Digital cooperatives, disruptive innovation and the future of work. Interview with Todor Kolev, founder of Obecto

 

Deni: Hello again. I am here with Todor Kolev and we will be discussing whether technologies influence us or we can influence them. In case you forgot, we are at Coworking Space Puzl. Today they are our hosts. This is an amazing coworking space which hosts people from different domains tech, marketing, business and It is pretty cool. My name is Deni and I am part of the UniStart team. Hello, Todor, how are you?

Todor: Feeling great this Sunday. I’ve been here since the beginning listening to the other interviews. It is a very interesting Sunday afternoon.

Deni: Very interesting indeed. Hope this will become a tradition.

Todor: Yes! I hope it will!

Deni: I would like to continue the previous topic. Toni was here and we talked about young developers. Why did you decide to work as a developer?

Todor: This is an interesting question. In his interview, Lyubo said that he is a developer in his soul. Which also applies to me. I started when I was fifth grade, back in 1996. I was 11 years old.

Before this I was playing around with electronics. For me, it was really important to create something. What I wanted to do since I was a kid, was to create a system. Even before this, when I did not understand much, I was engirdling our home with strings to creating a system. Connecting things to one another. I wanted to create a system that works.

I started with electronics and I was making diagrams. But I was too young, maybe third grade, and actually I had no clue about physics. Afterwards, I attended a programming workshop where it was far easier. Then I started writing in the BASIC language.

This is very interesting because there is a quote by Dijkstra. A very important person in the informatics. He said that you cannot become a real developer if you have written in the BASIC language. Afterwards, Svetlin Nakov rephrased it: If you have written in PHP you can’t become a real developer. I have written both in BASIC and PHP.

So, I started with BASIC and after this it was very simple. I was writing in a English-like language. I knew what I was doing. I had full power. I was both aware of what I was doing and was able to create. This was the time I started understanding software.

As a kid in eleventh grade, I was able to create a system and this system was used by real users. About a year after I started programming I created a program for my father who was a police officer. He was able to keep track of his staff and make searches for them according to different criteria. This was how I started and I have been a developer ever since. Almost 20 years now.

Deni: Almost 20 years? Meaning that your desire to create is the reason for you to do this. Actually, this is the place to mention that you are not the typical developer.

Todor: Why am I not the typical developer?

Deni: Maybe a developer-entrepreneur.

Todor: Yes, actually, at one point I went astray, sort of speak.

Deni: Is this really going astray’?

Todor: Sure! Because currently I am going back to developing.

Before this I bought a small, thin businessman laptop which basically you cannot use for anything but email. I just recently started writing code again, just several months ago. I bought a new decent machine and I have my full powerful again. My business and entrepreneurial nature still exist, but I think I add most value to the world when coding.

Now I can find a way in which my systems can help the business and people. But its more of a hobby now. My real passion is programming.

Deni: Your real passion is programming indeed. Maybe some of our viewers, hopefully most of them, know that Todor is part of Obecto.

Todor: I am actually the founder of Obecto.

Deni: Yes, actually the founder of Obecto. And for a really long time he has been supporting the entrepreneurial ecosystem in Bulgaria. He is one of the people who have been helping to organize countless events. And thanks to whom many organizations exist.

Tell me more about Obecto. When did you start it and is this your first startup?

Todor: Yes, I started Obecto 2008. Back then I was working for another company, also a small studio. The studio was fine but I noticed that there was something wrong with the business as a whole.

Furthermore, it was 2008 which was the year of the big financial crisis, if you remember. Many people started noticing that there was something very wrong with the business and the economics in general. What I wanted to create, without knowing exactly what it was, was a company where people would come first. Not the money, the profit and everything else, but the people.

Obecto has been through many phases since, but what we currently represent is actually Obecto’s essence. Now we are a digital cooperative. From the outside, we look like a company but from the inside we are a network of developers, working together and creating value together.

Deni: What is Obecto’s purpose nowadays? Why does it exist?

Todor: This question has several answers. It exists because there are people who want it to exist. On one hand, there are people involved in the cooperative, and on the other hand, there are clients working with us. People create Obecto and it exists because of them.

