The crypto future of work w/ dror poleg
The past 2+ years have sped up the adoption of the futures of work & web. Will these line up so work, web, & finance operate identically?
Here's the recap...In this episode, I spoke with Dror Poleg. A futurist about work, offices, crypto, and more. We broke down a couple of points from a recent post of his about a Crypto Future of Work. First off, how companies and the idea of a team may get replaced by DAOs. Meaning team members get compensated based on contribution. Second, how the concept of a unified team with solving a joint mission may change. Perhaps with a core team where contributors swap in & out regularly to solve specific tasks or challenges. We're already starting to see the first changes in this direction. This was an amazing talk trying to forecast what work will look like in the upcoming years.
Crypto Future of Work blog post
Future startups become DAOs. For anyone following Web3, this sounds pretty spot on. Groups of individuals come together for a shared mission. They contribute some amount to that organization and are compensated specifically for what they've contributed. We dove into two aspects of DAOs and how companies will work in the future to discuss how relevant this may be.
Compensation based on contribution
For the past 70 years, we have gone to work Monday thru Friday 9-5. This is what we were paid for. Not the output of work nor the effort put in 9-5. In reality, this is much more like crypto. Today crypto has 0 intrinsic value. You can't go into a store and buy a bottle of coke with it. Its value is based on perception. Exactly what office work has been all these years. Seeing you in the office early or late, or typing away on a keyboard gave leaders the perception you were a super start getting tons of work done. However, research is clear that half (at best) of the time 'working' is actual work.
Blockchain has followed the model of open-source based on user contributions. A project may have 200 contributors but only a few are contributing most of the work. This change is the first major step in fully embracing remote work. Moving from perceived work to productivity based on contribution. In the future, it's possible our compensation may be tied to how much work we put into the job or company. The more lines of code, support tickets answered, RTs on a social media campaign the more money we get paid. This of course raises the question of how this will actually play out. Everyone can't contribute the same. So will we move to the next step (the exact same step discussed in a previous episode) about productivity being based on impact vs contribution? What's more valuable? 1 sale for $1,000,000 or 20 sales totaling $400,000? Releasing 1 small feature request/enhancement every 2 weeks that increase user happiness and retention or releasing 1 huge feature every quarter that may or may not have the same impact?
Time will tell...
There will be an 'I' in team
There is no 'I' in team but the future organization may just be made up of I's. Moving towards a contribution model could go a few ways. One way is the freelance open-source model. Where this no team or organization. An individual comes in to contribute a specific thing for a specific time frame and then moves on to another project. Perhaps even having many projects or 'jobs' at the same time. Without the M-F 9-5 schedule, this could make perfect sense. If I have 2 days to do a job that takes 6 hours of work, why can't I have 2 or 3 of those jobs? This sounds like a DAO. The biggest issue I see is the shared mission. If a company wants to cure cancer or do something game-changing everyone wants to be involved. But how many people want to build accounting software or software that lets a supermarket automatically buy the inventory to prevent empty shelves. This is far less exciting, so how would a company like this attract those people to join?
Another direction that I'm seeing regularly is a company having a core team that handles the day-to-day work. The company will then bring in external people to help with a specific task or prototype a specific feature. I'm a member of a company/team offering this service. Not so many people have built & scaled a remote-first organization of 1000 people all across the globe as I have. Many companies are hiring a Head of Remote or similar to help them fully embrace remote work. Yet, few companies are actually hiring the right person for the right reason or at the right seniority level. So the future may be to hire this person as a 'consultant' to build the infrastructure (policies, tools, procedures, etc) on how to do remote the right way. And up-skill the core People Ops team on how to manage it day-to-day.
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Scott - [02:12 - 02:08]
Hey Dror, how are you doing?
Dror - [02:06 - 02:12]
Good, Scott, good to be here with you.
Scott - [02:12 - 02:47]
It's an absolute pleasure. I came across you about a year ago, doing an episode with David Cairns. He works in commercial real estate and we were talking about the future of offices around the future of work and hybrid and things like that. And he said I have to check you out. You’re someone who's writing some interesting things on the future of office space and where we're going to work. That's obviously not the topic today, but I appreciate you joining. Tell everybody a little bit more about yourself and some of the great things that you're working on.
Dror - [02:47 - 04:30]
Sure. It's the first shout-out to Dave Cairns and it’s nice of him to mention me. And, you know, he's been writing a lot about the future of work and real estate, et cetera, over the past year. And so nice to see. Who am I? That's a complicated question. So I spent, two decades as a private equity real estate executive, and a tech executive. The private equity real estate side was mostly in China. So working for 10 years there with an investment/development company. Buying land in China, deploying institutional capital from Europe, from Israel into Chinese real estate. And really being among literally a handful of foreigners who are really developers in China who buy land, develop it themselves, lead marketing, finance, it. Most foreigners that were involved in real estate in China, usually just buy a local company or invest in a local developer or partner. So did that for 10 years. Built more than 20,000 apartments. Shopping malls, a few office buildings over there, and kind of the whole life cycle. So from buying the land to stabilizing a commercial asset, and then selling a piece of it or all of it to a large institutional investor, like a pension fund or private equity fund, or real estate investment trusts, I arrived into that world from the world of online media. So I started my career kind of both online and offline, but like dealing with parties and music and kind of outdoor events. I started building websites for them, promoting them online, and then started building websites and designing and programming things for other people. This is like high school time. It's like 25, 26 years ago. And, I got to China as a partner in a creative digital agency.
