Interview with Braintrust – Exploring Decentralized Talent Market Opportunities
Braintrust is a decentralized talent market driven by blockchain technology and cryptocurrency, which aims to connect the world’s top high-tech talents and well-known companies in a decentralized way. Compared with traditional talent intermediary platforms, Braintrust has many advantages such as low fees, high efficiency, and users’ governance rights. With the currently growing popularity of the gig economy, Braintrust gives users more flexible, efficient and free working environment and opportunities.
I. Ownership economy and gig economy are the general trend
At present, nearly 40% of the working population in the United States are freelancers, and the freelance market size is about US$1.5 trillion. Under the influence of the pandemic, working remotely and working online have become common modes of work and are likely to become regularly and universally adopted in the long term, and the number of freelancers and economic scale will increase exponentially. In addition, the employment relationship between employees and the company is also changing. The market has shifted from being dominated by the long-term employment relationship to short-term or flexible modes of work, demonstrating the huge market potential of freelancing and gig economy.
In addition, the success of Ethereum and the rise of DAO woke people up to the ownership economy for the first time, i.e. users own, operate, maintain, and expand the network they are using. It can be said that anyone who owns Bitcoin and Ethereum has ownership of the network, and they can participate in mining or pledge to prove their commitment to the network. Now this concept of ownership economy is no longer limited to the field of infrastructure, and more projects have brought this concept to upper-level applications such as finance, social interaction, consumption, and society. Ownership economy can realize the autonomous operation and expansion of the network, and through various forms of incentives encourage users to contribute to the network from a deep level rather than just consuming and using the network. Cryptocurrency and blockchain technology have laid the technical foundation for the development of the ownership economy, and the Web3.0 decentralized platform is the direct driving force for the promotion of the ownership economy.
II. Braintrust solves the pain points of the traditional talent market
We believe that the current traditional talent market still has the following unresolved problems:
- The platform collects high fees from companies and talents;
- Long matching period and low efficiency;
- The human resource solution market is highly fragmented, with resources unintegrated;
- Without the right to make decisions, users have to passively accept any policies of the platform, and the interests of the platform and users are inconsistent;
- The quality of platform companies and employees is not guaranteed.
The current competitive landscape of talent market services is highly fragmented, lacking industry synergy, and resources have not been effectively integrated, primarily due to the highly similar operating mode adopted by the traditional talent market platforms, under which both employers and employees are charged high fees, making users less willing to use such platforms. Capitalizing on the market entry point, Braintrust significantly reduced fees, and linked the benefits of the platform to the benefits of users. It can be said that Braintrust has tapped into a new field of supply and demand and created a new market not involved in the traditional labor market.
Compared with traditional talent market intermediaries, the Braintrust solution has the following advantages:
- The cost is greatly reduced. While traditional platforms charge a handling fee as much as 30%-50% on users, Braintrust does not charge any fees;
- The matching efficiency is greatly improved. It usually takes 1 to 3 months for traditional platforms to successfully match companies and employees, while it only takes about 48 hours with Braintrust;
- The talent markup is greatly reduced. Traditional platforms require companies to pay 3 to 4 times the market price of employees’ salaries, and Braintrust only collects 10% of the talent markup from corporate customers;
- High-quality talents are guaranteed. At present, the talent pool of Braintrust platform is comprised only of engineers, designers, developers and other types of high-tech talents and the overall quality is very high. P2P audits are required for users; only qualified users can use the Braintrust platform. Braintrust provides a vetted, high-quality talent pool for corporate customers. Traditional platforms house talents of uneven quality with basically no barrier for entry;
- More and better job opportunities are offered. Users have access to well-known US Fortune 1000 companies, such as Nestlé, Nike, etc.
- Users have the right to make decisions. Controlled by users, the Braintrust platform operates in a decentralized manner, where users have the right to make decisions and can jointly determine the future direction of the platform. Moreover, users will be rewarded for making contributions to the network, making sure the interests of the project are consistent and linked with those of the users. On the other hand, the main purpose of traditional platforms is to make profit from platform users, and the interests of the two are essentially contradictory.
