Work in the Peer-to-Peer Economy: An Interview with Colony


Organisations all around the world are recognizing the limitations existing management structure. Once upon a time, it made sense. People had specific, discrete skills for a specific job and the world moved slowly. The hierarchy worked well. Now, however, people have diverse skills and the market moves so fast that companies relying on past-model hierarchies are not able to keep up.

The blockchain, a powerful peer-to-peer (P2P) technology that enables decentralized applications, is now offering ways to solve this issue. By building a variety of new technologies on the blockchain, companies are beginning to disrupt the way management works. They are implementing new and innovative forms of business administration that don’t use the traditional hierarchical method of organisation, while experimenting with previously impossible forms of corporate governance.

Traditionally, hierarchy has been the main model of governance in human organizations, but now a new paradigm shift is about to change the way division of labour is implemented, and most importantly, the way several parties can cooperate and still be driven by individual interests. With the possibility of introducing P2P distributed applications to the corporate world, a new form of organization is starting to emerge.

Blockchain technology has brought us a new concept of organization: the Decentralized Autonomous Organization (DAO). With the introduction of this new concept, a new revolution in the structure of work is about to begin.

Colony is a platform for Decentralized Autonomous Organizations. The goal is to make it easy for individuals all over the world to build companies and organisations together online and to allow them to conglomerate in a decentralized manner to effectively solve problems without the need of a chain of command. Colony makes efficient distributed organisations possible by removing the need for hierarchical management. Colony’s mission is to make it faster and easier than ever for people to build decentralised corporations. It is a social collaboration platform for distributed organisations built on top of the Ethereum Blockchain where users can start projects online and build a workforce to help make those projects a reality.

The platform incentivises users to compete to be the most skilled and productive workers by “distributing ownership in proportion to the value of each user’s contribution.” Colony automates the administration process and totals the insight of the workforce by recommending, deciding, and appointing assignments to the best possible candidates, while delivering feedback on participants’ work.

At Consensus 2016, held in New York at the beginning of May, Colony unanimously impressed the panel of VC judges and walked away with the top prize at the Proof of Work startup showcase competition. BTCMANAGER spoke with Collin Vine and Jack du Rose about their vision and plans for Colony and about the new economy of work.

Colony recognizes that talent and proficiency is highly distributed, yet opportunity is highly centralized, and presents a model solution for those wanting to work for themselves. Many people would like to start or work on startups, and though now this is becoming easier than ever, there are still significant barriers to entry. Consequently, the passion, talent, and energy these people might otherwise commit to commercial projects are often channeled into online communities, free open-source software projects and other hobbies.

At Consensus 2016, held in New York at the beginning of May, Colony unanimously impressed the panel of VC judges and walked away with the top prize at the Proof of Work startup showcase competition. BTCMANAGER spoke with Collin Vine and Jack du Rose about their vision and plans for Colony and about the new economy of work.

Both Vine and du Rose have a history of managing distributed teams of workers in previous businesses. Vine’s company, Zirtual, had over 450 remote workers on flexible schedules.

“I came to believe that work was something you did, not somewhere you went. Remote work is only the beginning of the future of work,” said Vine. He listed other trends, such as the gig-economy, an increase in freelancers, the global workforce, artificial intelligence and automation, and platforms like Colony.

Jack du Rose was also inspired to create Colony based on past experiences in managing a distributed team. “ It felt ridiculous that we had all these great tools for communication, but the actual management of the team really hadn’t changed,” said du Rose. “It still required a ton of manual coordination and tedious admin.”

Du Rose commented on some of frustrations he experienced when the goals and incentives of his suppliers were misaligned with his company’s overall goals. “ Where we were looking to build long term value, they were looking to maximise short term gains. The relationships were perfunctory and often frustrating.

“On the other hand, we had people who effectively became stakeholders in the success of the company. The relationships we had with them were hugely more fulfilling and successful because they really cared. It was something that mattered to them and where the more successful the company was, the more successful they as individuals were.”

Thus, Vine and du Rose set out to accomplish two goals: first, to use software to reduce the burden of management and administration, and second, to design an organisation which aligns the incentives of its workforce.

Du Rose pointed out some of the pain points associated with current job platform models. “They are slow to use (think finding the right people), they are purely transactional (so it’s relatively hard to form long term relationships with people), they don’t allow you to coordinate multiple people at a time.”

He emphasized, however, that it would be wrong to think of Colony as a job platform, per se.

It’s not [a job platform]. It’s the platform for internet organisations — it allows people all over the world to build organisations together online.

Another issue with current models that Vine discussed in his pitch presentation at Consensus was the “race to the bottom” that exists in today’s freelancer space. Du Rose explained what this means for both companies and workers.

“It essentially means that most crowdsourcing platforms inevitably lead to price competition, and usually lowest price wins, so people race to undercut one another as they try to win contracts. Price competition is not typically a route to high quality, so the platforms where price is a key factor tend not to attract the best talent.”

Colony is not about price, it’s about rightness of fit — choosing the right person for the job. Sometimes that’s someone cheaper, sometimes its someone more expensive, and Colony contains mechanisms which help to ensure the right person for the job gets selected.

Benefits for workers (besides not having to commute…)

For independent contractors and freelance workers, one drawback is the lack of benefits that make of a typical compensation package for regular, full-time employees.

“I don’t necessarily think that a DAO will provide benefits like health insurance and pensions,” said du Rose, adding that he thought it could be possible for a DAO to emerge which provided smart contracts to allow a proportion of a person’s earnings to go towards policies for those.

What Colony does do, however, is to provide a way for independent workers to generate real long term value for themselves in the form of ownership of the projects they work for,” he said. “Instead of the current paradigm of hours worked = income, with Colony, independent workers will be able to earn assets which provide them with long term passive income too.

Decentralizing the process of hiring and being hired

Colony aims to have a marketplace for employers to find workers, but this marketplace will be an “emergent consequence of the platform

much as there are sites which allow for discovery of Slack communities,” says du Rose.

“Our initial beachhead are digital agencies — companies who typically engage with lots of freelance talent and would like to be able to open up their organisation a little bit, without losing control of their projects. Beyond that, as the functionality we are building gets deployed, we’ll see more and more decentralised organisations wherein there is no central point of control.”

So far, the response to Colony has been very positive. Within 5 days of putting out an intake form on the site’s private beta, they received approximately 500 applications.

“The interesting thing was that the vast majority of them had no idea about blockchain,” said du Rose.

To us, that’s crucial — we don’t think the end user should need to know blockchain technology is under the hood any more than they know Facebook uses a MySQL database.

As the digital economy increases and as technology brings the global community closer together, creating international work cultures that transcend borders and time zones is becoming more and more the norm. The impact of platforms like Colony to enable a decentralized, global work environment goes beyond mere corporate economics.

Vine sees the social impact of Colony extending to remedying issues of wealth inequality, while also enabling workers to become owners.

As for du Rose, “I’d love for Colony to catalyse an explosion of innovation by enabling people to work together who wouldn’t otherwise have been able to do so.”