In 2018, over 70 million people considered themselves to be part of the sharing economy, an economy fueled by on-demand work and flexibility. Workers in the sharing economy value what kinds of jobs they can work and when they can work them. Still considered a nascent industry, the sharing economy has expanded to include remote and digital employees that often have multiple sources of income and can work independent of a specific location.
It should be of no surprise then that the blockchain industry’s intense focus on decentralization has spun out hundreds of fully-remote teams and piggy-backed off of a generation that prefers new and creative ways to work with new organizational structures.
An innovative blockchain startup called GZH Blockchain is doing just this, but taking it to the next level. GZH essentially wants to strip employees from organizations using an innovative approach to outsourcing called a zero-employee organization. With no management in place, startups in GZH’s decentralized Y Combinator- like model can have access to top talent when they need them, removing inefficiencies that may be present during a company’s scaling process. To date, they have proven the model to be ultra efficient with over 20 startups that are now fully operational.
To learn more about GZH’s vision and how blockchain plays a role in their model, GZH’s Senior Partner Dusan Nesic explains the company’s inspiration, vision, and what they want to accomplish moving into 2019.
You and your team have proposed a methodology called “zero-employee” to reform the traditional hierarchy based company structure. What does “zero-employee” mean?
“Yes we have, and rather successfully I would hazard to say. To explain “zero-employee”, I would like to first start with a new example in organizational management. In California, there is a food processing company called Morning Star. The way they work is quite self-organized and decentralized. They do not have a management team or even a CEO. Consensuses are reached between colleagues, while everyone is just their own manager and at the same time, employee. It is really groundbreaking to think they have managed to achieve double-digit growth every year in the past 20 years, without a traditional hierarchy or management team”.
That’s impressive but employees are still employed. They work for the company so what does “ZERO” imply in this case?
“Indeed. The concept of “zero-employee” is quite similar to a self-organized structure. However, what we are practicing is a little bit diﬀerent. We used Morning Star’s general concept of self-management and a decentralized structure. Where we differentiate is the decentralized groups we “hire” will only be utilized when we need them and when there are jobs for them. When there are no jobs, they are not being managed by us and are technically not our employees. Most of them are freelancers or have other full-time jobs. They are sort of like employees in the clouds. Like water, for a better metaphor, it flows to fill the container, adjusting in size and shape. We have no employees, but when there is a job that needs to be done, we will have the expanding team do it. That’s why we also name this structure a “liquid organization”.
This seems similar to short-term outsourcing, is that correct?
“Good question. The diﬀerence between “zero-employee” and a traditional “outsourced” employee is quite simple: we do not pay money. Instead, we reward people with blockchain tokens as their “proof of work”. So after what people have done for us, the real reward they get can be 0, or significantly more than they should be paid to, but with the free market, supply and demand at work, they will be simply paid appropriately to the size of their contributions. The value of the token in exchange increases and decreases. The blockchain technology makes it all possible”.
What makes tokens more favorable than money in this case?
“Two reasons. First, sometimes your contribution to the company cannot be valued by legal tender. For example, if I connect you with a very important person who eventually helps your business, how much would you reward me? Money can buy almost everything but there are still some areas where legal tender does not suffice. You reward them with tokens simply because a token is not money per se. The “price” changes all the time and it is directly related to your contribution. Second, if a person trusts you and your company and would like to invest in it, the traditional way is to either buy equity or apply to be your full-time employee. We think both ways are too binding. There is a smarter and more eﬃcient way. By receiving tokens they automatically share in the benefits of the growth of your company. This is a better option for those who have an entrepreneurial spirit, are willing to take risks and trust the company, and want to grow with it. It is also good as it motivates them to help truly, fully and in the long term”.
This sounds logical and reasonable. Have you proven this model yet?
“Yes, we are practicing our “zero-employee” methodology in over 20 startups which are in the seed round. As you can imagine, early-stage startups are more willing to adopt this. All of these startups do not have any employees at all. One of them served 800 customers a year, led by the founder himself and his liquid-like teams. These 20 startups are in all kinds of industries, examples include: a startup hub to help foreign startups match with local partners, an AI passenger flow data company, a software developer community that acts as your tech partner, a fencing community, a community to monitor supply chain EHS risks, and even a children’s education facility”.
What is the benefit of using blockchain technology within GZH?
“Thanks to Satoshi Nakamoto, we live in a great time. What we provide is a consortium blockchain which serves as the “operation system” of our zero-employee model. A startup can issue tokens on the GZH blockchain and make them exchangeable with the GZH token which is listed on UTEX exchange. This provides liquidity for those needing it immediately.
We also provide an interface for users to upload their income transactions. Blockchain technology makes sure these are immutable, meaning not even the founder can modify this transaction data. By using this feature, liquid-like teams are ensured that their tokens can be a proof of state subject to end of year dividends depending on annual income. Any team that understands blockchain will trust you naturally. Like we like to preach, the code is the law here.
Lastly, we created something new called “Medals” which can be transferred by the founders. Medals and tokens can be rewarded at the same time. The Medals are not tokens but a weight of the tokens. For example, if you get a 2.5 Medal, all the tokens you receive will be 2.5 times more than someone who does not have any Medals. This way the founder has more leverage to reward people who contributed more, other than just give them more tokens”.
Who do you anticipate being your biggest target market?
“Startups are more willing to use this in general, but if any traditional company wants to test the model, we oﬀer consultation to help companies reorganize. We do believe that “self-management” and decentralized liquid organizations are the future. What we are doing is a revolution to the traditional hierarchy organization structure. We have heard of a lot of cases that with the expansion of an enterprise, the overall creative and production capabilities decrease. What we are trying to solve is this major problem that will only increase as the world becomes a big unified market. We believe that problems of the future need solutions of the future, and blockchain and advanced management techniques fit the bill”.