What I want to achieve with Obecto, is a new organization model. In short, everything is heading to automatization, many professions are disappearing. And when they disappear, a significant part of the organizational structures in the world will become unnecessary as well. When a person has unlimited freedom, then terms as a company, employee and employer start losing their meaning.

This is why I am working on Obecto. In order to show this new model of the digital cooperatives. Actually, my idea is that this model of the digital cooperatives will offset the corporations.

Deni: According to you what is the future of corporations? I wrote it down in advance and did not know that you will mention this. What is the future of the corporations and the professions?

Todor: Neither of them has bright future ahead.

The problem is how we define “work”. We tend to think of “work” as something we have to do in order to earn money, which in turn will help us achieve something else. But when the automatization reaches the point where creating value will be more or less for free, because of automatization, “work” will no longer mean earning money. Corporations in turn, where people work to earn money and create the capitalistic economic cycle, will also no longer be needed.

Deni: I.e. a new type of economy.

Todor: Yes, a new economy.

What we currently see, on the top of the iceberg, is the so-called shared economy. However, the shared economy is just a hat hiding many things underneath. All of these things combined will change the look of the economy as a whole.

Deni: I’d suggest going down the iceberg.

Todor: OK.

Deni: What are we going to see, after the shared economy? Currently we are witnessing the shared economy, for example through Uber. All of us are using it. Actually, not in Bulgaria, because it was banned. However, it is widely used. Airbnb as well.

Todor: There are a lot of examples.

Deni: What is the next thing that people do not see?

Todor: The iceberg consists of a phenomenon called disruption or disruptive innovation.

Disruptive innovation is the process in which a group of people who did not have the means to solve a problem, now have the means to do so. I.e. democratization. Usually, when something is first invented it is expensive and complicated. It is accessible for a limited number of people.

Afterwards, this product starts getting better, called sustaining innovation. After becoming better, this product becomes cheaper, called efficiency innovation. And when also the efficiency innovation is exhausted, happens the disruptive innovation. And then this expensive and complicated technology becomes accessible to everyone.

This is what happens on many levels. More and more things which were expensive and complicated, become cheap and widespread. For example, our mobile phones. Currently, in our pockets, we have the amount of computing power which would have cost billion dollars just about 15 years ago. And because we have this super computer in our pockets, business models like Uber and Airbnb exist. If we did not have this super computer in our pockets, this would not be possible.

Deni: One innovation following another.

Todor: Indeed.

The most important thing is that everything becomes democratized. Including the ability to create a working business, a working company. The democratization of those are in fact the digital cooperatives.

Deni: Which do you think is the next technology which will hit us?

Todor: There will be several.

Deni: For example?

Todor: There will be several and will come fast…

Deni: Because I have One favorite technology.

Todor: Which one?

Deni: Blockchain.

Todor: It is One of my favorite technologies too.

Speaking of cooperatives and blockchains. People in the cooperative create value together. While the traditional structure of shareholding is not flexible. This is why in our cooperative we are creating a cryptocurrency, which will help us share this value that we are creating. This is another disruption that we are creating. Regarding the technologies that will hit us,

Regarding the technologies that will hit us, we should consider the speed at which everything is changing and growing. If we were used to a new disruptive technology hitting the market every ten years, now this will happen every year, after this – every month.

One of the bold theories even claims that in the future the change will happen faster than 24 frames per second and our minds will not be able to comprehend it. But this is a more out there theory.

Deni: According to this theory, when is this supposed to happen?

Todor: 2045

Deni: Can we prepare For this? Hopefully we will witness it.

Todor:  Yes, we will witness it.

Many people even say that if you make it to 2045, you will probably live forever. But this a different topic still. We touched on many different and interesting topics. Regarding the technology that will hit us.

Deni: Looking at 2017.

Todor:  Currently I am dealing with Deep Learning and Artificial Intelligence. And many, really interesting papers came out on this topic over the last few months. They will develop further in 2017. We will start noticing significant progress in automatization and in the Artificial Intelligence.

Blockchain is another thing coming, but it takes more political will to happen. We will not be able to feel it right away.

But the interesting things will happen when we start hacking into things that are not just siliceous chips. For example, biology. For example, technologies such as CRISPR, which allows genes adaptation and bioengineering as a whole. Because, after all, the cell is a computer. A computer that executes a program in the form of a DNA. You put the program into the computer and it executes it. This way you can create an organism, executing all type of actions. Society is going to feel this trend as well.