Dror - [04:30 - 06:10]
And somehow a lot of my clients were real estate related. So I know developers or hotels or retailers. And I kind of got sucked into that world, spent 10 years doing almost only real estate. And then try to escape back out. Founded a startup that built a location-based social network. So a bit of like a Twitter that only shows you people within walking distance and tweets within walking distance. That was 2014. 2015 launched the app, obviously, you haven't heard of it, so it didn't do terribly well, but it did well enough that Apple featured it is like the best new app of Q4 2015 or something back then. So we had a lot of downloads, like a few tens of thousands, and that kind of brought me to the US. So I left the real estate kind of China stuff. The startup didn't go too well, but it did attract to me all sorts of people who were interested in that idea of a location-based social network of kind of like online, offline interaction. And a lot of those people were once again, real estate people that I was trying to escape from, because they said, oh, this app is cool. Can I bring it to my coworking space or my university campus or basketball stadium or whatever it is? Where there are people and you want to create some kind of interaction between them and allow them to socialize in a way that is not possible if you're just fully offline. And as I explored that idea, I realized that there's a lot else happening at the intersection of the physical world and the digital world.
Dror - [06:10 - 07:38]
And that I kind of know a lot about it already, particularly because of my experience in China and building shopping malls there, and dealing with a very unique online shopping and mobile shopping environment from day one. I started a lot of that stuff is pretty new outside of China. And of course, it's evolving differently as well. And I just started researching. That's kind of like, okay, what does this digitization of the physical world mean for real estate? but more broadly than real estate, what does it mean for institutional investors? So for people that have a lot of money in physical assets, and they'd make all sorts of assumptions about the nature of those assets, the type of cash flow that they generate, the type of safety that they provide. And how is technology going to allow us to stabilize all of that and change a lot of these assumptions? And it got to a point where I wrote a whole book about it called Rethinking Real Estate. For a few years now, before COVID, I was talking about the fact that the way people work is going to change. Their living decisions are going to change. Obviously, the way they shop is changing already. And everyone's aware of it, but maybe they're not fully aware of how intense it's going to be. And then COVID hit and, you know, these ideas just became more important. Yeah. So in general, these days, I'm kind of an independent researcher and writer focused on the future of work, the future of money, and the future of cities. I teach in various universities as a guest. I advise some of the largest financial and other companies in the world. Mostly just coming in and talking to them and scaring them, and then going back home to my basement.I teach a couple of courses online, one focused on the future of real estate and one focused on crypto. So yeah, that's the short introduction.
Scott - [07:59 - 09:09]
Amazing. We’ll definitely include those two items in the show notes. When can you come back here to Israel to teach you those things? I've been here for six years. I've been working remotely for 10 years. I helped build one of the biggest remote companies. I've been pounding the remote door here in Israel for six years. It's desperately needed here because there's just a finite number of people in this country. There are not enough people to take all the jobs. It's like, you need this, you desperately need this. But there's such this hesitation on letting people have that freedom and flexibility to work from home. The government here is trying for the fifth, sixth time would get people to move to the South or up to the north of Israel. And I've been pushing this to Twitter. To previous Prime Minister Netanyahu. Now, Bennett, I said, do you want to make this happen? Why have all the other ones failed? Because at the end of the day, everybody had to go from up north or down south to Tel Aviv. Because that's where the jobs were. Until you support remote work as a standard, it's going to fail because nobody wants to commute an hour and a half, two hours just to be getting to work in Tel Aviv. So please bring that home. I'm trying my best here.
Dror - [09:09 - 10:38]
Yeah. There are a few specific issues with Israel. I mean, one, I'm really not an expert on the Israeli labor market. I've never actually really worked in Israel as a grown-up. You know, I went to the army and then I went traveling and I'm still traveling as far as I'm concerned. I figured out what I wanted to do when I grow u, but there are a few different issues with Israel. I think one is that the, you know, most of the kind of tech-forward Israeli companies are focused on the world, to begin with. And they usually employ people in all sorts of places or relocate people already. So the Israel office is in many ways, a satellite or one among several offices. And so they're already distributed, but then the satellite itself, they like it to be kind of quite dense and intense. Yeah. Second, I think when you look at really remote-first companies, they're very process-oriented. Like, you know, to work asynchronously, you need a lot of paperwork. You need a lot of processes, you need a lot of procedures. It's all very, very structured and modular. I think if you look at the Israeli management style, it's usually exactly the opposite of it. It's much more entrepreneurial, much more intuitive, much more, okay, "Hey, you make here, you know, you do this, you do that." It's kind of like, which we know causes a lot of problems in Israel as well, but it's also the kind of the source of the innovation, you know. That kind of like, "it's going to be fine. Let's just wing it. You know, let's come up with some crazy ideas."
Dror - [10:38 - 12:15]
So it works really, really well in some situations. But if you try to structure it, then put it around an organization of 500 or 2000 people, I think it's much harder. Three, I think Israel itself might be too small for people to really kind of feel enough pain to drive them towards full remote work. So what I mean is, you know, a company or an employee in Miami that gets a job offer in New York or in San Francisco really has to decide, do I move there or do I stay here and give up the job? And then the company has to decide if we want that person, do we have to allow him to be fully remote or not in Israel? You know, like you said, someone's in the north or an hour and a half, two hours. We'll just choose to suffer a little bit extra and kind of do it. I feel like there's not enough of that critical mass of like clear, like, okay, are you far away or are you nearby? Israel it only has one city essentially. But it's not like if you had five cities, you could kind of say, okay, if I'm in Tel Aviv and now I want to access talent in these two or three other huge pools, like San Fran. San Francisco companies are now saying, "there is Seattle, there's New York, there's Miami, There's Boston." Then we expand our pool to two candidates from there. That's like a huge jump immediately. If you're in Tel Aviv and you say, okay, I'm going to hire people from anywhere in Israel, the incremental kind of change.
Dror - [12:15 - 13:24]
It's like, okay, I'm going to get maybe 5% more talent or 15%. It's not like 5X. So it's kind of less dramatic. If you're looking at changing your whole organization and the way you work for this kind of benefit, it's usually doesn't seem as exciting. But that said, I'm sure that, you know, we will see more flexibility, if not like fully remote. Allowing people to like, you know, spend more time with their kids, go pick up stuff. Cause we know that Israel life is complicated already. and we'll also actually see more concentration the polarization of the market, where the areas that are walkable. They do have a lot of talent. A certain type of lifestyle is just going to become extremely more expensive. Even though they were already very expensive today. A lot of people will choose to either participate in that or like to move out completely. Like you cannot be just living in Tel Aviv or even Hertzliya, and Netanya are regional now. Like they're just becoming very expensive as well. You just have to decide, okay, do I want to pay to participate in this? This means I'm going to have a high-paying job and work really hard, or do I want to choose a completely different, kind of balance of trade-offs.