III. Braintrust adopts a decentralized market operation mechanism
Braintrust market operates mainly by blockchain technology and cryptocurrency in a completely decentralized manner. BTRST is an ERC20 token, and the token economy plays an indispensable role in the operation of Braintrust.
Talent market economy driven by BTRST tokens;
- The pledge of tokens proves a user’s commitment to the company. Users can use stake BTRST to promise their employers that they have stronger working abilities than competitors for greater chance to get the job, which contributes to a stronger relationship of mutual trust between the employers and employees.
- Decision governance. Users can vote with their BTRST tokens to determine the direction or important decisions of the Braintrust network, including fee structure, roadmap, new features, and so on. One token equals one vote, achieving the purpose of user governance and control of the network.
- Other functions. Users can use tokens to unlock vocational skills and professional courses on the platform, gain access to conferences, and so on.
The above are some of the basic functions of the token in the initial stage. As the project progresses further, more new functions will be unlocked continuously. It is worth noting that the token BTRST is not used to pay employees’ salaries, and salaries are still paid in fiat currency (mostly in U.S. dollars), so users do not need to fear that their income will be affected by the fluctuation of the token price. BTRST is not used for payment purposes but to a greater extent to incentivize and grow the network.
Users can obtain BTRST tokens in the following ways:
- Recommend users and corporate customers to match transactions;
- User quality audit;
- Provide vocational skills courses on the platform
IV. Why do we believe that Braintrust will succeed?
The awakening of the open network and encryption era
The gig economy, Web3.0 and ownership economy have already become the general trend. There will be more and more freelancers around the world who are willing to contribute their labor value in the form of short-term jobs. Moreover, the pandemic has hastened the coming of this era, and Braintrust is exactly an application of Web3.0 in the field of talent market. In addition, people have a growing awareness of cryptocurrencies. At the beginning of 2020, 10% of the people on the Braintrust platform held cryptocurrencies. This number is now as high as 85%. Therefore, the rapid development of cryptocurrencies in recent years has provided a better soil for Braintrust, and more users of the Web2.0 platform are expected to join this decentralized network in the future. In June 2020, Braintrust’s customer base has more than tripled, and the project scale has grown to $57,000. In 2021, the number of jobs on the platform has more than tripled. Braintrust is on the highway to success in the era of open networks and cryptocurrencies.
Use blockchain and token economy to effectively solve traditional talent market problems
- Lower fees: Traditional talent market platforms charge high fees from users. Braintrust effectively uses blockchain technology, tokens, and decentralized governance so that the platform can achieve zero fees for users and charges 10% of fees only for corporate customers.
- Higher efficiency: The traditional talent market generally matches talents and employers simply through a price that both parties consider reasonable, and the matching takes several months to complete. However, Braintrust considers the bids of both parties, employee skills, location and other factors to conduct comprehensive matching. The Bid-Ask of employees and employers is multi-dimensional and only takes a few days.
- User participation in governance: Users have decision-making power while using the Braintrust network, and can vote to jointly determine the future direction of the platform. On the other hand, traditional platforms lack transparency, and users cannot participate or speak up.
- Use the token economy to promote the development of the network: The platform token BTRST plays an indispensable role in the effective operation and growth of the network. Users can obtain token incentives by introducing employees and corporate customers and pledge tokens to prove their commitment to employers so as to strengthen the mutual trust between employers and employees. The various functions of the token are supported by the underlying logic. Each design plan is to attract more users and distribute the benefits to the users, so that the Braintrust network can achieve self-efficiency and continue to grow. However, traditional platforms do not have any incentive model, and the interests of the platforms and users are in conflict.
Better market entry point
The Braintrust platform currently only includes high-end talents such as engineers, designers and developers, and does not include all types of work. That is to say, Braintrust adopts a strategy of having an entry point and focus to open the talent market in the early stage and then expanding horizontally. The world is now short of high-tech professionals. It is easier to clarify the market demand and the future direction of products by choosing the right market before expansion.
