The next generation of employment with John Paller of Opolis

Maren Kate
Welcome. So today, my guest is John Paller, founder of Opolis, a decentralized employment organization, which offers employment payroll and shared services for independent workers. John was also an early adopter of Etherium and is the Founder and Executive Steward of ETHDenver. John, welcome to the show.

John Paller
Thanks for having me. Great to be here.

Maren Kate
Absolutely. So my first question, as it always is, is what was your very first job? And then, if that job wasn't a job that you filled out a W2 or paid taxes on, what was your first real job as well? I like to get both.

John Paller
So my first job was mowing grass in my neighborhood when I was about eight. So I convinced my dad to let me borrow the corded lawn mower that we had and I'd go to my neighbors and ask them if they want me to cut their grass. And I do that for 10 bucks a piece or something like that. I did that when I was really young.

Maren Kate
10 bucks is actually pretty good for an eight-year-old I feel like.

John Paller
For a kid, for an eight-year-old, yeah, it was great.

Maren Kate
That’s awesome.

John Paller
No, it was pretty good. I had a pretty good hustle going. By the time I was 12 I think I was doing something like, I don't know, it was like 15 a week.

Maren Kate
Oh, my gosh.

John Paller
These weren't big yards but a bit of work.

Maren Kate
So what was your first…

John Paller
W2 job?

Maren Kate
Yeah, W2 job.

John Paller
So I worked at the mall at Footlocker wearing the stripes, the referee stripes. I sold shoes at the mall.

Maren Kate
Okay, so you went from lawnmowing to referee stripes. Well, it's all in the similar sports theme, grass, referees.

John Paller
Well, some of it was I just wanted to get cool shoes. So I had a friend of mine that was working there and he always had the latest cool basketball shoes and stuff. So I was like, well, I want to do that.

Maren Kate
And air conditioning probably helped.

John Paller
Yeah, well, and you get paid pretty good. I mean, I'm 16 years old and I was making more than some of the adults that I knew just selling shoes.

Maren Kate
At Footlocker?

John Paller
Oh, yeah.

Maren Kate
Was it a commission plus hourly?

John Paller
Yeah. Hourly plus commission. They don't start you off that way.

Maren Kate
I didn’t know Footlocker did commission.

John Paller
I don't know if they do anymore but they used to. So it used to be they started you off as just straight hourly if you're just clerking and stuff but once you kind of got good enough you could convince them to move on to this hourly plus commission model, which I did.

Maren Kate
And if you're a good salesman, you could actually probably crush.

John Paller
So I grew up in Salt Lake City and we were downtown. At the time, the largest mall in the downtown area, and it was right in the city center of everything and our store was right in the middle of the concourse on the main floor so it was really busy. We even saw NBA players that would come in and it was a really busy store so it was good for that. We got a ton of traffic so I tried to work as many Saturdays as I could even during the summertime because that's when everybody was coming in. And I mean, you'd be busy from nine o'clock in the morning until nine o'clock at night. Just crazy.

Maren Kate
So what did you move to, workwise, after that? Did you go into sales or did you go into something completely different? Like, walk me through your journey.

John Paller
Yeah, so in college the Dean of my business school was a former partner of what was at the time the Big Six and he was always trying to talk about how accounting is the place to be and that's where you can make the most money and all this kind of stuff. And it's like, “oh wow, cool” but you don't really have an understanding of how boring that is for somebody that was more…I did a lot of people-related things, and sales-related things, and sort of more physical related things. So then once I actually got my first accounting job out of college, I was like, “wow, this is really boring” and I just didn't see myself sticking around. So what ended up happening was, I got recruited by RHI, that's Robert Half International, because of my accounting degree.

Maren Kate
Okay. Did they recruit you into accounting or into accounting recruiting?

John Paller
Well, it was into accounting recruiting. So they're like, “well, we need somebody with a sales background but also understands accounting”. I didn't have any idea what any of that was, what recruiting was, or how recruiting fees worked, or staffing worked. I had no idea. I was just like, “cool, I'll do that”. So I was so sick of my accounting job that I just decided to do that. And then I ended up in Denver after, well, they called it a promotion but it was really more work, less pay. I was told I had an eight-person team and all this and I got here and the team kind of left and moved to different departments and fell apart even before I started. I was like, “Wait, you don't really have a team. You're really starting this thing over. I don't know anybody in Denver and you want me to come in and rebuild this?” Well I ended up in Idaho working for them. That's where I…They said, “pick where you want to go. Here's the openings”. I had some friends from college in Boise so I decided to go there. I was there a couple of years maybe and there were a couple of other guys that were there that…It's not complicated math. If you're doing direct hire and you're doing the perm placement fees, you're getting 30 cents on the buck or something.