Scott - [13:24 - 14:30]
It makes sense. But certainly not the topic for today. The topic came from one of your past posts on a crypto future of work. And a lot of things I was like, yes, yes, yes, totally. There were two points in there that I wanted to focus the episode on today that made me think and debate. Not that I don't believe in it versus maybe it's a longer future versus shorter-term future. And just wanted to dive into those two kinds of points and pull those out. the first one was basing compensation on contribution. So kind of taking the idea from open-source and blockchain. Where probably most contributions to an open-source project or a blockchain are done by a few people versus a wider audience. To start off, maybe share a little bit more about that specific point over. How do you exactly see the future of work working, where it's based in the compensation?
Dror - [14:30 - 16:12]
All right. So to explain this we need a little bit of background. So I'll just use an example that everyone's familiar with. Let's take the music industry. Every time a song is played on the radio someone makes a tally of that song was played at the end of the year. They kind of do the accounting. And they said, okay, Taylor Swift, whatever song was played a thousand times. Now Taylor has to get $1 per play. The producer has to get something else. The owner of the master recordings has to get this. The bass player gets that the composer gets something. Someone who wrote another little sample that they use gets another thing. And then all sorts of people who contributed to that sample get all sorts of other stuff. They mix it all together. There are accountants, there are lawyers, there's a whole system and global organizations that organize it. And then they pay out the royalties to Taylor Swift for and to all related parties for their contribution. Now that's a creative work where every person who contributed to it gets compensated somehow based on a pre-agreed system. Now, this system is super expensive to maintain, and even as expensive as it is it doesn't work perfectly. And people are fighting about it and still arguing. And they're not sure what happens. Where one of the interesting things about crypto is that it allows us to significantly lower the transaction cost of using similar arrangements for stuff that is much less important or much smaller than the music industry. So you can kind of say, okay, let's say, let's look at an open-source project on GitHub, for example. So you open up a piece of code, you see, okay, there are 5,000 people that contributed to this project.
Dror - [16:12 - 17:53]
Let's say the Android operating system. The open-source version about 5,000 people contributed to it. Let's say I wanted to give each of those people a piece of the revenue that Android generates, every time it generates revenue. And of course, to keep track of that would be super complicated today. I'm not going to hire lawyers just to give some guy in Haifa $5 because he contributed one line of code. Because it would be too expensive for me to even pay him and do that. Then the actual payment that it incurs. But assuming that I can automate this completely with smart contracts and with online payments and say, okay, I'm just defining the based on the percentage. I'm simply defining this based on, you know, how much percentage of the codebase you contributed. You're just going to get something automatically. Every time someone buys this piece of software or every time someone downloads it and the process of doing it, the enforcement mechanism is now almost free. It almost doesn't cost me anything. There's almost no conflict because it's super, super simple and it's all digital. So I don't have to go and verify anything and listen to the radio. It just all happens on the internet. It all runs on the same, so to speak database. And that suddenly opens up a world where you can really start compensating people based on their very specific contribution. Now, why aren't we doing that now? Because again, it's too expensive. So in most companies, you can have a hundred engineers sitting in parallel and working. They all have the same education and get the same salary more or less. But of course, if you asked her boss, he will tell you, okay, this guy is actually probably doing 10 times more than the other guy, or as much more important to me.
Dror - [17:53 - 18:55]
But for a company in terms of management cost and transaction costs, it's just not worthwhile. It's too expensive to start now. Okay. Let's track what everybody's doing and like pay them every month or every day or every minute based on one specific thing. But if you can streamline that, suddenly it opens up those possibilities further. it's not only not all in the same office anyway, and you're remote. Or you're not even in the same jurisdiction. It makes it even simpler because, you know, you don't have that kind of cultural issue of like, okay, Hey, all of these people are sitting here. How can I give one person, one thing and another person, another thing, and give this person longer breaks and force this person. Now you don't have all those kinds of like physical or kind of visual cues that kind of trigger people or make them feel like, you know, something unjust or unfair is happening. and you can just say, okay, you're wherever you are. This was your contribution today, or this month, this is how much you're getting paid. And you're somewhere else. This is what you did. And this is how much you're getting paid.
Scott - [18:55 - 20:32]
It's interesting. Just maybe the macro view of crypto seems to be kind of like counter-intuitive to the idea of contribution. In theory, crypto isn't a legal tender, right? Nowhere in the world can you walk into a store and buy a Coca Cola, or buy something with it. It's all perceived value. And for the past 70 years of work, office-based work productivity was based on perceived work. You had the person who was the early bird. Came in early, left late. The person who was always seen at their desk on the phone. Was always perceived to be the one who was most productive and providing the most value. So it's interesting that contrast between the two. Maybe the first question I have, it's companies now that many of them are begrudgingly accepting that productivity is really based on contribution, as you're saying. It's not how I see you in your office. It's really based on deliverables. And this is something across multiple podcasts, something I've been speaking about for years. That productivity is a simple math equation. You have a very well-defined deliverable and well-defined timeline. This plus this equals productivity. If you're able to deliver the code, the marketing campaign, the support tickets by this amount of time, you are productive. So the companies now that are kind of moving that direction, accepting this is probably the better way than perceived value. What kind of advice can you give for these leaders on how they can measure this today? And how it can really help solve the biggest issue that many leaders have? That outstanding issue of lack of trust. It's still kind of why they're pushing people back into the office.