Investment from well-known institutions
Braintrust completed a $6 million seed round of financing in June 2020, and completed a $18 million strategic financing in October. Investment institutions include HashKey Capital, Pantera, Multicoin Capital, Galaxy Digital, ACME Capital, Blockchange Venture, etc.
Strong team background
Both Adam Jackson and Gabriel Luna-Ostaseski, the founders of Braintrust, have been successful in serial entrepreneurship. There are more than 20 other team members mainly responsible for marketing, technology and operations.
Adam Jackson is a serial entrepreneur and investor who has established four venture capital companies and one asset management company in the past 16 years. In 2012, he co-founded Doctor On Demand, a medical service organization, and raised $165 million in financing. In 2017, he co-founded Cambrian Asset Management, a blockchain asset management company. Adam is also an angel investor in more than 100 companies / projects, including: Eco, Collective, Ethereum, Bolt, Placer, Aktana, Skale Labs, Protocol Labs, JCTurbo, Apero Health, Rappive, MyTime, Automatic, Womply, Superhuman and Zenefits.
Gabriel Luna-Ostaseski is the co-founder and current board member of the home improvement company Modernize before founding Braintrust. He also established Upshift Partners to provide development and customer acquisition consulting services for technology companies in Silicon Valley, including humbtack, Uber, Lending Home, Metromile and Massdrop.
We believe that under the general trend of Web3.0, more and more decentralized platforms will be born to replace traditional intermediaries, making people’s work and life more efficient and cost-effective. Just like Celo in the payment field, Compound and Uniswap in the financial field, Braintrust emerges in the talent market. We hope everyone will look forward to Braintrust’s launch on the mainnet on 1 September and the changes Braintrust will bring to the talent market and even the mode of work in the future. For more detailed information about Braintrust, please refer to the white paper: www.usebraintrust.com/whitepaper
This time we will be interviewing Gabriel, the co-founder of Braintrust. In the interview, he shared with us the core value of Braintrust, a decentralized talent network, and his industry views on the gig economy and Web3.0. The whole interview is as follows:
— “Braintrust is a low-cost, efficient, and open talent network.”
1. Scarlett: Please briefly introduce the Braintrust project.
Gabriel: From a higher perspective, Braintrust is engaged in a large-scale transformation. Now there may be some employees who have worked in the same company for 30 or 40 years, and we believe that people need more flexible, dynamic, and independent working environment and modes of work. This is the so-called “gig economy.” But in terms of the gig economy in the current Web2.0 environment, there is still a centralized intermediary platform between employers and employees. Platforms like Uber or the food delivery platform DoorDash charge high commission fees from users. In addition, businesses operating on the platform or users who use the platform need to passively accept any changes made by the platform. They do not have any voting rights, nor can they participate in any decision-making, which is the second problem: users cannot speak up. Luckily, blockchain and cryptocurrency have witnessed rapid development in recent years. Bitcoin, Etherum, Filecoin, etc. have laid the foundation for open networks. This also bring opportunities to projects like Braintrust. Braintrust focuses on solving problems in the talent market. Braintrust’s decentralized network is owned and controlled by users. What Braintrust is doing is abandoning the traditional outdated centralized talent market operation model and replacing it with a zero-fee decentralized model. In addition to fees, in the Braintrust network, users can vote on the roadmap of the platform, or the changes and decisions they think the platform should make. So basically, Braintrust is a migration from Web2.0 to Web3.0 in the talent market.
2. Scarlett: Why did you choose to enter the talent market? What are the unsolved problems in the traditional talent market?