Maren Kate
Was Robert Half, was the way it was set up then, they paid you a salary and then some sort of commissions?

John Paller
Well, it's technically, on the direct hire side it was always a draw. So you still technically…

Maren Kate
Like real estate

John Paller
Yeah, it was kind of a draw. So they're giving you a salary but in order to make any bonus, you had to then pay back your draw first, and then you would get into the bonus calculation. So, we started talking about starting our own thing not too long after I got there, like maybe six or eight months. If we billed half as much as we did here on our own, we could make twice the money. And so it was kind of an attractive proposition for me to have more flexibility because then I didn't really like going to the big office building downtown and parking and all the bureaucracy and it was so political. I just did not like it. It was a very different culture than what I had experienced in Idaho. Idaho was very team-driven. It was a very small team too so it was very easy to manage. This was something like 60 people in the office. It was big, bureaucratic, political, so it just didn't fit well for me. So I'm like, “let's go start their own thing”. So we started, what was the predicate to People Partners, which turned into Lakeshore, which is now Lakeshore Talent. I sold that business to the employees in 2017. So I built it for about 15 years, did an acquisition…

Maren Kate
That was what I was going to ask you. So it was a 15-year journey from start to acquisition.

John Paller
From start to exit, yeah.

Maren Kate
What were the things that you thought would be really easy or maybe not really easy, but what were the things that you didn't know were going to happen, and what was difficult, what was surprisingly simple, when you struck out on your own? From your nine to five to becoming a founder, a business owner?

John Paller
Oh my gosh, you don't know what you don't know. So when I took the leap off to the plank, when I walked the plank and started my own business, the two guys that I went into business with, I made some fairly general assumptions about their personalities, their ethics, their work ethic. It's amazing how different people can be when there's no management structures telling people what to do. Entitlement can be kind of a problem. So like, when nobody's your boss, when there's no hierarchy, it's just three guys starting their own business, there's no one calling the shots, we're all sort of responsible for our own performance. They didn’t at times.

Maren Kate
How did you guys structure it when you started? Was it like 33, 33, 33?

John Paller
Yeah, it was one for all and all for one, right? So like, the idea was that, regardless of the output, as long as everybody's putting in equal effort we didn't care about splitting the pot. But it ended up, pretty quickly, that equal effort wasn't happening. One of the guys, I mean, he was kind of a really good dude. I still have a lot of fond memories of him as a friend. I mean, we don't talk anymore. But it was really frustrating because he had a very, sort of, all or nothing personality. So like a new video game would come out and he’d be at his house all week playing it. What are you doing? It's just very challenging trying to deal with how do you get out the gate? How do you create? I mean, one of the attractive things about starting your own business is having the freedom and flexibility to do what you want. But now you're in, kind of get in a marriage, so to speak, with two other people that have different life goals, in different life preferences, and want different outcomes. They even define success differently than you do. And it's like, “wow”, getting on the same page with that was a lot more difficult than I thought. So I would say that I'm a lot more careful now about making sure that we have alignment in people that I work with and that's alignment of purpose, alignment of values, and a general direction of alignment of worldview.

Maren Kate
I also think that what success looks like is what you mentioned. That's incredibly important because…

John Paller
Defining success has to be common language. If you don't have a common definition of the standards of success, like, what does success mean? Oh, man, it's really interesting to see if you don't go through the process of defining that or screening for that after you've defined it, it creates huge problems with misalignment, huge problems, and I've learned that over and over and over. I've been an entrepreneur for over 20 years. Unfortunately, I've made those mistakes more times than I'd like to admit. But yeah, so you have to learn from those things probably faster than I did. I rinsed and repeated that particular problem a few too many times.

Maren Kate
That’s with life. We tend to do that in life, repeating our patterns until we finally break free. So fast-forwarding to Opolis, how did you approach the founding of that? How did you approach it differently from all your experience previously?