Dror - [20:41 - 22:12]
So one, I think it's really, really hard to measure. So like you said, historically, the office was a foundation of a culture of 50% of success is showing up. Where, you know, or 90% of success is showing up, just by being there. Your boss assumed that you're actually doing something useful or just being in someone's face made you kind of memorable. And you know, when some meeting came up every quarter or once a year, it's like, "oh yeah, I know that guy. Or I know that girl. Yeah. He's always here. He seems busy. He's making noise." So he's like, "okay, he smiled to me in the elevator or like helped me get something from my car." So working remotely pushes you to look for other ways to evaluate people. But I think even in the office already, I remember, you know, two or three years ago sitting with heads of real estate of companies like Google or LinkedIn talking about office design and how it affects productivity. And when you ask them, okay, how do you measure productivity? Ultimately, it's like very simple stuff. You know, surveys asking people do you feel more productive here? Are you happier? Yeah. So it's not like it wasn't really a science to begin with. I think it comes down to stuff that is really intangible. You know, I wish I had like a better answer, but usually a good manager is one who knows how to spot those people. Of course, there's stuff that you can measure. You can compare different teams and you can compare different people. But with innovation, not everything can be measured. Some stuff takes longer to kind of materialize before you realize that it was a unique contribution.
Dror - [22:12 - 23:39]
One of the questions you sent me before our conversation, I think related to this question. You said the Bulls didn't win a championship without Michael Jordan, right. But if you're, if you know something about basketball and you look at Michael Jordan, you know, that he's special and you understand the value of Mike Jordan. Of course, it can be measured parts of it, but even the parts that cannot be measured. I mean, statistically, you can compare Jordan to Kobe. How there might be similar basketball players or kind of say they're all in the same ballpark, but when you watch him play, you know, to do something different there, that impacts the team. That means that, you know, yes, he had a team and the team was important, but actually he was a critical factor here. And I think a good manager knows that very, very quickly. I know that from my experience as a manager and also as an employee where sometimes I felt, "Hey, I'm worth 10 times more than what they're paying me, because I'm doing some stuff here that is supercritical." And even if it's like once or twice a year, these are the things that change the game, you know, and you see that already in the compensation structures of the large tech companies. Google, Facebook, and others have regular payment tiers that pay people almost like a million dollars a year while they're also employing people that get 50 or $60,000 a year. Sure. And even among engineers, there's like five to eight X differences within those same companies. So people with the same level of training and not always the same level of experience, so they recognize that.
Dror - [23:39 - 25:03]
And if you speak to them, they will tell you that it's possible. And yeah. So another aspect of this that I think is important and that's where remote also comes in and is interesting is that companies don't always know. That even the employees themselves don't always know in innovation today, there's a huge element of luck and randomness and sounds and part of the game. And that's why these companies based on much entire, so much is to hire a hundred people who look the same on paper. And just to assume that you know, 80% of them are just a total waste of money. 20% of them will maybe do something useful. And one of them might invent the next Instagram or the next Gmail. It's worth having him on my payroll for the next few years because the outcome from that person is going to make everything else worthwhile. So it's a bit like a venture approach, but like brought to HR. And I think those companies understand it. Some of them understand it explicitly. And we'll tell you that some of them don't really understand it in the terms that I described, but they still do it. Which means that it's working for them. So maybe they don't want to think about it like that, but that's how it is. So again, the basketball team. You can only have five players and a roster of 15. But in tech you can have a roster of a thousand, but you still need only one Michael Jordan to win the championship. So, you know, you hire a thousand, if you can, and you wait and see what happens.
Scott - [25:03 - 26:04]
Fair enough. Fair enough. We'll probably get back to Jordan or maybe we'll go with a Leo Messi, analogy then. The idea of contribution, again, for me makes total sense. I've been in the mentoring and coaching of founders over the years. And through my own work, I've had this issue that are certain roles, especially operational roles, That are very difficult to have clearly defined deliverables. So it's not code releases or pushes to Github. It's not how many blog posts. It's not how many support tickets, it's not sales or revenue. Things like that for companies like they were maybe roles in the future of everything is based on contribution. How can companies be able to compensate based o, contribution when again, certain roles it's extremely difficult. I want to say it's impossible, but close to impossible to say, yes, this was the defined contribution that your project or whatever you're doing has brought to them.
Dror - [26:04 - 27:30]
Yeah. So one trend that we're seeing which I really don't like, but it's a clear trend is that work is becoming more and more modular even for like very high paid knowledge work. And it's most apparent actually here in the US in the field of medicine. You know, when you go to a hospital now, every separate question that you ask the doctor almost it's like typed into a computer and is priced differently. And, you know, gets advice or input from another person somewhere or sent to a lab somewhere. And when do you see it itemized, it's really like, you spent 10 minutes with a doctor. You have like 15 different items on the bill and they're increasingly trying to optimize. You're sitting with a technician to look at like an ultrasound of a baby. And then there's another person sitting somewhere else completely because it's cheaper for them to do that and then join you for five minutes. And then they send some sample somewhere else for two minutes. And then some other special experts will look at that somewhere else. And in America, because the system is so messed up, you get a separate bill from each of those. You can actually track the journey of the interaction. And you say, wow, like all of this happened in the last 15 minutes and someone got paid for it. So I think you're seeing like a move towards a level of modularization, which is kind of moving up the value chain. So, of course, there are people like, okay, I'm just going to pay a million dollars, just speak to some specialists and spend an hour with them. But then the lower you get from that, it becomes more and more modular.
Dror - [27:30 - 29:05]
And it increasingly increasingly looks like the Uber driver or the person who just gets instructions from an app to tell him, okay, go there, come here, bring them back. This is how long it took you. This is how many stars they gave you. This is how much this action is worth at this point in time, based on overall demand compared to overall supply in this location. Thank you very much. Here's your money! See you later. So we're seeing that type of system, happening. And then I think the bigger picture on the same question, it ties into the fact that I think a lot of those discussions about productivity and the future of work, we think about innovation is kind of the main goal. But actually most people on earth, even in tech, even inside the most advanced companies, they're not reinventing the wheel every day. Most of them are just doing routines, customer success, sales, accounting, legal, even a lot of the programming, you know, even in a super amazing team of the five best programmers in the company. Usually four of them during that specific action or just kind of following along and kind of just doing stuff that was assigned to them most of the time. So yeah, most people are not reinventing the wheel all the time. So on the one hand, it's increasingly easy to kind of define their specific tasks. And on the other hand, it comes back to that idea of like a gambling kind of like the kind of return fire, low return curve, where you're like saying, okay, maybe I cannot measure everything, but since it doesn't cost me, or it doesn't cost me too much to just bring a few more people or to try different things, I'm just going to like keep trying.
