The impact of DAOs on the future of work with Nik Kalyani of Decentology

Maren Kate
Awesome. So I am super excited to have Nik Kalyani here with us today. He's the founder and CEO of Decentology and was previously the co-founder of DotNetNuke, one of the largest open-source CMS projects in the Microsoft ecosystem, where he was awarded Microsoft MVP for 11 years. So, Nik, from where you're at now, I want to take you all the way back to your first job, the first job you got a paycheck and had to pay taxes on, what was that?

Nik Kalyani
First of all, Hi, and thanks for having me here. So my first job out of college was I worked as a network administrator at a factory, a plant, making cereal boxes for General Mills and Kellogg's, which is one of several 100 owned by a large company and I just managed the network.

Maren Kate
How did you get that job?

Nik Kalyani
I got that job through a job fair that they had in college. I went to school in Western Michigan, University in Kalamazoo, Michigan and it was just through a job fair.

Maren Kate
Okay. I actually never knew that job fairs work. I never went to any at my university because I kind of assumed they didn't but obviously, they did so that's cool. And from there, what led you to what you're doing now?

Nik Kalyani
Yeah. So Decentology is my fifth startup and prior to that, I've had two failed and two wins in my startup world.

Maren Kate
That’s a pretty good rate for startups cuz most of them fail.

Nik Kalyani
Yes, yeah. And I'm quite proud of that. A lot of hard work and a lot of good learning. Even the failures I consider a success because I grew as a person. But yeah, so what happened, you know, this is really sort of strange journey because when I was working at that facility, as a bored person with not a whole lot to do, I started tinkering with some software. I saw that they weren't using the machines that were making these packaging boxes very optimally so I wrote some software to optimize the scheduling. And long story short, it saved the company like two or 3 million bucks in just a few months and so the CIO of the company came down to the plant and said, “You don't belong here, you need to be at headquarters” and I got moved to Cincinnati and I got a title of IT Research and Development, and I got a budget and was told just do something, do whatever you want to. And so this was well before the internet was all over the place. It was the days of CompuServe and all that and so I networked some 50 facilities, got email everywhere, and optimize everything but working at the headquarters of a company I saw very quickly that it was not for me. I didn't like the politics and all that kind of stuff so on day number 365 of my job, I went and told my boss, “I am leaving and I will never work for anyone ever again”. And that's it so I quit that job.

Maren Kate
Was there a reason you waited for day 365, a year?

Nik Kalyani
One year, one year, you know.

Maren Kate
To vest or just to have the year?

Nik Kalyani
Yeah, so I did something, I stuck it out kind of, I didn’t want to like….and then what do I do now?
So I decided I wanted to be a software consultant and so I decided, okay, what can I consult on? I don't know a whole lot so I inquired about what's the highest paying consulting software at the time. And at that time, it was Lotus Notes and so I'm like, okay, I'm a Lotus Notes consultant and just looked around for a customer, and luckily signed up Toyota. Long story short, I created a consulting company, grew it in four years, and sold it.

Maren Kate
For us who don't know what was/is Lotus Notes?

Nik Kalyani
It was a collaboration software. The equivalent today might be Slack.

Maren Kate
Okay, very cool. So you sold that and then what did you go on to do afterward?