Gabriel: First of all, why choose the talent market? Freelancers now have a value of 1.5 trillion U.S. dollars in the world, and they are growing at compound interest every year. This is a huge market. In addition, there are not one or several prominent monopolies or oligopoly companies in the talent market, so in general this is a highly segmented market, and the platforms are all charging high fees, making users more willing to join a low-cost or zero-fee platform (we don’t charge talents, and charge employers only a 10% commission). The existing freelance market is huge, but there is no company that integrates all freelance resources, and existing companies charge high prices. That’s why we choose the talent market. It can be said that Braintrust has reached an uncharted area in the traditional talent market.
3. Scarlett: In summary of the problems in the traditional talent market and the actual market needs you mentioned, how do you think the solutions provided by Braintrust solve these problems and meet market needs? Compared with the traditional talent market platforms, what benefits can the Braintrust platform bring to users?
Gabriel: First of all, for talents, they can come into contact with Fortune 1000 companies in the United States and their open job opportunities through the Braintrust platform. Braintrust will provide independent workers or high-end technical talents with more opportunities to join well-known corporate projects. Second, after employees find a job on the traditional Web2.0 platform, the platform will draw a 30%-50% commission. By contrast, Braintrust does not charge employees, so they will get higher salaries. Third, employees can make suggestions to the Braintrust network, make voting decisions, and speak out for their own interests. More than 60% of Braintrust tokens are allocated to the community, and the way for users to get tokens is to introduce more users, companies, or help the network screen talents, etc. So imagine that you, as a freelancer, have the opportunity to come into contact with larger companies, more interesting projects, earn a 30%-50% higher salary than on other platforms, and can get tokens. All these make Braintrust very attractive to talents.
For companies, nowadays most companies need scientific and technological talents. Large companies like Nike and Bank of America are looking for software developers, engineers, designers, and some companies are also searching for blockchain engineers. The first benefit for enterprises is that all the talents on the Braintrust platform have been screened and most of them are high-end talents. So it is easier for them to find suitable and high-quality candidates. Second, it is extremely easy for employers to use the platform, and the matching generally takes 48 hours, in contrast to one to three months through traditional institutions or platforms. Finally, employers using traditional platforms usually need to pay 30 to 40% of the market price of employees’ salary as commission, while Braintrust only charges a 10% commission for talent markup. That’s to say, employers can hire 3-4 times as many talents from the same budget.
4. Scarlett: Next, I will ask some more detailed questions. What kind of talents or work types are included in the Braintrust platform? Can everyone register on the platform and get job opportunities?
Gabriel: At present, the platform only works for three types of talents: engineers, designers, and developers. Every user who wishes to register on the platform needs to pass the KYC on it before becoming a “talent”. We believe that every segment of market needs to start with a specific part before expanding horizontally, just like Uber, which started with Black car. We currently mainly focus on high-tech and high-end talents.
5. Scarlett: In terms of employers, which companies does Braintrust currently cooperate with?
Gabriel: We have established cooperative relationships with well-known companies and employers worldwide including Deloitte, Nestlé, Nike, NASA, Pacific Life, Porsche, Blue Cross Blue Shield Association, Black+Decker, Nextdoor, a neighborhood social network platform, and Task Rabbit, a gig platform.
6. Scarlett: How do employers and talents on the platform match? Does the platform system automatically match the resume created and uploaded by the user with the employer’s requirements?
Gabriel: Yes, the matching of Braintrust employers and talents is based on a Bid-Ask model. “Ask” refers to the demand side of the market, that is, employers. Employers put forward the criteria for the talents they need, such as skills, experience, geographic location, salary, etc. The contract automatically matches these conditions with the “Bid” of the employees in the market. These are all automatically executed by the agreement. The matching process takes about 48 hours.
7. Scarlett: How is the user’s salary determined?
Gabriel: The salary and compensation of employees are basically driven by the market. For example, if you are a machine learning engineer which is hard to find, you can basically determine your own price. Another example will be, if you are a front-end App developer, your price may be determined according to specific circumstances. Therefore, the salary at Braintrust is determined by the above-mentioned “Bid-Ask” model, which depends on geographic location, experience, skills, and requirements from both employers and employees.
