work3: The Internet of Careers 💼

Welcome to this week’s edition! 👋

You may have noticed that I have decided to rebrand from The Chase to Work3. I wanted to give this newsletter a name that identified more clearly with the topics covered, and thought to use the same distinction that is going on between Web2 and Web3 - given how much disruption and innovation is going on in this space. Also, as you will see at the end of this edition, I am happy to start using polls regularly to get more real-time feedback, this way I can craft and optimize better for what is more helpful and interesting versus what’s just in my head.

On with the newsletter - which for this week is part of my interview series.

For this issue, I’ve chatted with Dror Gurevich - the Founder and CEO of Velocity Network Foundation, a non-profit membership organization that aims to empower individuals to gain agency over their verifiable education and career information, and build the “Internet of Careers®”. 

Velocity Network™ and its open-source protocols enable a blockchain-based, decentralized utility layer that replaces the outdated, fragmented way talent represents their career reputation across the labor market: resumes and other self-reported online profiles. The decentralized network is a public utility governed by its members - mainly workforce tech vendors and industry associations like SAP, Oracle, Aon, Cisive, HireRight, Cornerstone, Randstad and UKG - rather than being owned by a single vendor.

The Network enables the workforce to claim and stack career and education credentials, store them privately on digital wallets and share them with prospective employers, reducing the time and cost of hiring. The credentials are issued to the individuals by schools, former employers and credentialing or licensing organizations and are tamper-proof and cryptographically secured hence trusted by employers.

50 of the largest workforce and education tech vendors in the world engaged thus far and work to connect to the network to enable their customers (e.g., employers, recruiters) seamless, out-of-the-box, first-party (transacted by the individual herself), private and secured exchange of trusted personal career and education records.

How did the idea of VelocityLabs, and more specifically of ‘The Internet of Careers’ come by initially?

I was holding the Managing Partner position at one of the leading workforce tech system integrators in the EMEA region. Several hundred people, working with the largest enterprises in the region to transform their HR infrastructure. During that time, I've made it a habit to spend a few hours every week with early-stage start-ups building solutions for the world-of-work. I had probably met a couple hundred start-ups before I noticed that almost every time the conversation with the founders was not necessarily focused on the product they are developing or their go-to-market strategy, but rather on the problem they have defined and were trying to solve. In most cases it was too small and tactical to make a real difference in the disrupted and volatile job market we are facing. My question to them was always the same: is this what you want to spend your next 10 years on solving, day in, day out?

It was after one of these meetings on a summer day in 2018 that it just hit me. I have been 20 years into a successful career in the workforce tech space and yet never asked myself this question. I spent the next couple of days obsessed with a single question: what is the most fundamental thing that is broken in the current job market, the one malfunction that underpins why we are struggling to tackle the mega-trends for the future of work?

The answer was astoundingly simple: the fact that data exchanged between individuals and business in the context of employment is self reported and untrustworthy required, amid all the fantastic tech we now have in HR, to stop everything for weeks and manually verify the individuals education and career credentials. Until we fix this broken data layer underlying the job market we can’t expect to see the true digital transformation of this space.   

This process led to the launch of Velocity, on a mission to build the Internet of Careers®, a public, game-changing, blockchain-based utility layer that replaces the outdated, fragmented way talent represents their career reputation across the labor market, with self-sovereign, elaborated, and trustworthy career identity.

Fixing the broken data layer underlying the global labor market will unleash the true digital transformation of this space and open a new spectrum of innovative use cases and services for the world-of-work.

It’s a once-in-a-generation revolution of the labor market, and it has been a super exciting ride for me so far. 

Did it have a blockchain component in its first design or was that introduced later?

Technically it would be easier to store verification keys and credential metadata on a centralized database, achieving similar functionality in a much simpler way. This core design pattern of decentralization played a key factor in our decision to build the Network as a Blockchain based utility layer. Three main concerns were in play: Trust, Control and Availability.

We needed to build a shared data utility layer that underpins the highly fragmented labor market. One that is used by millions of unrelated relying parties that need to trust the data coming from multiple issuers and stored on it, enough to use it as the basis for hiring and talent related decisions and compliance processes.

When it comes to data storage and handling, blockchain and database work differently. Databases are threatened from many angles– by rogue administrators, or human error like password sharing, weak passwords, or uninformed user behaviors. The most severe threat to data security is malware. Malware can enter databases through infiltrators via phishing and therefore gain access to a credible database. It can cause severe damage to the database.

Blockchain, on the other hand, works differently when it comes to data storage. Blockchain supports immutability, which means that data once is written cannot be erased or replaced. Immutability means that no data tampering is possible within the network.

In addition to the trust challenge, such platforms are natural monopolies. Network participants and especially the workforce tech and education tech incumbents that build their solutions on top of the Network see a huge risk in building critical functions of their business locked into a centralized 3rd party platform.