Dror - [29:05 - 30:01]
Some people clearly prove themselves great. Some people don't. To the point of just having people that maybe, you know, can ride the system for years and just get paid and it's fine. We have the Silicon Valley series. They just put them somewhere in some corner and pay them for a few years. And nobody even remembers that they're there and it looks like waste from the company's perspective. But maybe that's the most efficient way to allocate those resources. Again, it's a bit like looking at a venture portfolio of the most successful venture capital affirming the world and say, and the media often does it, oh, look at that company. They're losing money. And, you know, they're idiots like who could have invested in that, but the investor looks at it, doesn't care says, "Hey, I invested in a hundred things. My total return, like I have an IRR of like 30% or something good for me. You know, I don't care. Like I'm not offended by having some failures. That's, that's part of the game." Same approach to HR.
Scott - [30:01 - 31:37]
It's interesting because I think that leads me to the next question. I had this conversation with a founder who's been remote, for quite a while, and this episode's coming out next week. On the idea of contribution, we'll call it version two, or maybe version three of remote work. That's like the next iteration to shift from physical time or time-based, into contribution. But beyond that, I think maybe potentially the best option. that you've hinted at it's compensation, not based on contribution, but actual impact. and can not possibly work really for all roles and what can impact really come into play. Cause you have an example of a sales team, right? You have one salesperson that makes one sale for a million dollars and the other side you have another sales person, they made 10 or 20 sales for maybe $200 K. So the one sale is obviously far more impactful than the 10 or 20 sales. So contribution versus impact, but potentially on the other side, an engineering or a product team. One engineer or product manager could be launching small features or UI updates or UX workflow updates once a month. Very small kinds of features that have a huge impact. Versus another engineer or product manager once every quarter is trying to build like the next big feature, which maybe happens to flop. So how do you see impact coming into play with this? Maybe it's a farther future or intertwined with how can companies really be able to define in a good way of what the real impact is? I'd love to hear your thoughts.
Dror - [31:40 - 33:17]
So what you're talking about here is some level of the increasing level of specialization that we're seeing basically in the economy and the returns to specialization. So you can have a person in your company that can look at a problem and solve it in a minute. Then it's a problem that 50 other people can spend two years on and, you know, maybe not get to the same place because he has this. It's not just training in a specific show, but usually it's a combination of sources. He looks at it and either had experience with it or saw a parallel somewhere and has the relevant kind of basic technical knowledge that all the other engineers have. And he's able to solve that problem for you now, historically companies first just kept people like that pay just like everybody else. Then they just started paying them more. But the thing is, and that's what makes it so elusive is that it could be either one of your a hundred engineers in different situations. So in every specific situation, one of them might have an amazing answer that the others don't have because of their unique background and experiences. so then they started being all of them or like a larger group of them more, but the other we're starting to see now, and that change is driven from the supply side. So from the employees themselves sure is that some of the most specialized employees basically leave and say, Hey, you know, instead of me being paid a million dollars at Google, I can sit at home, advise maybe four or five companies, 50,000 a day, just when I count me in and solve a very specific problem, maybe I'll do that 10 times a year and make half a million dollars or make less, but to have a completely different lifestyle and maybe try to build it into a bigger business and making $10 million a year just as a consultant.
Dror - [33:17 - 34:59]
so I think we're starting to see more and more of that. And here again, remote work and having access to a bigger pool of talent means it's. Now you can find that super, super specialized person. Who's an expert in a specific problem that you have wherever they are in the world and companies are having to pay those people tons of money, just to answer a very specific question because it's worthwhile. Like I stayed in my field, you know, so again, I work with a lot of investors and real estate company. So they would invite me and pay me a lot of money just to sit with them for 30 minutes because I would give them a shortcut that no one else in their organization can give them, no one else in their organization, even supposed to give them. And you know, they know that I, I look by definition, I'm a synthesizer. I spend time in all sorts of different places and see all sorts of problems. So I probably saw their problem before and can give them a few kind of options of like, okay, this is what happens if you do this, these guys try that didn't work. This might work. This is the cost of doing this. Yep. And even something so, so vague as a person coming and talking for 30 minutes will be worthwhile for them. and, and in technical fields, it's even more clear, you know, because again, someone comes in, like you said, a line of code, it's not just about who writes more lines of code. Like sometimes it's usually who can do it with fewer lines and who can just come up with some elegant solution that, that helps scale something. so, so I stayed mostly happening from the talent side of just people stepping out of organizations or organizations, kind of allowing those people to have some kind of informal relationship or like not fully, exclusive relationship with them, because it's both cheaper to maintain them that way. Dror -
[34:59 - 35:32]
Sometimes that's the only way to retain any type of engagement with these types of people, because otherwise they would leave completely if you try to make them employees. And most importantly, by allowing them to like fly around, you actually enjoy that you benefit from that cross pollination as an organization, you're saying, okay, this person is not just locked here in an office talking to the same 50 people every day, but you're doing all sorts of things. He's seeing stuff in other markets think the same problem in different scenarios with companies trying to serve as different types of customers. And he's actually valuable to me, because of that.