— “BTRST tokens are used to incentivize contributors to the Braintrust network.”
8. Scarlett: Next, let’s talk about the token economy of Braintrust. What is the purpose of the token BTRST?
Gabriel: First of all, BTRST represents the trust of users in the entire mechanism. Employers and employees on the platform are in different places and have never met each other, and users can pledge BTRST tokens during the Bid process to promise employers that they have better working ability than competitors. This is more like a type of bond, where employers and employees can use tokens to establish a stronger relationship of mutual trust. The second and most important point is that people can vote to participate in decision-making and governance by holding tokens. Users can put forward any proposals about the direction and development of the platform, such as the charging model, so people can jointly determine the future development of the platform that concerns their own interests. Braintrust’s governance model is similar to projects such as Compound in the DeFi world. One token has one vote, and it also includes off-chain proposals and discussions as well as on-chain voting. The third point is that we are creating a Braintrust Academy where users can use tokens to unlock more professional courses and improve their skills. The above are just some preliminary functions, and more functions will be unlocked in the process of continuous improvement of the network.
9. Scarlett: Can tokens be used for salary payments to employees by employers?
Gabriel: BTRST is not U.S. dollars. What we are doing is not creating another currency. BTRST cannot be used to pay salaries. Most companies that cooperate with the platform may not want to get involved in cryptocurrency. Employees also want their salaries to be paid in local currencies. The salaries of users on the platform are still paid in fiat currency (mostly US dollars).
10. Scarlett: How do people get tokens from the Braintrust network?
Gabriel: We want to use tokens more for incentive purposes and to encourage users to contribute to the network. We hope to use tokens to make the network grow by itself, attract more talents and companies, and have more liquidity. Therefore, people can obtain BTRST by contributing to the Braintrust network, which includes introducing outstanding employees or employer companies (using invitation codes), matching Bid-Ask between them, helping the platform to conduct P2P talent audits, and providing training courses on the platform. Using tokens to incentivize referrals and audits is more efficient and cost-effective than traditional marketing methods. For example, Nestlé needs ten machine learning engineers for a data science project, the referrer can get 1% of the transaction amount as a reward, and the 1% reward will be automatically credited to the referrer’s wallet in the form of BTRST tokens, so you can imagine that this is a big incentive for the recommender.
— “Braintrust has tapped into markets not involved in the traditional talent field.”
11. Jupiter: As you mentioned earlier, the talent market is relatively fragmented. Why is there no leader in this market to integrate these scattered resources?
Gabriel: As for why there is no one person to integrate this fragmented talent market, I think the most important reason is the high intermediary fee. Excellent talents don’t want to pay 30%-50% of their remuneration to intermediaries. Enterprises don’t want to pay employees 3-4 times the market price, either. Both employers and employees are reluctant to pay this fee, and almost all intermediaries in the traditional market use a fractional model for operation. That is why there has not yet been a consolidator in the market. Braintrust is just the opposite. We draw the least fees from both sides. The result of low fees is that we can attract more job opportunities and talents. It can be said that Braintrust has tapped into a new field of supply and demand by lowering fees, established a more attractive talent trading place, and created a market that is not covered by traditional fields.
12. Jupiter: Do you think that traditional talent market service platforms can achieve the same goal without the help of blockchain technology? Can they attract more users through lowering fees?
Gabriel: First of all, if the intermediary cost of traditional platforms is reduced to zero, the purpose of attracting users can be achieved. Considering the interests of stakeholders, this situation is basically impossible. In addition, even if the cost is reduced, governance and decision-making are still a problem. Just imagine, can they gather everyone in the network into a room to discuss the company’s future direction and roadmap? It’s basically impossible. Therefore, it is impossible for traditional companies to change the corporate governance structure and delegate its rights to users, nor is it possible to reduce fees to zero.