This is not a theory. We now have decades of evidence that centralized/proprietary platforms follow a predictable life cycle. When they start out, proprietary solutions do everything they can to recruit users and third-party partners like developers, businesses, and media organizations, to make their services more valuable and grow engagement on their platform. As these platforms mature and see increased adoption, their power over users and third-party partners steadily grows and Friction in the form of higher costs or access restrictions comes into play. Overall, the rules of engagement change. For the participants, this transition from cooperation to competition can feel like a bait-and-switch.

Amazon crushes small companies by copying the goods they sell on the Amazon Marketplace and then selling its own branded version. Google allegedly snuffed out a competing small search engine by demoting its content on its search algorithm, and it has favored its own restaurant ratings over those of Yelp. Other examples include Facebook vs. Zynga, and Twitter vs. its third–party clients and Facebook’s decision to block Vine’s friend-finding feature after the Twitter acquisition. A more recent example of this type of behavior can be seen in the legal actions against Facebook taken by the Federal Trade Commission. Forty-seven other state and regional attorneys general have joined this suit. The lawsuit marks the second major regulatory effort from the US government to rein in Big Tech, following the Department of Justice’s lawsuit against Google in October of last year for alleged illegal monopolization of the search and online ad markets. 

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Understanding these risks, most vendors will not join any ecosystem that is centralized and controlled by a single entity.

The only way to avoid this predictable scenario is to move to a vendor–neutral, open architecture network, governed by its members, for the benefit of its constituency. Blockchain has no controlling infrastructure and is completely decentralized. A single person or group can never control it. The ecosystem of blockchain is composed of unbreakable rules and laws which don’t require regulation. This shields the data from commercial interests, political pressure, and regulations. Any person operating on the blockchain must use it as the rules specify, without making any modifications to the blockchain framework. Changes can be implemented but requires the community of users to agree on these changes before they can be implemented.

The last factor was availability. As a critical global infrastructure to the labor market, availability is a big issue. In the last few years, we've seen that even the most redundant and secured infrastructure, from Google or Meta, can fail, leaving users disconnected for long periods of time. A decentralized system is extremely resistant to liabilities. If a connection malfunctions on the bitcoin network, it doesn’t cause the whole system to collapse. There are various redundant nodes on the network that operate the blockchain.

Blockchain is no longer just about bitcoin or cryptocurrencies in general. Instead, it should be seen as a disruptive, revolutionary technology which will have major impacts on multiple aspects of our lives. The revolutionary power of such technology compares with the revolution sparked by the World Wide Web and the Internet in general. Just as the Internet is a means of sharing information, so blockchain technologies can be seen as a way to introduce the next level: sharing value.

For such infrastructure to be truly universal, trusted, and ubiquitous, and for it to break silos and interoperability challenges, we must not repeat the same mistakes that led to the reality we see today on the internet. The Internet of Careers® must be a distributed, cooperative, vendor-neutral, open architecture play. 

However, if I understand correctly, it is hosted on a private blockchain. Why have you chosen this implementation instead of a public one?

The main reason is compliance with privacy regulations. The GDPR for example restricts the transfer of EU citizens’ personal data to countries outside the EEA or international organizations. A central theme of blockchain is the distributed ledger, where every node in the Consensus Network can access, store, and add to the ledger, and since many of these nodes would be located outside the EEA, we can see the challenge in compliance. First and foremost, the Velocity Network™ blockchain does not contain any personal data. Second, the GDPR does permit personal data transfers to a third country or international organization, subject to compliance with set conditions, and only to countries whose legal regime is deemed by the European Commission to provide for an adequate level of personal data protection. In the absence of an adequacy decision, however, transfers are also allowed outside non-EU states under certain circumstances, such as by use of standard contractual clauses or binding corporate rules (BCRs). By using an access-restricted, permissioned blockchain network, Velocity Network Foundation® can assure that Network access is granted in compliance with privacy regulations.

What’s your opinion on skills and certifications being issued and validated not by central institutions but by individuals or communities of experts?

Validating workforce career related claims by sourcing verifications on each claim from multiple peers will significantly reduce fraudulent behaviors, especially if the right token mechanics are put in place to drive the motivations of the players. Nevertheless, there are quite a few shortcomings to this model. First, sourcing peer verifications is not an automated process, and there is an incremental administrative burden on the individuals to actively source referrals and verify claims. Motivation drivers need to be very strong in order for this method to allow for a broad adoption of these types of behaviors.

Second, there is still social bias built into this mechanism, when peer individuals would be requested to verify claims made by their social and professional network. This, in turn, leads to a lower level of trust by any interested party seeking to rely on these records.

And third, and most important, this method does not comply with regulator verification requirements. For the individual to be able to use their verified credential in any industry with regulatory compliance, a trusted primary source must verify them. Peer verification isn’t sufficient alone. 

