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Bloomberg Bulgaria invited the co-founder and Chairman of the Comrade Cooperative, Todor Kolev, to talk about the two main projects the coop is working on:

  • Wetonomy – our system for Decentralized Governance of Organizations –
  • ScyNet – Autonomous Infrastructure for Training AI –

The video is with English subtitles, and there is also a transcript of the interview below. Credit: link to the original source of the video on Bloomberg TV.

This is Business Meeting. I’m Tanya Krasteva. In this program, we show you the faces of the Bulgarian business. We talk about the challenges they face and what inspires them to move forward. Today we meet with Todor Kolev. He owns the software company “Obecto”. Hello!

Before we start the conversation, let’s see a short presentation about you.

“Todor Kolev is the founder of the software studio “Obecto” and Chairman of the digital cooperative “Comrade”. He has more than years of experience in the software industry. He wrote his first computer program at the age of. Todor graduated the National High School of Mathematics and Natural Sciences. He graduated the Faculty of Informatics at the Sofia University “St. Kliment Ohridski “.

Mr Kolev, how did you come up with the idea of starting “Obecto”?

Well, I was a software developer before I founded “Obecto”. I was working in a similar company. It was a long time ago. About 10 years ago. Working in this other company, I realized there were a lot of problems in how it operated. I saw that the employees were a resource that was simply outsourced for profit. I decided to try and create a new company.

It would focus more on people’s happiness rather than just profits. We were trying to make the best company a person can work in. The ideal place for a software developer. Of course, we went through many iterations over the years.

How does the ideal place for a developer look like? What should it be?

Let’s put it this way. The ideal place for a developer is where he would feel like the creator he actually is. If we look at our profession from a historical perspective, we were equated to the ancient transcribers. As the Pharaohs once had transcribers who could write. The pharaoh ordered his transcribers to write, and so they did. Those are actually the roots of our profession.

In the early 70s, 80s when the first programmers appeared as a profession, they were basically transcribing in code what the business needed. But in the last – years, we are starting to see a change in this paradigm. Developers are beginning to realize that today, the whole world is dependant on software. We can not do almost anything without software.

We can not go into the car, the store, buy something or cook it, even wash the dishes without depending on the software. The dishwasher depends on software, the microwave, the car, the store. In fact, the whole world is becoming dependant on software on a much larger scale. In this new world we the programmers want to feel more like the creators we are.

All the good programmers started out very young. They started because they wanted to create something. Meanwhile, they have learned to code well enough to become some transcribers in a company later. I think though, the true nature of the programmer is to be a creator. They need the opportunity to become one.

Which, of course, depends on having an adequate business model which can fit into the current economic system. This is a complex task, of course. But I think such is the ideal place for a developer to create.

To create?

To create anything, they can. People often ask me “I want to become a programmer. Which coding language should I learn?” I tell them: “You need to understand that you are in fact, a creator. You can build anything you decide to.”

Can you create your own language?

Yes, but the creation of a language is a task without a goal in mind. There is always a better language emerging. What matters is the goal you want to accomplish with your code. The language you use is just means of achieving this goal.

Do you manage to keep people motivated in the company? Is personal freedom what motivates them?

Freedom is a very important element indeed. But not everything. Most companies look at people as a human resource, wondering how to keep it motivated. For that resource to be more effective at work.

But as Adam Smith proposed, the slave labour ends up being more expensive than the one done by free people. Because slaves are not motivated to become better, more effective. They work because they are forced to. So as long as you view people as a resource, not a human being first, you can not expect them to be very useful.

Furthermore, many professions will soon be automated. In the next years, our phones will become smarter than people. Which means that many jobs, limited to performing rules in a very narrow niche, will be replaced by this cheaper, automated resource. So people will no longer Have to work. They will realize their creative freedom.

I often make presentations about the future of work. In them I have this exciting slide, saying “What will you do if you didn’t have to do anything?” What will you do if you were not forced to work?

In our company, people are very motivated. In “Obecto” as a company and “Comrade” as a cooperative, we actually have a queue of people who want to join us. It is just a matter of creating the process to allow for that. But the point is that we have this interest. Not because we find ways to motivate human resources, but because we treat these people as human beings first. We allow them to give their best.

You also have an impressive view of the lack of employees?

In the IT sector?

In the economy and the IT sector.

Well, there are plenty of people. But there aren’t enough employees. I’m talking to many young people. Around -year-old, the so-called millennials. Who has a very different type of expectations about work. They all share their dissatisfaction with their work.

Recently, I spoke with several people who said: “I work in a nice company, with nice colleagues, I make good money, but I do not feel ok. I do not feel like I am creating something for myself. I feel like a tiny part of a very long process. I find no meaning in my work.”

So in summary, the talent is there. But the problem is that a lot of them, especially the good ones, are leaving the industry. The so-called business which they see as kind of a production line. They are trying to find their luck with startups.