13. Jupiter: Do you think there may be any Braintrust competitors in the future?
Gabriel: I think the well-known Web2.0 talent market platforms can be regarded as potential competitors of Braintrust, but as mentioned earlier, they generally charge high fees and users have no governance rights. In addition, some large-scale outsourcing or consulting companies may also compete with us. In fact, talent outsourcing companies are doing “global labor arbitrage”. They arbitrage profits by providing employees with different salaries in different regions. This may have been an inevitable method in the past, but now if you propose to some employers that you can work directly with the talents you expect without paying 3-4 times the salary, I think this is an attractive proposal for them.
14. Jupiter: How to educate traditional Web2.0 users about the value of tokens and network to make them believe that it is meaningful?
Gabriel: If the time is 2018, I think it would be very difficult to convince users to join our network and use cryptocurrency. Nowadays, more and more people are learning about crypto. With the awareness of crypto, the number of users holding cryptocurrency is growing rapidly. At the beginning of 2020, 10% of our users own crypto, and now 85% of users own crypto, and our network greatly encourages recommendations and invitations. Users can study or learn about crypto from their friends or referees before joining Bratintrust.
15. Jupiter: I want to know your marketing strategy. How does Braintrust expand the number of talents and companies?
Gabriel: We can go back to the topic of how to get tokens. We are essentially rewarding those who contribute to the network by giving away BTRST. People can go to the “earn token” section of our website to browse what types of talent Braintrust is looking for right now or notifications that have been received about the referral talent reward tokens. Some people may not be employees or corporate employers, but if they were in the middle and worked to connect them, they can get token rewards. We call these people “connectors”. So basically we do not spend money on marketing, nor do we advertise. All Braintrust’s talents or corporate customers will come from recommendations.
16. Jupiter: In the long run, in the next 5-7 years, assuming that Braintrust has become the leading project in the talent market, what is the next plan?
Gabriel: As mentioned before, the Braintrust network is completely decentralized and controlled by users. We can see that users are submitting new proposals every day. Proposals are likely to be made more quickly and in greater numbers in the future. Therefore, users will decide what updates or adjustments the network should make according to the situation, as well as the future trend, because this network is related to their own interests, and users have their own business on our platform. I am looking forward to and excited about the future of Braintrust, which is created by users in the future, and I believe users will make the best choice.
— “The gig economy and Web3.0 are just beginning now.”
17. Scarlett: In the context of the global pandemic, remote office has become the norm for many people, and many companies are now supporting the remote office model. In addition, more and more jobs are based on “projects” or employment contracts are relatively short. What do you think of this “gig economy”? Will it be the trend of the labor market in the next ten years?
Gabriel: In my opinion, the gig economy represents freedom and the autonomy of users in the work they do. But judging from the current model of the gig economy in real life, I think it has been an economic disaster. “Gig workers” must yield 30%-50% of the pay as the platform commission, and then the platform uses the high commission to formulate rules and regulations to squeeze more profit from “Gig workers”. I think the current gig economy is an “experiment”. It not only allows us to see the innovative mode of future work, but also exposes the shortcomings in practice. People have seen that they don’t have to work in the same company all the time, and they don’t have to be on site. They can become independent workers. The 2020 pandemic has pushed this trend forward for ten years. What is certain is that this is only the beginning of the trend, and if there is no high commission for intermediaries, the gig economy will grow exponentially in the next few years with the help of decentralized networks.
18. Scarlett: How do you see the evolution from Web2.0 to Web3.0?
Gabriel: In my opinion, the innovation of Web3.0 lies in giving users the governance and ownership of the network, allowing users to participate in the direction and future of their network. Taking Uniswap as an example, users are very concerned about the cost structure or the future development of the project, which is related to their vital interests. So this is a new economic model driven by blockchain technology and cryptocurrency. In my opinion, Web2.0 to Web3.0 is a fundamental shift from centralization to decentralization.
This interview is conducted by HashKey Capital Research Director Jupiter and Researcher Scarlett.
Statement: The above only represents the personal view of the interviewee and is for reference only, and does not represent any position of HashKey Capital and its affiliates, and the above content does not constitute any suggestion to act.
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