Nik Kalyani
Yeah, so the reason I sold that is because I wanted to do something product-related and so I had this idea at the time, you know, web portals were the rage and I had this idea of having many pluggable applications that run within portals. And so I created a startup called iWidgets and I raised capital, $7 million from Draper Fisher and other companies here, and that was my first internet startup. And so I grew that and had a company, had a product, etc, and then the stock market crashed and there was no Series B in sight and so, unfortunately, that was my first major venture-funded startup and also my first failure but I learned so much. So then I was like, Okay, what do I do? And then got involved early on in DotNetNuke it was a great community and work with them to essentially build up a company with three co-founders. And that one, we took it from inception all the way to a very large worldwide community of developers, millions of websites, etc. And that brought me to Silicon Valley, helped raise capital for that one. And that was open-source software, much harder to kind of monetize. So worked on that, and eventually built the business model and had customers, etc., and had a great team. And we took it to commercialization and eventual exit in 2017. And then was trying to figure out what to do. And I was, I was very much into crypto. Very early on, I was mining Bitcoin. And I was learning about Ethereum and Solidity. I spoke about it at several conferences, and Udacity, an online learning platform, got in touch with me and they invited me to sort of help collaborate and work on their blockchain nano degree to help developers learn about Solidity. And I love teaching. So I did that. And that was great. It was a good learning experience. And at the same time, I also co-founded another startup with Scott Adams, the creator of the Dilbert comic strip.

Maren Kate
Yeah, yeah, yeah. I’ve read his books. I like them.

Nik Kalyani
Yeah, he’s great. We built a platform called WhenHub. What the problem we were trying to solve is if an ordinary person wants expertise on any topic, anytime, they have to seek out and find an expert and then get their time, and we built a product called Interface that made it easy to chat with an expert on video anytime. But it was all blockchain-driven, you have per-second billing that was done on the smart contract. So on that one, we got to like 80,000 users or so but we couldn't scale up because crypto was still hard. It was still very early days. And so we kind of folded that so that was sort of my second failure. So that brings us to four. And then, you know, working on this Udacity training, etc, I got a very good sense of how much friction there is for developers to build in Web3 because it's all new. The documentation is not current, the libraries are hard, it's a new programming model, etc., so that is the genesis of Decentology, which brings us here. We decided we want to solve this problem and make it super simple for developers to build. So our mission is to onboard 10 million web developers to Web3. We started off by building a platform called DappStarter and what DappStarter does is it compresses time. What would take a new developer maybe two weeks before they get that aha moment, oh, gosh, I got this running on my computer, you know, that excitement, we compress that down to about 10 minutes through DappStarter and we saw growth. We had about 12,000 projects built with the platform but we felt like that's not fast enough. And so we're like, “okay, we need to step back and figure out what to do” and long story short, that is the genesis of what we are building right now, which is called the Hyperverse. We are building an open decentralized marketplace for smart contracts. In plain English what that means is we are building Lego blocks of smart contracts so web developers can put them together in any combination they want and build sophisticated apps without learning smart contract languages.

Maren Kate
I like that a lot. It's like what Squarespace or other website builders that you're just dragging around blocks without understanding the code that makes those interact.

Nik Kalyani
Yeah, the word we use is composability. If you think about Web2, Web2 grew really big because developers had access to these APIs, like Stripe for payments, Twilio for messaging, Google Maps for mapping, Amazon for storage, etc. They didn't have to think about how to build all these things. They just use them in their apps, right. So there is this no-code movement where you don't write any code and do the drag and drop like you just described. But for developers, there's this component kind of model where they can take components, put them together, and write sophisticated apps. So it's not no-code, it's code, it's like less code. You basically are using components written by others and then wiring them up together in creative ways to build applications. So that's what we are building with the Hyperverse.

Maren Kate
So no code would be like you just put two blocks together. And what you're talking about is you put them close to each other and then you wire in between.

Nik Kalyani
Exactly. So the complex part is done by a developer who knows that complex part and you just kind of wired them together as a developer.

Maren Kate
What is the language or the codes or bit that developers need to know to be able to wire those blocks so to speak?

Nik Kalyani
Yeah, so we are targeting web developers and for web developers the language of the web is JavaScript. So if you know JavaScript…

Maren Kate
Just JavaScript. Okay. So it's very broad.

Nik Kalyani
Absolutely. Our goal is to make it possible where if you're thinking about building a Web3 app, at some point here we're gonna have hundreds and hundreds of modules, and just wire them up together and create any kind of application you want.

Maren Kate
What would be an example of an application that's recently been created using your platform?