John Paller
Well, it's interesting, after we got some pretty decent traction with what became Lakeshore we started getting ambitious about expansion and scaling and growing and really adding more value to our community members, candidates, employers and I started talking about democratization of employment. Now, at the time, I didn't even know what that meant, really. I mean, if I really rewind the tape, I was saying it but I had more of a general directional understanding of what it meant. I didn't really understand functionally what it would be. And where that came from was we were payrolling hundreds of people per week, at this time, and this is before even ACA was a thing, like the health care bill, but we were like, well, how do we create a situation where the workers, temporary workers, want to be more engaged, they feel more valued, they feel more appreciated and as a byproduct of that, they'll be more productive, right? So by providing more productive resources to our employer clients how can we actually take better care of this community that we've nurtured as a talent community? And so we started adding fringe benefits and doing temporary employee appreciation. We used to call them Field Team; we didn't call them temps. We did all sorts of things to try to improve that experience. But what we found was this was costing us a lot more money to do it but employers didn't want to pay higher markups. So we were just basically sacrificing our profit margins. It wasn't actually multiplying profit margins, which I think is why a lot of recruiting and talent companies end up just doing things the way that they do them. I'm probably not the first person who's had that idea. So that first iteration of sort of inside the walls of the staffing company didn't pan out to democratize employment. So then I started dabbling in HR tech and thinking about ideas to really create better talent marketplaces. And so when the Uber of economy was in full throes in 2013 or something, we ideated this idea to build a marketplace for recruiters where they could even have a platform. So kind of like a real estate agent model where you've got like Keller Williams or REMAX providing the sort of roof and the infrastructure but then letting them keep most of the money that they make instead of the house taxing you so much like a traditional talent acquisition company might do.

Maren Kate
That’s really interesting. Our agency, Avra, we looked into doing that actually, pretty aggressively, I think last year or the year before, and at the end of the day maybe we didn't pursue it far enough but it didn't really fully pan out. So I’m curious…

John Paller
Well, I'd be happy to give me the learnings on that on a different call maybe because it's pretty nuanced. The things that we learned you wouldn't be able to learn unless you went full throes into it. You wouldn't even think that some of this would happen but, in retrospect, you look back and it makes perfect sense why it happened, why it fell apart, and why it wouldn't scale.

Maren Kate
And did you start a new business for this?

John Paller
It’s tangential to the core business. We started some new verticals. So we weren't doing it in our core verticals we were doing it for other verticals that we weren't in full time. And we found some pretty high-quality people to come over and start up these verticals but they had complete autonomy over their time, I mean, just like a real estate agent would. And again, there's some game design reasons why it wouldn't scale, and, again, I'd be happy to go through that at some other point but it was a really fascinating experiment. But what we realized was the TL;DR of it is democratizing recruiting wouldn't necessarily democratize employment.

Maren Kate
Hmm, yeah, I can totally see that. It's not necessarily…the two aren't in perfect alignment.

John Paller
No, because the incentives, the best interests, of the recruiting company or the professional isn't necessarily what's best for the talent. For example, recruiters are incentivized to put butts in chairs but that chair might not be the right chair for that person. But again, we have the conflict of interest that's baked into recruiting where we represent both sides. We would call that dual agency in the real estate world. So we do dual agency where you're representing the employer and the talent at the same time so you can kind of play both sides. There's a lot of people that do this. People end up with a lot of buyer's remorse because of this dynamic. In any case, we just didn't think it would scale. So in all of the research, weirdly, I ran into…so I was an early adopter of Etherium, largely because I was introduced to a guy by the name of Dimitri Buterin, who's Vitalik Buterin’s father in early 2014. Now, the Etherium wasn't even a thing yet in 2014.

Maren Kate
And for those people that are not up on their crypto…

John Paller
Etherium was invented by Vitalik Buterin. He was a student at the University of Waterloo in Canada, at the time, and dropped out to work on Etherium full time. He was also the editor of Bitcoin Magazine previously as a teenager. So he invented Etherium at 19. He doesn't like a lot of kudos and, sort of, blind accolades but he's become a friend and I trust him implicitly because his motives are pure. I mean, he doesn't care about just opportunism and making money. I mean, the next-generation smart contract platform that is Etherium has the potential to reorganize the way we do business commercially on a global scale. It will become the global settlement layer for financial transactions, in my opinion. It is that big of a deal. So my shameless plug for Etherium and, yeah, I'm part of the ecosystem. Disclaimer - yes, I hold ETHER.