Startups are another exciting topic, which I also see as a dead-end street. We’ve seen the proof for this in recent years. The current efficiency of startups is around 1%. If today someone says I am creating a startup, and even has the team, the idea and knows what he’s doing, his chance to actually succeed, meaning to manage to sell their company, is about 1% percent even less. I.e. this is a highly inefficient system.

I’ll take you a step back to the topic of people. Do you think people are ready to take responsibility for their work?

The problem with responsibility is a massive one in the existing system. From the public sector to even how a business operates. Because the industry is structured very hierarchically. In companies, we have the people who work. Above them, there are managers, which in turn have their own managers, and so forth until we reach the parent company. In it, there is also a big ladder of managers. So we’ve created this perpetual, upward transfer of responsibility.

So for 90% of the people who work at the first layer of a company, there is no responsibility. The only kind of trust they have is to avoid being punished. If you fail, there is a corresponding penalty. To me, responsibility equals ownership.

In English, these words have a very similar meaning. So when you do not feel like an owner of the things you work for, you can not feel the same level of responsibility. And ownership does not have to be a legal property. Instead of the ability to have influence over what you work for.

You mentioned the “Comrade Cooperative”. Can you tell us more about it? What is its purpose?

Yes, “Comrade” is a cooperative of developers…

Not from startups?

We are jokingly calling it a cooperatively owned digital farm. But, in short, what is the idea? We are a group of currently around 50 people. About 20 of them actively working daily.

I call it a group of innovation builders. People who are building innovations. The software developers are just a part of those builders. But, there are also marketing and design specialists who also contribute to what we do as a group.

Our first goal is to create several infrastructure projects. We believe them to be an essential part of the future development of the world. That is, a world without this infrastructure, will not be able to transition to the next step. Whether these project will be completed by another team or by us is not so important. There are several teams around the world currently working on similar projects. We just want to be among the first completing these projects.

And since these projects are infrastructural, it does not make sense for them to be owned by a single entity. Because if they were, someone would soon try to compete with this someone.

And this is the infrastructure of what exactly?

There are two projects. The first one is called “Wetonomy”, which is a new model for cooperation based on smart contracts. These blockchain smart contracts allow a group of people to build a decentralized, autonomous organization (DAO).

The decentralized autonomous organization is not owned by anyone. It is self-owned and decentralized. In the sense that there is no single participant who can push the system in the wrong direction. The system does not depend on an only person. This is “Wetonomy”, a model allowing for cooperatively-owned organizations such as ours.

It is also interesting that this model can be applied to any existing company. Every company that has employees and those employees should somehow be motivated…Going back to the subject of motivation.

Through this model, people can have more ownership of a company and consequently – responsibility.

Can they be part of the decision making?

Yes. Wetonomy can be applied as a bonus system in any company. A company can decide that 5% of its profits would go to an internal Wetonomy instance. Than this Wetonomy acts as a motivator for the people who work there. These people then evaluate each other’s work. Without a boss. They choose and estimate their own tasks to maximize this percentage of the company’s profits,.In short, this is Wetonomy.

The second project is even more enjoyable. While “Wetonomy” allows us to create autonomous organizations and teams, the other plan provides for the creation of a free product. A product that is self-owned. A product that does not have a shutdown button. A product that just exists.

The analogy for this project comes from the famous movie “The Terminator”. In it, the central computer was called “Skynet”. “Skynet” is actually an artificial intelligence machine with no shutdown button.

This sounds pretty frightening.

Yes, but that is what we are building. It sounds a bit like science fiction, but the modern technology allows for it. The progress of the blockchain allowing for autonomous systems and the advancement of AI which allows for an AI trained by an AI. We just combine these two technologies in one place.

Why is it necessary to create such a thing?

Yes, this is a good question. We jokingly say that we are trying to save the world. So, why is it necessary.

Because Google last year created the so-called AutoML. This is a meta-heuristic algorithm, which is an AI that creates another AI. This particular AI creates a better artificial intelligence than the best human researchers, trying to achieve the same results. This is something that, given enough computational power and enough data, it will learn much better than a human. Google has proven this.

In creation?

Yes, in solving the task of making a better AI. It is like a Perpetuum mobile – Artificial Intelligence that makes Artificial Intelligence…

So in some way, it creates. Meaning that people won’t be able to do even that?

No. The problem is that if such a technology is owned by a company like Google, for example, which has infinite resources and endless servers that can throw at this thing, their AI will prevail over almost every economic activity.

So we are trying to ensure that if such a machine is built it will be decentralized and autonomous and that no one person will own it. Everybody will have access to it. Everyone will be able to

participate in its development. Everyone will be able to use its results, but no one will own it – be able to control it. That is why we are working on our Scynet project, inspired by Skynet. But the idea is to save the world and become a decentralized AI system.

Is it possible to be out of control?