Nik Kalyani
Yeah, so there was ETHDenver, just last month. We just launched our platform there so it's early days right now so we are working with customer partners to build applications. So one example would be sort of a company that is in the sports domain that is making it possible for all the fans within that sport to get NFTs of all the players and to have, sort of, if you've heard of NBA TopShot, it's for basketball, you have these moments of basketball games that people can collect, much like collectible baseball cards, so we are making it possible to do that in any sport using our platform. Another thing is we are building a game engine. So game developers can take these building blocks, for example, you might want to have a game where there are assets. Those assets could be in one game they could be weapons, in another game they could be toys or something like that and so you use these modules and build different kinds of applications. So one particular gaming module is called Play To Earn, where the players as they're playing they earn money. So that's one type of application you can build. So the range is pretty broad. And one of the things we are doing is we are not building all these modules ourselves. We are creating what's called a DAO or decentralized autonomous organization and we want developers in the community to build because we are creating a business model where third-party developers can build these modules and essentially have a lifetime of income.

Maren Kate
Hmm, I like that a lot. So they build one module…So it's the App Store.

Nik Kalyani
100%, exactly the App Store model, and in fact, the only difference is it's fully decentralized. In the App Store, there's an approval process, etc. What we are building is a community-based model, where there are auditors of this code in the community. They will audit the code and if they think the code is secure they will actually have to stake tokens. They will have to put their money to say that “I'm confident”. It's almost like an insurance layer for software is what we are building which has never been done before and we are super excited to do that. In exchange for staking your tokens and auditing the code what happens is that every time that module is used, a small piece of the transaction fee for that is distributed pro-rata to those auditors, a small piece goes to the developer, and a small piece goes to the DAO. So that's how the DAO makes money. We are taking what is successful in Web2 to the cloud-based per transaction model and we are bringing it but in a very open and decentralized way into the blockchain world. And we are blockchain agnostic. We are going to work with all the blockchains.

Maren Kate
I think that's really, really interesting and exciting. It kind of leads me to my next question and maybe you even answered it which is thinking of professionals, thinking of people that are maybe looking for their next job and want to get more involved in crypto, in Web3, what would the advice be for a non-engineering professional to break into the decentralized web and break into companies like yours, like others? What skills do they need to learn? What tactics should they try?

Nik Kalyani
Sure, yeah. Right now in Web3, this is a time where there's so much opportunity because it's all new. There's all kinds of new innovations that people are trying out. And the biggest thing that's happening right now is the emergence of DAOs, decentralized autonomous organizations, as we talked about, and they give lots of people who are non-technical the ability to essentially participate in communities and learn, grow, and make money. So some of the skills would be in the marketing area, it would be in product development, it would be in a UX design, etc. So the pathway that you want to take is, first of all, you need to understand how the ecosystem works. The ecosystem generally right now consists of a number of communities that congregate using a platform called Discord. It's just a chat platform but it's unique in that it's designed to be very quick to set up and very easy to manage. So Discord and Twitter, those are kind of the two main areas. On Twitter is where people discover a certain project, you read about it, see someone tweeting about it, etc., and almost always in their profile, you'll find a link to their Discord. You go to their Discord server, you join it, usually, there will be some kind of onboarding process, you got to agree to some rules, etc., and the Discord might be gated or ungated. Gated simply means that you cannot join it unless you hold a particular kind of token or NFT or something like that and in which case it will be open to you but otherwise you can't access it. So let's assume it's an open DAO or where anyone is welcome. In that case, what you would probably do is you would go into the general channel there and talk to people etc. But the way you actually get started working is almost all these DAOs have bounties. So, think of bounties as paid for tasks that are listed where it's very ad hoc. You take on a task, you complete it, and you do that a few times, you earned some money or there might be some free tasks also where you can volunteer but the idea is that, in order to qualify for the more meaningful or lucrative tasks, you first have to establish your credibility in that community by doing some of the smaller tasks, by being there, by communicating, by chatting with people, giving your thoughts, opinions, etc. So you literally have to sort of immerse yourself in the community and start building in order to grow with them. And because these projects, the DAOs could span any kind of project. Like you could have a DAO that's making a movie, in which case, guess what, you need people who can write movie scripts, who can film, who can do costumes, whatnot. You could have a DAO that's created around creating an education platform for a certain kind of topic. In that case, you would need writers with subject matter expertise in that. So you first need to identify a DAO that is in your domain and once you get in there then really the types of work you can do are very diverse. Now, I must say that DAO being very early, they’re figuring out a lot of things. We're figuring out how to communicate, how to reward work, how to do governance, and these are evolving very quickly. And there's some excellent discussions going on online right now about governance in particular because just to step back a little bit, the whole point of DAOs is about making it possible for people, the workers who are contributing, to also have ownership. In a traditional business, ownership is concentrated among a very few number of people, it's the management and the shareholders. The shareholders, they typically don't take part in too much governance. Hardly anyone ever goes to a shareholder meeting and, you know, they just kind of do it for the money, right? But so DAOs allow employees to have control, have a right to how the DAO functions In a DAO it's almost as easy as this, someone has an idea, they submit a proposal, other people vote on a proposal, maybe they can refine it a little bit, and if everyone approves the proposal becomes how what the DAO does.