Maren Kate
So you think buy on the downturn.

John Paller
Hell yes, I'll buy as much as I can all the way down because it's coming all the way back. It went down in March of 2020, right after the pandemic. Etherium went to $80. It's currently at $2,000+ still. This is not anywhere near blood in the ocean type of territory. Not even close. Okay, now, are we in a bear market? Yeah, I think we are. We go in cycles. I've seen several of these now since 2014. So it's eight years deep. I've seen three major cycles and I don't worry about it at all because I'm that convinced that this is the future. That decentralization, which is kind of codeword for democratization, but even better because it's structurally benevolent to independent users as well as a community. There's like this interesting game design element that has been able to merge what's good for the selfish individual and what's good for the community. That type of economic design hasn't happened previously. I mean, capitalism doesn't do that, communism doesn't do that, socialism doesn't need that. So this thing that we call Web3, which is a whole new vector of things, a new thing, we don't even really have a label for it yet, except for something like Web3, right? Some people call it crypto or blockchain but it doesn't really adequately describe what's possible with economic game designs and distribution and creation of value at scale. It's a paradigm shift probably in greater magnitude than electricity when it comes to economic impact.

Maren Kate
And so when you realize that when you learned about this and obviously got into the ecosystem, how did that then change the way you were thinking? How did that change the approach to this idea of democratizing the workplace?

John Paller
It's why I sold the business, my original business, my baby that I built for 15 years. It's why I sold it to the employees because they wanted to continue running it. It's now one of the largest woman-owned businesses in Colorado and they're doing great. They do a lot of the same best practices that we always did and they're doing really well. But they didn't catch the Web3 bug like I did and once you go down that rabbit hole, so to speak, far enough you can't unsee it. No judgment on what they're doing or what anybody else is doing. It's just I have a little bit of a futurism streak in me and I became convinced that the way that we were doing things I would never achieve the goal of democratizing employment so I had to exit. So once that happened I call that my red pill moment. That happened in 2016 officially.

Maren Kate
That’s what I was thinking when you said you can't unsee it. I was thinking of the red pill.

John Paller
So then I think it was an 18-month process to help the employees find a lender, we helped them get a 7(a) loan. We didn't want some private equity company to come in and screw it up. We wanted them to own it. It was really important for me to let the team own the business and so they did and they're still doing great. And then that exited me to a place where myself and the other investors that I've been working on with these other projects, a few of them came along, some of them got their money back, some of them we just sort of settled everything out, and we came along and we founded Opolis. At the time we were still trying to figure out product-market fit, and what the actual first product would be, like, how we would build this piece of tech. We originally started looking at a product called SmartOp, which was a smart contract opportunities platform. So think about like a next-generation job board where a project could fund an escrow account with a certain amount of crypto that somebody could provide a candidate for that job and if that candidate got the job, they would get that bounty that's sitting in that escrow account but it would all be smart contract-driven. So automated, so disintermediating recruiting companies, really futuristic stuff. There's a few different reasons why similar but different reasons why we thought there's some behavioral changes that you'd have to make to how corporations consume recruiting services that we just felt were too big for immediate consumption. There weren't enough crypto companies at the time to dogfood it. So we're like, okay, and then where it really struck us was the common thread of everybody who does work is employment and as I was unpacking the social design and really reviewing the Social Anthropology of the history of work it dawned on me that if we really want to cast this vision for, tongue in cheek, the future of work can we really build it on the history of work? Can we do it with a corporate employment structure where these corporations control your time, your day, and everything? And then you look at the Gen Z population who's already working, almost over half, independently already without even COVID. These are pre-COVID numbers, 53% was the last statistic I saw in 2019. So the Zoomers are already working independently over W2 jobs. Now, why is that? Well, it's because this hierarchical frame of employment isn't bringing people happiness and joy. They value freedom and flexibility nowadays more than any autonomy, more than the old school values of safety and security. It used to make a lot of sense and be pragmatic to go do your 30 years because then you got the golden social parachute, the social contract was different. There's no promise of any of that now. I can even speak from experience, my mom worked for the same company for 40 years and, I will tell you, she was one unhappy person. Now, she would say she was happy doing it but what she was really saying was it was comfortable. But people today, especially the younger generations coming up, they're gonna value that autonomy, freedom, and flexibility way more than they value that safety and security component.