Deni: In 2017?

Todor:  Maybe a bit later but no later than 2020.

Right now CRISPR is a mechanism which can edit the DNA of a living adult organism. It cuts part of the DNA and replaces it with another, A small molecular machine. And there are already patients treated with this technology for specific diseases. I guess that it will become widespread relatively soon.

For example, if someone wants to experiment with CRISPR right now, he will have to pay $1,200 for the kit that replaces one gene with another. The delivery is 4 weeks.

Deni: Which proves that It is close to being widely used. You are talking about automatization. We are discussing changes that will happen this year. People are asking themselves what will happen to their professions. Is it really that bad, if a profession disappears?

Todor: Actually, It is pretty good.

Deni: I think so as well and want to hear your opinion.

Todor: The problem is that currently we are in an economic system which states: one has to work in order to earn money and eventually live well. What we are about to see, though? It is not necessary to work anymore. There will be enough money for our civilization to not fall apart, until we reach the point of the universal basic income. Meaning, that people will receive a universal income just because they exist.

And at one point we’ll have to worry just about living well. This is why the disappearance of professions and “work” is something really nice. Because people will have the chance to do what they really want.

Here comes the question, what do people actually want to do. Recently I read a really nice quote. Unfortunately, I do not remember it exactly. But it was along these lines – a person is most productive when he is engaged in things, which are a continuation of his childhood games. Everyone has played with something as a kid and if you continue it in your adulthood, chances are that you are going to be very productive and happy.

Deni: Sounds really interesting. So, when you look into the future of work, you see no professions, right?

Todor: Yes, more Or less. There will be different fields of activity but working by obligation will disappear.

Deni: OK. In this case, let’s give some advice to people watching us. Because maybe they are asking themselves which is the profession which will still exist. Which will be the activity that will bring me long-term dividends?

Todor: Everything that creates value can be monetized.

Money, in fact is just some points. We live in a game-like world where points are being measured in money. Just like in a game there is a way one gathers points. And these ways will change slightly. But basically there are two activities people can engage in, which I reached as a conclusion in somewhat formal way.

The first thing is engineering – the process of using an old, existing technology in order to create new technology.

The second fundamental thing necessary for a person is the entrepreneurship. This is the process of taking the current technology in order to create more with less. Which is actually the disruption process.

Bottom line, entrepreneurship and engineering. The best case scenario is a combination of both.

Deni: And if we have to answer the question, how to manage technologies and not let them manage us?

Todor: Become entrepreneurs…

Deni: Or engineers!

Todor: Or engineers!

Deni: OK! Young people are watching us. I have noticed this as a problem and have already discussed it with Toni – what do you think can motivate young people to pick up one of those things What should happen to shake them up?

Todor: Those things will happen anyway.

Again, my thesis is that the existing system will collapse relatively soon. And then it will become clear, what one should do. I do not think that a person should necessarily become an entrepreneur.

Nevertheless, there is this trend of everybody becoming an entrepreneur. Those things will come naturally to them. If one starts earlier that is great, of course. But the most important thing is that the person feels good with what he is doing.

Corporations will not stop existing all of a sudden. They will transform into something, but the transformation will take time and people will have the chance to adapt. Meaning, that either way it is really important for people to do whatever makes them feel good. If one likes gaining experience in a big corporation, let it be so. If one is ready to fight and create his own business right away, this is also fine.

It is important that a person feels motivated and happy.

Deni: Great! This sounds really cool! Now I think it is time for questions. I can continue asking you about my favorite technology blockchain but I am not sure it will be interesting for the viewers.

Deni: “How do you survive in this competitive world?”, “How do big corporations fit in this picture?”

Todor: I really like Peter Thiel’s book “Zero to One”. It says that competition does not create value. Because competition requires a lot of resources to be sustained and no value is being created.

What really matters is that the world is huge. Even when we say that the Earth is enormous, we still reach for populating other planets. There are just a lot of things that can be accomplished. And when a person finds his niche, then he can quickly create value. Afterward he can himself create a larger enterprise. The corporations in general are very political structures.