Maren Kate
The law.

Nik Kalyani
Yeah, the law of that. The great thing is that the tokens you hold, these are essentially called fungible tokens, the tokens you hold, maybe you bought them, or they were given to you in something called an airdrop, those determine how much ownership you have within the DAO and as the DAO grows and those tokens appreciate in value so does your value.

Maren Kate
Interesting. To me, personally, the thing that most interests me about everything that's happening is the idea behind DAOs and the idea of behind rewarding impact versus the traditional. Think about it, it's like most people that are involved in early-stage startups over their lifetime, a handful will be winners and if they got stock in those winners, depending on how much, that will be some sort of monetary outcome, like win, but the vast majority will either be failures, or they'll fold, or they'll never have a monetization moment. And besides the people at the very, very top, most of those employees, workers, people that put time and effort in, advisors, won't see anything from it. And so I imagine that there will be a world where you could have DAOs around different things, different groups, and it could even be something as specific as startups that were founded in 2023, like an index fund, and if you think that overall those will participate well you can get into that, buy in. That's really awesome.

Nik Kalyani
Yeah because it's so new and there's so many possibilities. For example, there are DAOs of DAOs so instead of the constituents being individuals there are actually other DAOs, there are sub DAOs if you will, etc. So what needs to still be figured out is can DAOs work beyond the information economy? When we're working with information, whether it's writing, reading, software, etc., it's digital, it's intangible, so it's easier to work with it. But once you get into supply chain and buildings and machinery and all that how would DAOs work? Well, there's models right now, there are collectives, etc, that create, for example, farmer's markets or handicraft things, etc. That exists but it's yet to be proven about how effective DAOs would work in that model. But because the ownership culture is….

Maren Kate
Is that the legality of it?

Nik Kalyani
Well, I think legality might be a problem but I'm thinking logistically, first of all, like, who owns the machinery? Because even now I think, if my information is incorrect, Wyoming is the only state that has actually allowed DAOs to be legal entities right now. So even that is an issue up in the air. Like, if a DAO has to be sued what is that? These are all questions that are unknown at the moment. And then you add owning equipment, or land, or assets like that, how does that work? It's a lot easier for a DAO to go and say that we are going to buy this Bored Ape NFT and fractionalize that so it's $250,000 but every owner as a micro portion but how do you do that with machines or land?

Maren Kate
Or land. Cuz you think of it as like the next version of home-sharing or something like that but it'll be interesting to see as that shakes out down the line. I guess another question, too, and I'd love to know how you guys do it and then just your thoughts on compensation around employees and teams building these Web3 companies, how are you approaching that? Are you approaching in the traditional startup model, here's your base salary, here's your equity in the C Corp, or is crypto and different forms of compensation coming into the conversation?