Maren Kate
Absolutely, I totally agree.

John Paller
But then you look at how we do things, whether it's talent acquisition, procurement platforms, HR tech, it's all geared towards corporate consumption. It's all a B2B model. So if we're really going to trend which, again, the estimate is that 90 million people by 2028 will be working independently full time, we don't build tools, ecosystems, and platforms for independence. What about health care for an independent worker? How are you going to solve that? About retirement plans, portability of employment and benefits? How do you do all that and do it compliantly without handing somebody a poop sandwich of risk? Because that's the problem with employer of record plays. They get really risky especially when you're doing it entirely centralized and then their margins are bad. So how do you create a high margin scalable ecosystem that's two things, benevolent to the member or the user, the independent contractor, sustainably over time, so structurally benevolent and, two, one that is economically viable at scale. Meaning that there's real value to be accrued and real value to be built, not a not-for-profit or foundation kind of thing, but something that has real incentive to build better, like, a next generation capitalistic model. How do you build that?

Maren Kate
So tell us. So what did you land on?

John Paller
Well, that's what we did. So Opolis is the culmination of about two and a half years of legal research. Took me another six or nine months to write the white paper, which came out in July of 2019. We launched the public beta product in the late fall of 2020. And last year we grew over 1,000% from our initial cohort so we now we W2 almost $40 million a year in payroll for people working independently in 37 states.

Maren Kate
So what does that look like from the boots on the ground standpoint? If you're explaining this to a 10-year-old, what would that look like for this independent worker? I mean, because we have it at Avra. We have a lot of ICs that work for us in different arenas and so I'm curious, if you're talking to an individual, how does it look for them?

John Paller
So think about what employment looks like, right. You've got your W2 check, your semi-monthly payroll first and third Fridays, you've got your retirement plans, your long term and short term disability, your workman's comp, all of that stuff, right. So you've got a dashboard that gives you all your data, your information, your historical documents, and then the only trick is, though, your W2ing yourself because of the way that we have the legal compliance mechanism set up. We've set it up in a way that they can take responsibility for their own employment without giving up their independence. But because we're an employment DAO, a digital employment cooperative, we're using a cooperative as a PEO, decentralized employment organization, DEO, but it's a next-generation version of that, but the functionality is the same. So they're getting a W2 essentially from their entity. Let's say they're working for Avra as an IC, you're not taking any W2 responsibility for them but they are W2ing themselves. So now instead of ICing for you, you have a corp to corp relationship that basically has an SOW that states what they need to do and when they need to do it, but you're just paying their business now as a business and then they payroll themselves. So if they stop working with Avra and they go on to the next thing they don't lose their health care. It's totally portable to them.

Maren Kate
Got it. Got it. Now, are there any limitations? Is there a certain amount that you have to be working for the way all this works right now? What does that look like today?

John Paller
Yeah, so they have to meet the FLSA minimum standard of an exempt employee in the state that they're in. So every state has a different…

Maren Kate
Like its 36 grand in Texas, I think.

John Paller
Right. So in Wyoming it's 32, in North Dakota it's 28, in California, it's 68ish, right.

Maren Kate
Right. But does it matter how one is meeting that? Like if you're working for several…

John Paller
No. No. So if you think about it their business entity is the one doing the business commercially so they're issuing invoices and collecting revenue. So let's say the total receipts of revenue is $120,000 a year for six clients, well, they have one employee on the books, which is them, and they're paying themselves 80 grand a year, which leaves them some owner distribution, K1 draw that they can take later, they can cover other expenses, they can even play some fairly creative accounting games with a Scorp election, that actually helps them save money as compared to a sole proprietor. So there's a lot of benefits to doing this. And it doesn't matter, you can have one revenue source or 50, it literally doesn't matter. The income flows to one entity and then your paycheck comes from that entity. So as long as that entity continues to have funds to pay your payroll, which means you just have to continue to keep working but your incentive is baked in because I want to keep my healthcare, I want to keep my 401k going, I want to keep all of this. So it's good game design for creating the right incentives for ICs.

Maren Kate
It really is and I think just psychologically thinking of yourself as a business entity versus an independent contractor, it puts you in a different headspace too.