Scott - [35:32 - 37:07]
So Yeah, interesting that you you've perfectly lined me up. So I appreciate that. the pivot of the second point that we had in the article about no colleagues, this past week on Monday, I published the latest episode with someone who was discussing asynchronous hiring, which seems to be kind of some very small right now, but a growing potential trend, to hire people that you'd never speak with. I think async has some fantastic opportunities really, to unlock quality of life and productivity and things like that. but me, again, maybe being an extrovert or me being doing this remote work for 10 years, I love the idea of async, but I think there's a very slippery slope that it can go to. And kind of the pull out that point of, no Michael Jordan or, or Leo Messi. never in history again, has a team. When Jordan went to the wizards or Messi plays with Argentina has the team one within one individual person. So yes, they may have a much bigger impact. They much would be far more valuable than other people on the team, but the team is itself. The organization never won, won a trophy in the future. If it's all based kind of on this idea of you have a specialty that you can do, and you kind of drop in for a 30 minute conversation here, a 30 minute conversation there, if there's an entire organization that's really built around this of just contributors, who you move away from the mentality of a team, how can a company you've made of a hundred percent of contributors actually be successful in the future of work?
Dror - [37:07 - 38:34]
I gave an extreme example in the article, but I think the comparison is, you know, how things used to be like, so I'm not like saying, okay, and you know, no one's going to have any colleagues. We're going to work with people. All, all of the people you work with are you'll never know who they are or whatever. Yeah. But I think there's room between those two options. There's a broad spectrum. And I think we're moving in one direction. so I mean, if you look at some open source projects, they already worked like that. So again, even something like Wikipedia, which everyone is familiar with to be a top 5% contributor and Wikipedia, you probably have to edit five articles or something. And, you know, the busiest editors are doing two, two and a half million articles or something like that. So there is a core team. there might be like a management team as well, that is paid full-time to kind of coordinate things. But then there's a lot of contributors that step in and out of the project to contribute their expertise or their just even not expertise. They're just spend some time doing some menial tasks and then they go and do it the same thing somewhere else. And they don't care about the project at all. I don't see a conflict between these two points of view. The difference is that instead of employing 5,000 people, now, maybe you're employing a core of 15 people and you still leverage 5,000 other people that are not part of your organization, efficiently and crypto example from this space is like, let's say a company like you only swap, which is a crypto exchange, which is a bit like a stock trading kind of brokerage that you would have in another world.
Dror - [38:34 - 39:59]
So one technologically they're designed to have much fewer assets than a traditional brokerage, but they're also, they're an open source ish project. So the code base is fully available and some people actually already copied it and try to build companies that compete with unit swap and some actually succeeded. And they're competing with them now. but the core team, I don't know how many they have today, but let's say last year they had about 13 or 15 people and they can handle billions of transactions every day, because there was all sorts of other people who contribute to their project. They can get compensated with, with tokens by contributing or just, they get compensated just by feeling like, okay, I'm contributing something useful, I'm learning. And then I'm going to go and build something else. I'm just part of a team and actually do them. There is definitely a human element there as well. You know, they're excited about the idea and the ethos that they've said about meeting the people who founded the company and worked for the core team. And some of them might be hired to join the core team at some point, some of them might not, and some of them might not want to at all. They're like, Hey, I'm just contributing something here. I'm enjoying it. Then I have other benefits that I draw from it. so to me, what's interesting is what's now possible. So again, a lot of these options 10 years ago, 20 years ago were just not possible at all. You know, if you want to do direct with someone and work with them, they had to be with you in the same company, legally and physically in the same office, because otherwise there was just, it was just too complicated to, to coordinate the communication of the work.
Dror - [39:59 - 40:42]
And it was too costly to coordinate all those payments and legal arrangements of like, okay, now we hire you for two hours and then we pay you for this. And we say, but now these things are so easy to do. so they blur basically those boundaries. And I think we'll see some extreme examples of that. And we'll see some companies that don't change at all, but mostly we'll just see between the, you know, there's just much more room, the way everyone works is going to change somewhat then. And we're seeing that with remote work as well. So, you know, even the companies that are not going remote at all are much more remote and flexible today than they were three years ago. and most companies are much, much more and, and, and some of them still think it's temporary or that they're going back to somewhere else in a year or two, but like, yeah, we'll see about that.
Scott - [40:42 - 41:36]
They may be going someplace. That's probably out of business, but I love the codification. because when I first held the note contributors, I'm like, okay, I'm that couldn't possibly work. But I think the, I could definitely agree with the idea of you have a, your core team was building kind of the heart of the product. And then when you need some kind of expertise, people pop in and pop out and know before hearing the clarification, I was had this thought of what about the concept of team and camaraderie, and especially in an early stage company, you know, people come in it's, you have your altogether on doing a shared mission. No, in theory, help people get to the moon. You have the team come together with a shared mission to get to the moon. So in this idea, if you have people kind of drop in, drop out, is there still the necessity for companies to still make the effort around team building and employee engagement and things like this and in the future of work?
Dror - [41:36 - 43:06]
I think definitely. And if anything, it now has to be a more deliberate thing. So, I mean, one, one of the assumptions that people have, you know, over the last, let's say 50 years, 60 years, you know, we saw the decline of all sorts of other cultural institutions. You know, whether it is the church, even just the neighborhood itself and like interacting with your neighbors, and the office for many people in the corporation became like the main focal point in their lives. Also, culturally, you know, that's where you meet people. These are the people you socialize with. and, and not even just at work, but like you probably, usually you go to the same schools, you come from the same place, you were sharing the same place. but that's period in history. And again, even the edits at a tight, it wasn't relevant for most people on earth because they didn't work like that. But even if they industrialized Western world, yeah. Even at its height, it was a very small kind of phenomenon. And it was a very unique phenomenon in history. So for most of history, people didn't live like that. They didn't see their corporation as their core to their identity as the thing that gives meaning to their lives, as the place that they go to, to kind of, you know, to meet people and create friendships. And so one thing is we're seeing today is the emergence of all sorts of alternative institutions that look very similar to what we had in the pre-industrial world. So people are kind of congregating around all sorts of shared interests, both physically and digitally, and even the rise of, you know, religious feelings, both like known and organized religions and all sorts of other weird ideas.