Nik Kalyani
Yeah, I mentioned, it's a mixture of both. There are many companies that start off with an equity-based model like a typical Silicon Valley startup or any other startup or like a C Corp, etc., but more and more, and the way we are approaching it is, the ownership comes from tokens. So generally, if you are a crypto native business, at some point, you're going to have what's called a TGE, a token generation event, where, presumably, you have a token for your company that has some utility. If you don't have a utility for your token, it's considered a security and then you have to go through the securities laws and regulations and go through the courts. But assuming you have a utility for it then you have a token generation event and the team members are issued tokens, which also vest over time and that's how the ownership culture is growing from day one. You can still pay people. You still have to have that but you can pay people in crypto. For example, people get paid in USDC, which is a stablecoin, so that means that if you're getting paid $1, you are receiving $1 and then you can convert it to any other crypto that you want. Or you can even go through an exchange and convert it into fiat currency, dollars, pounds, whatever your currency is. So you can do all of that. In our particular case, we are going to have a token event in a few months and so everyone knows that so right now there's a combination of crypto payments and fiat payments but eventually everyone will move into the DAO and be paid in crypto.

Maren Kate
So everyone will be paid in crypto. And then if they want to, when they pay their rent, or whatever, how does it work? They just transfer it into fiat and then go do it that way.

Nik Kalyani
Yeah, I mean, in general, you would use a centralized exchange, so exchanges like Gemini, Coinbase, etc, to transition from cryptocurrency to a fiat currency.

Maren Kate
Are there companies that you know of that have started that are actually…Like, the way I pay my rent I use some service called Click Pay or whatever and Click Pay goes from my bank account to theirs and they do something and it goes to whatever massive organization owns my building. I wonder if, in the future, there will be these versions that are just for crypto. So it's like, I get paid in crypto, I'm gonna pay my rent in crypto, and then the company that takes my rent crypto turns it into fiat and or has some deciding thing with the building where it's like half of its fiat, half that's in crypto because there's that potential upside. I mean, there's potential downside too.

Nik Kalyani
Yeah, there's many emerging economies right now that don't have a really good banking infrastructure and there crypto is it, you know. Obviously, in the western world where there is a good banking infrastructure, fiat rules the day. But we are moving toward a point soon where more and more services accept crypto and then the dream of decentralization will be realized. Because products and services require fiat, you have to have this bridge to go from crypto to fiat but in the ideal world, in an ideal decentralized world, everyone accepts crypto and so you don't have to….

Maren Kate
Be changing it around.

Nik Kalyani
Yeah. So people's motivation for accepting crypto is different. For example, one is convenience, especially when there's cross border payments involved. Crypto is great for that. You don't have to deal with banks and waiting periods and clearing periods and all those kinds of things and fees, you know, those are a problem. But let's say it's not cross border, it's within the same country or state, in that case, I like to think of forward-looking, you know, landlords, service providers, etc. There used to be a time when you could never pay anything with a credit card. You would have to have a check or cash but that changed. There are lots of places where you can pay rent with a credit card, you know. So crypto’s gonna evolve in the same way. People will see that it's another way of payment, you know, it can be cracked, etc. And the thing is, that happens as legislation catches up. Laws are always frequently running behind and so people who are only listening to the media that is all about clicks, they're generally gonna only hear stories about crazy stuff happening in crypto. But the fact of the matter is a vast majority of us in crypto are actually just normal people who are happy to pay our taxes and all that. We are not money launderers, we are not crazy scammers, etc, we are building a future that we believe in because it's about legality. It opens up opportunities to everyone, everywhere, of all kinds of socio-economic and intellectual levels. That's the society we want to build because it has failed us today and crypto as a way to get there. We are waiting for the last to catch up and as they catch up we're happy to follow those laws and pay our share of taxes, etc. So the fact is that, as the laws come into focus more and more people will feel comfortable accepting crypto as payment and that's when we will see an explosion and real true mainstream growth of the decentralized economy.