John Paller
Correct. Well, this is the migration to what I call mutualistic employment relationships. So if you think about just the legal design, the hierarchical nature of paternalistic employment systems, so think about Corporation is the parent and the employee is the child right. We are subordinate to the corporation. Well, when you move to this sort of an IC is still very subordinate, right, you're just not W2ing them. But if you wrap them in a legal entity now it's Corp to Corp and now it's just like a consulting arrangement where it's more mutualistic and it's not subjugation based. It's much more productivity-based. Now you can actually architect your agreements to be much more outcomes-based versus just time. Much more results-based versus just time and attendance space. There's no correlation between time and attendance to productivity. I am convinced of that, after having W2ing over 40,000 people in 15 years in 42 states, I'm just convinced that there's no correlation.

Maren Kate
Absolutely. I mean, it really does. Different people work in different ways and people are productive at different times with different setups. At the end of the day, if someone's doing the work that you as a company want it done, and they're doing it on time, and hitting or exceeding their goals whether they worked an hour it shouldn't matter. It shouldn’t where they work. It shouldn't matter how they work. Granted, that takes companies defining what results are and that's part of the problem.

John Paller
Objective standards of success, yep.

Maren Kate
Exactly. But I think it at the highest level that is true and that's a great way to motivate people. So I love the idea. I love what it does for the worker, the independent worker. I'm curious, what is the business model? What is the business model look for Opolis the company? What is success for you all?

John Paller
So what we did was we designed an economic game that incentivizes Opolis as an organization and as a community to want the same thing. Value accrual. This is based on payroll growth in the ecosystem so payroll volume. So the more members we have, the more people we have, we call them employee members, running their payroll, consuming their healthcare, running their 401k's, getting their W2, the more payroll volume we run. So the more payroll volume we were run there's a consumption fee of 1% that people pay every payroll cycle. So there's no subscription.

Maren Kate
And they're paying that to the company.

John Paller
To Opolis. They’re paying it to the community. The community is also community-owned. It's a Limited Cooperative Association out of Colorado. So think about it like REMAX or not REMAX, like REI for employment. So if I go to REI and I buy a bunch of skis and camping equipment at the end of the year they're going to send me what's called a patronage check, which is a distribution of profits based on my pro-rata consumption in the company. Now there's an incentive, the more I consume, the more profits I share. We've created that same model using a community token called the WORK token. Now, I'm not going to get into the token economics and the mechanics of the WORK token today because it's too new but if you want a high level I can do it. But basically, what it is it's a rewards program similar to what you would see for like airline miles or hotel rewards or whatever but it's for running your payroll. But instead of just being a point or something that I can cash in somewhere it's actually the unit of account that we use in the community to determine how much of the profits you get at scale. So early adopters are getting more of these WORK tokens today than there'll be getting two years from now. There's a diminishing amount. So there's an incentive for early adoption because they're just stacking these tokens. But at scale, there's going to be more profits so they will get more. So they get in early, they profit more later on but in the game design of things the members are core stakeholders in this ecosystem. It's not dissimilar than if you imagine Airbnb hosts or Uber drivers were being given these types of tokens for doing rides and hosting people. We're doing a whole new economic game design. So it turns the tables on the whole corporate model of how value is created, how it's accrued, how it's distributed, who owns it. And we've redesigned the whole game so that the community has now incentive to build itself. Because if you refer your friends, I'm now making consumption rewards on my friend's consumption too in perpetuity in addition to my own and they get it too so everyone's getting it. It's not like they're not getting it for being referred. They get it for their consumption. But then you can multiply what you're receiving by bringing more people because, again, what's good for the goose is good for the gander. What's good for the selfish individual is now what's good for the community. This is not a paradigm that you see in traditional corporate models.

Maren Kate
No, no, not at all. I mean, you are right, the closest corollary would be an REI or CoOp or something like that.

John Paller
Credit Union or something. Bcorps don't even quite get there. Like I said, we did like two years of legal research.

Maren Kate
And you say “we”, what is the founding team look like?