Dror - [43:06 - 44:36]
That feature that are basically like religions today, that this kind of people get excited about and use to find meaning and to kind of find common language with people and for the office itself, it doesn't mean that the company will not be important in that regard anymore, but it means that it's not the default option anymore. And it's not something that just happens by itself, but yes, companies are those that will be deliberate about those things. They're like, okay, yes, I'm going to bring my people together as often as necessary maybe once a week, maybe, maybe once a day, maybe once a month, but I'm going to bring them together for a purpose. I'm going to try to nurture something, within this theme, maybe my hiring will change completely because I'm actually not just assuming that whoever I hire or just going to be part of like one big happy family, but that I have to be much more deliberate also about how I fit different people together. And, and strangely enough, that might make organizations actually less diverse in, in many ways, you know? So more like, like we're seeing in the rest of the world, outside of the corporate world, you know, more people sticking to people who are similar to them and similar racially or sexual preference, intellectually, ideologically, whatever it is that they have in common and say, okay, we're just going to work with people like us. And this is, and then we're going to be a real family because actually we do have something really in common. We're not just like people that get like an email from HR that say, oh, we're all one big happy family. And we care for each other and all of us know that it's not true.
Dror - [44:36 - 45:20]
And it's both. Yeah. But actually we're going to have more of that. and, and, and that too is very similar to the pre-industrial world where, you know, people's personal lives and work lives were really more integrated. Cause, you know, you can only work based on trust with people that have some kind of affinity, to you or you set up gills and kind of specialized organizations that, again, there are not corporate, they're either smaller or larger, but they're not like a single corporation. And, yeah. So I think the medieval world, or like the early modern pre-industrial world has a lot of lessons to, to us in terms of the structure of work and how people choose to live in the kind of boundaries that within a home and an office.
Scott - [45:20 - 46:49]
Super interesting. It's something that I've been thinking a lot about spoken about it in a past episode and another one that's coming in two weeks with that idea of the future of work and for people who are not working from a central headquarters and it could be fully remote, it could be working from flex spaces, coworking spaces, coffee shops. What have you does that future? Where does the community building and engagement come into play? Do companies still see, okay, this is something that we still need to do, even though our people could be spread out all over the place, totally remote working in all kinds of spaces. Where does it say which to the actual space itself? And I think kind of to bring up bringing one of your points, right? I'm a believer that a lot of the future co-working spaces or things like that will be like these guilds idea that it's something niche. It could be something very specific, like a very niching and you have all these little niche, coworking spaces or something like that pop up. And that becomes the attraction. It's like, they need to make the effort, Hey, we're building a community, we're doing engagement, we're doing events and networking things for this type of community. So does that like the team building? It's interesting. I've been thinking about this a lot. The who, who, who owns that now is the team even will accompany be happy for that? If saying, Hey, now the responsibility is within the actual space itself. No, we're kind of stepping back from community building and engagement because we know people all over the place and people are now more engaged in their own communities. So I'm fascinated by this. Please share your thoughts.
Dror - [46:49 - 48:10]
I mean, yeah, it's happening. And again, before COVID, we already started to see obviously the rise of WeWork and others, but also the fragmentation of even the coworking marketing through like coworking for engineers and coworking for architects and coworking, for people of color and coworking for women and coworking for women, with kids and coworking for that, that are divorced and with kids and working for all sorts of things. and, and we're going to see more of that in terms of how companies approach it. I don't think there's a single answer here. I think we're, we're going to see a lot of experimentation and what works for one company is not going to work for another. And this probably will kind of converge towards two or three kind of main options, but, it's not yet clear what they are. we're seeing that more broadly in the world of work, you know, where some companies kind of double down on like, okay, we're going to have very explicit values and political opinions and, and cultural views. And you know, everyone that works here, it needs to like, we expect them to like be in line with us. Then on the other hand, you have these companies, you know, let's say like Coinbase, let's say, listen, I don't care about your fault. I don't care about your cultural views. I encourage you to talk about it here. I don't want people to argue about stuff. We're a company, that's our role in the world and make money and take your money and make your life choices. And, you know, we encourage you and support you and you're free to do so. and, and they're going to attract different types of people. And I think they're both valid and legitimate.
Dror - [48:10 - 48:29]
So it really depends. And also for different teams, I mean, even within those set companies, you know, I think the engineers tend to have certain worldviews and marketing and design people, scent tend to have others. And so companies will just have to find ways to, to accommodate those things.
Do you ask the Github question about going into engineering and posting stuff and then I kind of lost you there somewhere.
Scott - [48:36 - 49:06]
Yeah. So the idea of of those options, it's the company community's really more virtual plus the opportunities to meet up in real life with a heavy focus on each individual being engaged and involved in their own community. That being most of their community engagement is within their local community. But sharing that content with the rest of the team to kind of build those relationships and build that community with shared interests and things like that. I thought it was actually kind of fascinating idea. I don't know if you have any thoughts around that.
Dror - [49:06 - 50:30]
Yeah. I think that's one of those experiments that I mentioned before. I don't know if it work for everyone or will appeal to, I think some people would be excited about it. Some people will not. And here I have my own biases just of my own tendencies. You know, I, I just like to work alone in general and I'm not excited about doing stuff as a group. And I think I tend to fall on like, you know, the work itself should be meaningful enough and exciting enough that I don't have to generate all sorts of other things for people to kind of feel like they're doing something useful in the world. and, and you can see this as like, okay, this is like hyper capitalism companies only need to make money, but it also means, yeah, you should let people work on stuff that is actually meaningful and that they feel comfortable with. And that they're proud of rather than like, let them produce whatever crap it is you're producing and then try to make them feel good about themselves by going and doing something else. And that's not criticism I'm getting happy, felt like actually a cool company and they're building using the tool for humanity. so, but, but just in general, I think the best, the higher echelons of talent, I think are not the type of people who will be excited by these type of things. They want to work on problems that are meaningful to them and that they're excited about solving. so, so that kind of stuff is more like it's relevant for the organization as a whole, but probably not to like your top, top talent.