Maren Kate
Yep, I love that. That excites me. I think that future is very exciting. If you weren't doing Decentology right now, what startup would you start? If you had to start something completely from scratch tomorrow what would it be?

Nik Kalyani
Well, I'm actually doing it. I have two other projects that I'm working on concurrently. So one is called TryCrypto. So that is an organization devoted to ending the gender imbalance in tech, generally, and crypto, specifically.

Maren Kate
What is that again?

Nik Kalyani
Trycrypto. So there the business model is very simple. I'm trying to build a DAO of all women who are building products to make crypto more accessible to mainstream users. So we're solving two problems at once, getting more women into the space, helping them learn how to build products at all levels, product, marketing, design, software, but solve the problem of onboarding users. So we are creating this product where we have user journeys. So let's say that you are a person who wants to learn about crypto, you don't know anything, well, there's a journey for you, my first crypto transaction, or build a wallet or something like that. Or if you're into decentralized finance, so we can work you on a journey through that. So we are doing that and we are also giving scholarships to women who want to learn how to build crypto. So that's one thing and then another DAO I'm working on is called Nifty Dreams. So this is where I have, through Twitter and working with 1000s of NFT artists worldwide, have started to help them create this new world where art is on the blockchain and is democratized. Art has been the purview of the wealthy, it has been inaccessible, it has had middlemen but now with NFT art is accessible to everyone. But artists don't know technology. They don't know marketing. They are creators. They know how to create art. And so with Nifty Dreams, we're creating an organization that helps organize exhibitions, events, helps artists learn how to create NFTs, how to market them, promote them, etc. So I love art and I want to end the gender imbalance in technology so I created these two things to make those problems go away. So that's my passion.

Maren Kate
I love that. I'm gonna sign up for TryCrypto. I think that's awesome. This has been such a pleasure, Nik, thank you for being on the show. And very enlightening. I have all these things to look up after this. I have two quick final questions. First of all, what's your favorite podcast you've listened to in the last year?

Nik Kalyani
So my co-founder Chase Chapman has a podcast so I listened to that. I am not a big podcast person because it's hard for me. I read faster than I can listen.

Maren Kate
Really? I’m the opposite.

Nik Kalyani
Yeah. So I can't process information as well when I'm listening to it. I just can scan an article much faster. So I listened Chase Chapman's are podcasts so that's a big one for me. She talks with people who are sort of creating the new world of Web3, like, who are the movers and shakers and innovators in this world.

Maren Kate
What's the name of the podcast?

Nik Kalyani
She's gonna kill me for this but ahhh…..

Maren Kate
No worries. We'll look it up and put it in the show notes.

Nik Kalyani
It's On the Other Side. It just came to me.

Maren Kate
Okay, perfect. And then what's your favorite book from the last year?

Nik Kalyani
Hmm, that’s a good question. I haven't read a new book lately but I did revisit a book that I read a long time ago because as the metaverse and all that is coming into play, I love Neil Stevenson, and his original book called Snow Crash was what started this and that's the most sort of recent book I reread. And I love it because it paints a picture of the future, which is now the present for us, you know. I found it pretty exciting.

Maren Kate
Yeah, that's a really good one. I read that a few years ago, too. And last question, how can people find out about you and what you're doing at Decentology? Where should they find you on the web?

Nik Kalyani
Yep. So we are at decentology.com and myself, I'm very active on Twitter, I'm @techbubble, T-E-C-H-B-U-B-B-L-E.

Maren Kate
Awesome. Great, Nik. Thank you so much. It's been a pleasure.

Nik Kalyani
Yeah, thank you so much. I really enjoyed this conversation and thanks for having me.