John Paller
So there was a core group of people that came with me out of the Lakeshore sale. Eddie Pastore is my co-founder of Opolis. There's some legal folks. One of the Board of Stewards of Opolis, her name is Yev Muchnik, she's a well respected, super smart attorney here in Colorado, does a lot of blockchain industry stuff. We did a whole bunch of research on using cooperatives for this type of community ownership and now she actually travels and speaks on that. We actually coauthored the whole model and she has more time to go travel and talk about it than I do, well, at least it seems like she has more time but she's great. And then there's a couple of other folks, a couple of our operational team, that came along Will Morgan's one of our Finance Stewards. So we all basically, I mean, it literally took almost two years just to get a beat on what we wanted to do because we had to get under the hood of all the regulatory requirements and all the just different statutes and the statutory filings and what are the reporting requirements, and how does ownership work and trying to match up to the old with the new, right, because we were really green fielding in this space that nobody had done before. So we're like, okay, so it took a long time to figure it out.

Maren Kate
And now that you've been around for over four years, right?

John Paller
We've been around almost five, so 2007, almost five, so four and a half.

Maren Kate
Okay, so now that you're almost at your fifth here I have two questions. First, what do you think is the biggest challenge you'll face in the next call it 24 months?

John Paller
Good question. I do think that the future of work is going to take a lot more education than I think anybody is prepared for. Let me give you an example why. There are those people who choose to be independent contractors because they want it. They want the independence, they're very resourceful, they're entrepreneurs, they're innovators, they're learners. But when you really look at the breakdown of the labor force, there's not that many people who are really high functioning independent contractors. There's just not. And a lot of them aren't professionalized, especially the younger ones. They're just out there floating around as ICs using their social security number, they have no entity, they have no risk management, they have nothing. They're just doing their thing living their life and so what we found is there's an education gap. That empowering and equipping individuals to understand how to best set themselves up for success and even educate them on possibilities is a big push. It's not just like here's Netflix and I can stream it for 10 bucks a month. We're talking about the Holy of Holies of a person's commercial experience, it's payroll, their paychecks, and their health care. These are big decisions that have wide implications and it's pretty scary for somebody who's been sitting in a W2 job for 15 years looking to make that leap. So I think the next 24 months, our biggest…we don't have any questions around product-market fit. There's so many nuances to what we do and how we've learned it over many, many years. We have a huge head start and I do not envy anybody who wants to try to come in our path and copy this. It's so tough. But that said, just because we have a head start, just because we feel good about where we are doesn't mean that scaling the community isn’t going to be difficult but it's not going to be because they don't want the product. It's going to be because they don't know what they don't know.

Maren Kate
Or they don't even realize it's an option.

John Paller
Exactly. They've been so conditioned to just get a W2 at the end of the year and fill out a 1040EZ. That's how much the government thinks of the sophistication of the average worker. But if you want to be independent, now, all of a sudden you've got to take on responsibility for all this other stuff and it's like, “whoa, wait a minute” and it can be incredibly stressful. So I think building the resources, and educational materials, and community support functions, even cross-pollinating IC to IC, helping our community help our community, incentivizing. We have a program that's going to be launching called our Community Ambassadors Program, which is really incentivizing, through additional WORK rewards, the onboarding and education of new members. Well, why do I want to scale some big bureaucratic team to do this when I can just get our community to do it who's consuming the product?

Maren Kate
Yeah, I think that makes a lot of sense and you think about how a lot… I mean, it's funny, it's like, even though it is a future of work product and company and space, I assume, in some ways, a lot of the way you're thinking is how you would educate consumers. It's like how I heard about Uber. I heard about it through friends when I was in San Francisco and it was just coming up and then I told people. Even though it's business and work and employment, it still feels like a lot of….

John Paller
Consumer-ish. Yeah, it's very consumer-ish type of behavior. It's not procurement, and HR, and contracts, and big long lunches and meals at fancy restaurants. I mean, this is your friends, tell your friends, tell your friends. I mean, in a business of one there is no HR department. At best you've got a CPA, who somebody’s hired to do their accounting and that's about all you ever deal with. But this is a B2C. Think about it like this, in traditional taxonomy, it's a B2C PEO. That's what it is. Now, under the hood of that, it doesn't look anything like what a traditional PEO would look like because the sales channels are different, the community is different, the incentives are different, the client’s different, everything's different but the function is the same.