Scott - [50:30 - 50:34]
Interesting. Yeah. Makes perfect sense.
Dror - [50:34 - 50:45]
We'll go back to him. He, wasn't excited about, oh, let's go to like a Florida and have a fun, fun with the team and, or, you know, like let's, let's win a championship.
Scott - [50:45 - 51:56]
It is interesting because yes, it may be like that specific percentage of talents. is it gonna be like the last question I have? It's no, maybe the idea of the Dow will be kind of the combination of all the things that we have spoken about is maybe the best solution. It's individual contributors who are compensated based on again, what they contribute and what we look at, I guess, no history that so much research has been done, that the biggest, no money has never been the biggest motivating factor. That's not the motivating for, for happiness or why people stay or why people leave anything to think again, how that piece comes into play, where again, most, I mean, there's probably very few percentages, a low percentage of companies that are really making a big impact in the world. Really changing the world, really moving us forward. The most people it's like, Hey, I need a job. I need to pay the bills. I need to know make money. And they're not no working with these companies. It's so how maybe kind of like that dowel mentality that the contributors know versus employees and being compensated based on your contribution to the organization, come into, come into play of how people are happy and engaged or not happy or so forth.
Dror - [51:56 - 53:39]
So here I might sound a little cynical, but that's how I, and just please go for it. That's how I understand the world when I look at it. So, you know, if you look at the history of capitalism and in particularly the industrial world, it's like an ongoing negotiation between basically labor and capital. and the goal is to convince labor that they have more freedom and more power and, you know, more agency in order to fit into whatever system and whatever way of work, that's basically capital or even technology dictates at the moment. So I think Karl Marx, and I'm going to quote with marks now That we're getting controversial. I forgot, I forgot The quote, but like, and I'm not list by any measure, but like, you know, basically the prevailing technology of the era defines the social relations and the cultural relations of the era. so, you know, we companies started to provide all of those things as we spoke about previously and started to replace all of those institutions because they had to, and when companies needed masses of similar employees to come and sit and do the same thing, they found ways to justify that and to make that palatable, they needed to pay people less for all sorts of reasons. For example, competition from globalized, economy, they started to give them all sorts of other things instead of money. So they said, okay, let's give you healthcare. Let's make the office a little nicer. Let's do all sorts of things, but not pay you a little more, when they needed more flexibility to deal with a dynamic environment, they said, okay, let's, you know, start it. And with gigwalkers saying, okay, we're going to give you the freedom to work any way you like.
Dror - [53:39 - 55:04]
And again, I'm, I'm cynical, but I'm also not fully cynical because that freedom is really freedom. You know, someone who works for he gets freedom and yeah, there there's there's trade offs and these are the trade off a hundred percent of our times. So I think the next step from there was okay, let's do that for more employees, give them the flexibility to give them the ability to work remotely, which means that the relationship between capital and between a corporation and the employee is changing. So the employee gets less security, more volatility, but they more freedom. They get more control over their own time, which two of them will use well in some of them will not sure. and I see Dows and these kind of co-ownership models as a clear kind of step in that evolution. So they're not really a way of like, like a break of saying, okay, now finally, the employees have power and they're going to break out. They're basically saying, listen, I wish we could employ all of you, but we can't. So let's come up with some model that is attractive enough. So people will keep contributing. and some of you will end up making a lot of money. Some of you will end up not making a lot of money, but maybe all of you will be happy enough to at least come and participate. So it goes back to that idea of what we discussed before of like, okay, if I said before, Google was being a thousand engineers, and just assuming that one of them is actually going to be useful, but of course that's not a very economic way to do it, to pay a thousand people, but Google can do it because they already have a lot of money.
Dror - [55:04 - 56:40]
And they're in a business where these outcomes are kind of like almost guaranteed. So they know that they'll be able to pay for it. But if I'm starting a company today and I'm saying, Hey, I want to get a thousand people. And that's one of them may be, will be amazing and come up with this idea, but I don't have a billion dollars to pay each of them, like 500 pay now for the next few years. So now there's an emerging economic model that says, okay, we can attract thousands of people through these projects. And we're going to convince them to willingly participate in this lottery without you giving them even a base fee. And we're also still going to enable them to win the lottery if yeah. If they do, but then everyone else will not win. And also there'll be happy because they'll be like, oh, I participated in the Dow and you know, I contributed something, I got something back. Yep. And those people from their side, they're not necessarily oppressed either because maybe they participate in 10 other lotteries in parallel and you know, they're not a project, so do something else or have another part-time job. So they're kind of happy as well, at least to the extent possible. Like they understand, okay. We now live in an economy where all sorts of things that used to be normal are just not existence anymore. Yeah. So maybe I would want to have a job in the same profession at the same company for 40 years, and then retire with dignity and put my kids through school maybe, but that's not possible for most people. So what is possible is to just play these multiple lotteries, participate in various projects, some of them take off, some of them don't do some other stuff that maybe generate some stable income, but maybe not the level of income that you want and constantly invest in yourself and learn and improve and try to catch up with whatever's happening.
Dror - [56:40 - 57:04]
and maybe that's, maybe that's the best chance that we have. I mean, from, from my perspective, you know, that's why I decided to be a teacher online because I think people need to learn all the time. And I agree, I'll start as a teacher, I can just teach different things all the time and kind of run and kinda try to be ahead of the curve and be useful in my own way and also make a living. So yeah, I love it. Love it.
Scott - [57:04 - 57:08]
so how can people find you get ahold of you find out what you're working on?
Dror - [57:08 - 57:26]
What's the best way to I do so, so my crypto course is the easiest one to remember that's hype free crypto hype free crypto.com. I'm on Twitter @drorpoleg. Also on my website, the newsletter. drorpoleg.com and yeah, that's where you find me.
Scott - [57:26 - 57:41]
Amazing. Dror thank you so much for the time today was an excellent, fantastic conversation and been looking forward to this for a long time. Since again, coming your way, last year about, talking about the future of offices and obviously so much more. So I appreciate the time.