They have not been created in order to create value. At one point they just gathered so many people in one place that their main activity becomes the politics within rather than creating value. That is also why this is the main soft spot of corporations.

Deni: And actually this is why they start falling behind?

Todor: Yes, this causes them to waste lots of time in nonsense.

Deni: The difference is that a corporation has the resources, but one startup does not.

Todor: A startup moves quickly, adapts quickly and finds a niche quickly. And when it finds the niche that the big corporation has been neglecting and has not invested time and resources in it,

then the startup can go into the niche, grow quickly and dominate that market.

Deni: This is really interesting. What would you tell the young developers in Bulgaria, wondering right now, if they should start a business or if they should work for someone else? What would you advise them? You, personally are a developer who founded his own startup very early in his professional path.

Todor: My advice would be not to start a business just For the sake of it.

Because everyone is doing it and so should I. When a person starts a business, he needs to have the feeling that what he does changes the world in some significant way. And when you have that feeling in you, you will definitely recognize it. That is the moment to start a business.

Deni: So the right moment is when you feel that you can create value.

Todor: Maybe the “creating value” thing is a bit overused. But the right moment is when you feel there is something wrong with the world you can make better.

Deni: A thing that really annoys you and you can find its solution…

Todor: Yes, you know how to do It better.

Deni: OK. Is this the reason for you to continue working on Obecto and transform it?

Todor: Yes.

Deni: What annoys you?

Todor: A world in which people are wasting time with politics, and lying to one other rather than creating value. I want to create an organization that includes creating value.

Deni: Currently you are an organization that creates software.

Todor: Yes, but I also want to boost the digital cooperatives model.

Of course, we are not the first cooperative, but we want to act as a role model for a successful cooperative. And participate in this new growing economy.

Deni: This is great! I want to ask you for an advice. We are organizing a program for young entrepreneurs and it is just starting. What is the future of such programs and is there a point for them to be organized?

Todor: Of course, there is a point.

Since you and the whole crew are here and you have devoted your time on Sunday to create this event. This means that this program has its purpose in the society. You are helping people, which is important.

Deni: Yes, and we are annoyed that not enough young people start their own business.

Todor: I think the other way around. The point is not for everyone to become a developer or an entrepreneur. It is great to have motivation and role models and to clear the path for the next to come.

But it is better for a person not to be pushed, rather feel the right moment. Otherwise there would be kind of an inflation. Meaning if everyone becomes an entrepreneur it would be hard to spot the good role models. The market will be flooded, sort of speak.

Deni: You mean that if too many people become entrepreneurs, the ecosystem will become corrupted?

Todor: Yes, at some point it becomes a fashion choice and I am a bit against it being “fashionable”.

Deni: Like the way it is fashionable to be a developer?

Todor: Yes, you can say that. However, there is also an economical issue connected with being a developer. Because developers in Bulgaria get larger salaries than any other profession.

Deni: OK, I also asked Toni and I will ask you. We are talking about new technologies and about developers here in Bulgaria. Can something be created here in Bulgaria that will really change the world?

Todor: Yes, I think that’s exactly what is going to happen.

People tend to say that labor in Bulgaria is pretty cheap but that is not true. Currently, the developers in Bulgaria are paid almost the same as developers in London. I even have friends who are CTOs in London saying “Looking at your rates in Obecto why don’t I come work with you. I could live well in Bulgaria and not waste time in London.” So it’s not that our labour is cheap.

However, Bulgarians have these interesting traits. We tend to act in spite of things. In spite of the actual context. Maybe we are great individuals and can hardly play in a team. But I think there is a lot of talent in Bulgaria yet to be discovered. This energy that we observe here is on the right track. I think that Bulgaria is yet to produce its great role models.

Telerik is something great. A 200mln exit is great. But this is no meaningful exit bearing in mind the global scale. We have to reach a several billion exit in order to achieve something meaningful.

Deni: Can we expect unicorns?

Todor: Of course. I hope that Obecto and our new product will become such a unicorn.

Deni: This is a great finale for today. I wish to you and Obecto to become a unicorn from Bulgaria.

Todor: Thank you! We are aiming to reach a significant success in the next one year.

Deni: Let’s have an interview next year. Same time, same place and discuss Obecto’s success. Thank you for your time today!

Todor: Thank you too.