They qualify to reap the benefits of membership without being employed. So they can get rights to profits by referring their users and receiving tokens as a byproduct of the payroll mining process as the community grows.
So, in theory, you could buy and sell $WORK on the open market, but you need to become an Opolis member to exercise your rights on these tokens.
How do you think talent executives should adapt and prepare for the impact of blockchain in the near and long term?
All leaders need to understand the economic game they currently play in and the hierarchical structure they reside in. For HR leaders and corporate executives, I would say they need to understand where things are going regarding priorities for workers. They don’t care about free kombucha and ping pong tables. What they want is a more symbiotic mutualistic experience commercially.
Okay, how do you create sustainable economic and social games that allow people to maximize their creativity and contribution? Some of this is about economic distribution. Let’s look back to the Airbnb example or Uber. Uber’s a two-sided marketplace for riders and drivers (who built the market). The tech is just Apple Maps, geolocation, and some other features – it’s not the most innovative thing ever – they just used it to create efficiency and build a marketplace. And how much of the money did they share with drivers and riders from the IPOs? Zero. So in thinking about this, corporate executives need to think about more sustainable economic activities and games that incentivize people for the long term and not just give them a carrot, but a carrot farm.
25 years from now, most large centralized corporations will either have reinvented themselves entirely, or they’ll be gone. Blockbuster Video had the opportunity to get involved with Netflix and even buy it. They didn’t think they needed to because the innovator’s dilemma can be quite a thing to get over when confirmation bias convinces you your way is the right way.
How about advice and parting words for workers?
Independent work isn’t for everyone. Some people prefer the perceived safety and security of having a job. But I would start and ask yourself, am I doing something that motivates me commercially? And if the answer is yes, good, keep doing that. If the answer is no, I would start to explore what you would love to do and move you to maximum creativity, output, and contribution.
Once that’s identified, I would start exploring things in the blockchain web3 space. There are thousands of projects looking for capable people to build this future of work and the internet from decentralized finance (DeFi), art and ownership, etc. Even if you’re a non-technical, non-creative, there’s a need for people to build communities and do new-age marketing to create all sorts of things.
I know former bartenders who are now running large communities and I know people who were former estheticians who are now learning how to code Solidity (programming language of Ethereum).
It’s really cool to see the optionality of this space, how you get what you put in without the extraction of intermediaries or even permission, and how much empowerment that’s bringing people.
Looking At Blockchain As A Whole
Once you get past the media narratives, you realize blockchain isn’t just a technology, but a means to democratize the future of work for a far greater number of participants. This Trends Report demonstrates the future of work is social. Crypto networks led to the advent of DAOs which provide the basis for individuals to coordinate, create, and leverage shared financial resources. Here are some key takeaways for corporate executives and technology builders:
- Look for opportunities to progressively decentralize. You don’t need to evolve into a
crypto network, but it will position you well to partner and interact with the web 3.0
protocols and services of the future.
- Workers will continue to have more optionality in work as the world becomes
more distributed. Organizations need to design more sustainable economic systems to attract talent and properly incentivize workers for the long term.
- The core values of the next generation’s view of work include fluidity, freedom,
and flexibility. Companies still need the right people in the right roles, but allowing workers to do the things that ensure their prerogatives will facilitate conducive and mutually beneficial work environments. We’re already seeing workers leave companies because of mandates to return to the office post-COVID.
- Think hard about the computing infrastructure on which you build your startup. Web 3.0 economies grow bottom-up like cities and it seems they will replace web 2.0 incumbents who were built and rely on top-down control.
- Build a community of active participants (open-source documentation, evangelism,
bounties, grants, etc.). We’re moving towards a world where the tech is no longer the IP; the communities are the IP.
- Be open to the many new funding models gaining traction outside of traditional equity fundraising.
- Give ownership to your communities. You don’t need to launch a token and completely decentralized governance, but reward your community and allow them to participate in decision making. Understand what mechanisms incentivize the behaviors you’re trying to create.
About John paller
As an employment & talent acquisition industry leader & entrepreneur, John has been in the employment/talent acquisition/HR Tech space for over 15 years. To him, there isn’t anything more commercially important to people than the jobs we take or the people we hire. He is obsessed with bringing this systemic change to the employment industry. Self-determined, portable, and borderless work alongside a frictionless connection to opportunity. He is building Opolis to create this new system for democratizing employment. John was awarded “Forty under 40” in 2014 by the Denver Business Journal, which recognizes up-and-coming leaders shaping the future of the business community.
About Jonathan covey
Jonathan is a Senior Analyst focused on emerging trends in work tech and advisor to enterprises on their talent tech strategy and operating models. Jonathan has authored research on Robotic Process Automation, Recruitment Bots, Labor Market Intelligence, remote work, and hiring manager-centric recruitment models. He has co-published whitepapers including a joint study on the gig economy with the ADP Research Institute.