Maren Kate
I mean, I'm super excited. I'm really excited to actually have my team share this with our independent contractors because this is something that we've actually looked into and thought about a lot. There are businesses that just work better with independent contractors but often, as the business owner, you really want to make sure your people are able to make those good decisions around benefits, are going to be covered with savings, and whether it's a 401k or something else. So I'm super excited to share this with our team as well. And then I guess my last question is just in terms of thinking about that education, do you think it's going to wind up being more educating the younger generations of workers and then this becomes more of the norm versus trying to tackle all workers and all spaces? I almost wonder if you've had 20 years of getting a W2, obviously, some people will be able to understand and get it, but it almost seems like it's such a…

John Paller
There's an emotional attachment to that. Yeah, it's a big change. So I do think that the target audience for this is going to be those north of 26 years old but south of 45.

Maren Kate
So millennials

John Paller
So millennials. Gen Z millennials are going to be the ones that we target. Will there be people that come along that want this? Yeah, of course, I mean, every cohort of workers is going to have a certain risk-tolerant population that's going to be totally willing to do it. I mean, what's interesting is I think the risks of being in a W2 job are just as high. The only risk, most states are at-will now, like, you can be fired at any time, with or without notice, with or without cause so what's the actual real full-time job status anymore for anybody. Pandemics come and boom people just get torpedoed.

Maren Kate
I mean, some people would say it's potentially, I mean, I would say that in the next 20 years I think it will be far riskier to be completely reliant on one W2 income versus being diversified, and at the end of the day, you're the one that's making sure the insurance is covered.

John Paller
You are way ahead of the curve on some of this stuff compared to most of the podcast hosts I talked to. So yes, yes, you are correct. So think about it from a risk management standpoint. So what you're saying is, employees are going to have the option to risk manage their work portfolio. It will be commonplace, it will be common in the future. Whereas now, you're expected to put all your eggs in one basket.

Maren Kate
And not even a basket that you control.

John Paller
You don't even control the basket. You can literally show up one day, get your pink slip, and be gone and that's it. And you lose your healthcare, you lose your retirement, you lose all the quote perceived safety and security functions that you thought you had. It's gone. This way, the way that Opolis has mapped this out, so even organizations like Avra, who take on a large risk around employment, well, if you could just plug everybody in and not have to take any of that risk and you could still traffic all these brokerage fees, wouldn't that be a better place to be?

Maren Kate
Oh, yeah, I mean, for businesses you think about the payroll tax, it's pretty much 30 cents on the dollar, for companies.

John Paller
Yeah, I know. I mean, I ran a big company for a long time and when we get squeezed on margins like that sometimes we took contracts just to cash flow games because we weren't making any money. It was just building cash flow.

Maren Kate
The thing I like about this model, in general, is that at the end of the day the incentives are aligned. And one of the things, if you look at the last maybe 50 years of employment, it seems like incentives have continued to diverge. Well, John, it's been so great chatting with you, thank you for coming on and sharing your story and telling us about Opolis. I have one last question that I always love to ask, what is your favorite podcast or book that you've read or listened to in the last six months?

John Paller
So I'm gonna show my friends over at Bankless, it's a podcast that is well suited for people who are curious about this sort of Web3, future blockchain tag, crypto. They're really smart guys. I've known David since September 2018 when he had his rabbit hole moment. So I've known him since the beginning of the Bankless podcast. It's now grown to be one of the biggest podcasts, if not the biggest, in the crypto space and they have a DAO community, they have all sorts of really interesting things. Their podcast is why I like it is because it's accessible. They ask questions that regular people can understand. They don't get too caught up in technical jargon. They really are good at unpacking current events and making somewhat difficult concepts easy to understand. So if you're what I would consider like a crypto curious type, you're kind of looking over “I keep hearing about this, what is this?”, it's a great podcast as a primer and they've got just a ton of really great content that's out there for free. So that's who I'd recommend.

Maren Kate
Awesome. I love it. And then how can people find more about you and about Opolis online?

John Paller
So we live on Twitter. My handle is @PallerJohn and Opolis is @opolis. You can also go to our website at opolis.co O-P-O-L-I-S dot co. No M on the end just CO. There's links to our Discord server there, there's links to other social things, you can get information on some of the more technical stuff. There's a section on our website called nerd stuff that has our off-white paper and our token economics paper. You can also book a call to talk to one of our membership stewards, get some more questions answered. You can DM us on Twitter, we're always very attentive there. In fact, a lot of our members come through Twitter because there's a whole subset to Twitter called Crypto Twitter, which we're pretty involved in. So that's probably the best places.

Maren Kate
Awesome. Well, thank you again.

John Paller
My pleasure.