It depends what does control mean? Can humanity as a whole go out of control? We probably could. But there are too many players with too many interests. They all have to agree among themselves that they want to change something in order for the system to be changed.

The system itself is decentralized and autonomous and no single person can influence it. It represents the collective interest of all the people who’ve to build it.

So you want to eliminate the huge influence the big tech giants have?

Yes. I think these tech giants are in for a rough future. On one hand because of this decentralization, that directly opposes their centralized model.

On the other hand because they hold a lot of data which is not theirs. That was the whole issue with the GDPR. But the GDPR is just one legal framework. These big companies are now swearing that this data will not be used for anything bad.

But I’m anxious that my data, on where I go and what I do during the day is in Google’s servers. And if anyone hacks these servers, which is not impossible, It happened just recently with Facebook, Then all of our data would become publicly available. No matter what Google promises – the data is in this one place.

It is literally a Honeypot, as hackers say. A jar of honey where all the rewards are. This is a problem. We need a model where the ownership of data is decentralized.

We have a solution for this, but we will start working on it after we finish the first two.

How long will it take for this project to be built?

This second project for data decentralization is called Apocryph. It would allow people to keep their data with themselves. If an AI wants to train on the data the AI comes as a guest. The AI learns without seeing the data, using a special type of encryption.

After the training of this AI is complete, people can pay for the AI to receive services from it. As for how long it will take. We will launch Scynet and Wetonomy within this year. By the end of this year, we will have good beta versions. I hope that during we can begin and launch Apocryph. These are the plans for now.

And how will we force the tech giants to decentralize the data they hold?

I will not be by begging them. More like with everything else in business A more effective model will emerge that will disrupt them.

Do you believe that?

Yes, I deeply believe it. We foresaw the decentralization model early on and we are working hard, but there are other teams working in the same direction. We are not the only ones who see this trend emerging.

Other teams outside Bulgaria?

Yes, outside Bulgaria. There is a concept emerging, called the Personal Data Locker. A personal locker for you own data. This is something that is slowly becoming a term.

How do you see the future in case this happens?

Surely decentralized. I think this part is here to stay.

Because of the smart contracts?

Yes, because of the blockchain. It is the foundation allowing the decentralization to happen. Because up until very recently there was a mathematical problem from the Game theory, which has long been unresolved. The so-called problem of the Byzantine generals and blockchain solves this problem. And it makes everything else possible.

And how do you see the future?

Definitely exciting. To me, it is not frightening but fascinating. I see exponentially growing opportunities. Which will be ever more accessible to everyone. Today the business belongs to the businessmen and the rest of the human resources just work with them. Now that this “human resources'” term is becoming more and more redundant. We will all become some kind of creators. Everyone will focus on what they can do well and will trade for it in an economy that is mostly automated and decentralized.

Still, won’t these people need to hire other people to help them? Can’t we all be entrepreneurs?

Yes, we can’t. This Leadership trait is in 20% of the population. The rest do not have this need to stand out to be leaders and to be in front. Most people do not have this need. But the idea is that working for a salary alone is also optimal.

To me, the incentive behind a salary is the most treacherous thing for an economy. It is as close to communism as it can get. One has to come to the office, adhere to certain rules and objectives, and they will be guaranteed a certain level of pay in return. But this pay does not correlate to what one does while in the office and to the goals of the whole company. To me, the salary is a very inefficient form of reward.

As an alternative, we propose the model behind Wetonomy. We call it “High-risk Automated Debt”. In other words, the company or the Wetonomy DAO issue debt, to the people who contribute with their work. It can also issue debt to its investors. And when the company

makes revenue or profit the money automatically goes to a smart contract which in turn buys out the debt and rewards the contributors.

This way everyone makes money when the company does. There is a direct link between reward and contribution.

Don’t you think that for this system to work there should be a change in mentality?

Yes, I do. But, I also see this change happening right now I meet with a lot of friends who have companies. They all say my employees are not motivated. On the other hand, when you ask the employees, they are also disappointed. Both sides are quite frustrated with the current situation. They are looking for a solution.

We meet more and more people saying, “How can we implement your model? I’ve heard about it, and I want to try it” We are still developing it, so maybe we will need another two months to finish it. But the interest is already there.

What drives you?

Seeing the change around me. Honestly speaking, the things I talk about may seem a bit like fiction and wishful thinking, but the fact is that every morning I get up and I know I will do something specific about these things and that I will have a specific result. Things are happening in real-time, and I can see how the change is happening here, and now. That is what drives me.

Do you have a favourite book?

Yes. I have favourite books, in different genres. I read literature that is scientific or documentary, not fiction. For example, Steven Covey’s “7 Habits of Highly Effective People” is a book I recommend frequently. Other interesting books, related to Entrepreneurship “The Innovator’s Dilemma” by Clayton Christensen, “Zero to One” by Peter Thiel.