Credentials issued using the Velocity Network are considered primary source equivalent.. The verified records are issued by the primary source as a tamper-proof and cryptographically secured record. No third-party providers store and centrally manage the data, meaning there’s no risk of tampering or fraud, guaranteeing trust and compliance. 

Do you think people should be compensated for sharing their career wallet / data, or in general be monetizing that data much like it’s starting to happen with cookie/ browsing data?

Yes. I think this should be a basic human right in the Age of Information we live in. I strongly believe that people should be given ownership of their data, choose whether to share them, decide how it is used by others, and even sell it and earn income on that sale, creating an economy around the ownership and transfer of valuable personal data.

How many people have been using Career Wallets on Velocity Network and how much has it grown in the last few years?

This is the wrong question for this stage we are in. The mental model you should use when looking at adoption is the TCP/IP protocol and the Internet. Just having the physical network and the TCP/IP protocol deployed (Layer 1) creating global interconnectivity and interoperability for the first time in human history, enabled independent software developers to build applications and use cases leveraging this new infrastructure (Layer 2), unleashing a wave of innovation that changed every aspect of our lives. This was when Amazone, Google, Facebook and the likes were born. 

Velocity Network is a layer 1 physical network and protocol that enables credential interoperability and portability across the global labor market. Once this is in place, independent software vendors, mainly the workforce and education tech incumbents are building their use cases leveraging this newly deployed infrastructure (layer 2).these include wallets, applications for background screening, streamlining job applications, employees onboarding, credentialing, licensing etc..  

In the next few months we’ll see the first-movers launching their solutions to the market. These are leading vendors that developed solutions and applications that will touch the lives of 50 million people. The next wave of Vendors will launch in the next 2-3 quarters with a target addressable market of 200 million individuals. We’ll see the third wave, catering to an audience of over 500 million individuals later next year.     

Do you have an opinion on DAOs and their potential role in the future of work?

I don’t think we'll see pure DAOs anytime soon, but the global pandemic accelerated the digital transformation of work and the work experience. Coupled with the rapid development in consumer markets, it is driving dramatic changes for the workforce's expectations, attitudes, and also ways of earning, learning, and spending leisure time.

I think the biggest shift employers will be challenged with is the new decentralized workforce that is emerging. It is driven not only by the changing nature of the workforce, but also by the need to unleash the economic and social potential of people and help to solve our current social, climate and economic problems.

Essentially the process of matching workers with tasks, division of labor in organizations was, until recently, a top-down allocation exercise presided over by managers. The unbundling of work will challenge this paradigm.

The early signs are already here. The remote work models, the self-selection-based division of labor that becomes the norm in some industries and the rise in gig and non-standard work modes.

This is a tectonic shift that will require us to redefine everything that we know about employment. 

Academic education seems to be broken in not preparing well enough students for the world of work. Do you agree, and if so, what do you think could be done to fix it?

It's true that people have traditionally been hired based primarily on the degree they earned, the job they had, or the people they knew. There is a noticeable shift in the last few years and Skills are now a big part of the conversation when hiring. President Biden recently called for skills-first hiring in his 'State of the Union' address and a growing number of CEOs have highlighted the need for companies to shift how they hire.

Just recently a group of Harvard Business Review (HBR) authors partnered with Emsi Burning Glass, a leading labor-market data company, and analyzed more than 51 million jobs posted between 2017 and 2020. What they have learned is that employers are indeed resetting degree requirements in a wide variety of roles.

Their findings showed that when demand for talent far outreaches supply, employers de-emphasize degrees. That became increasingly apparent during the tight employment market of the late 2010s. The authors found that Between 2017 and 2019, employers reduced degree requirements for 46% of middle-skill positions and 31% of high-skill positions. Among the jobs most affected were those in IT and managerial occupations, which were hard to fill during that period.

The talent shortage is here to stay. This means that in evaluating job applicants, employers are likely to be suspending the use of degree completion as a proxy and instead now favor hiring on the basis of demonstrated skills and competencies.

This shift to skills-based hiring opens opportunities to a large population of potential employees who in recent years have often been excluded from consideration.

The above is not to underestimate the value of structured ways of learning and knowledge acquisition using defined learning paths with objectives, structure, or formal hierarchy. On the contrary. Most high-skills jobs require a comprehensive conceptual basis before you are able to reach mastery. Nevertheless, in addition to the fact that people are getting experience and learning new skills on the job we see a rising tide of new models in the education space that are leveling the playing field, making quality educational experiences available to all.

The best educators in the world are now available to everyone. Online platforms let you access some of the best instructors in the globe. Students can easily access personalized assessment and feedback to monitor their own progress towards learning goals. Knowledge and information are now available to all for free or at a low cost. Gone are the days when education was out of reach for the economically disadvantaged. Individuals have a powerful new tool in building and proving their skills – micro-credentials. These might be collected, completing an online course, or taking a workshop on coding. Other types of digital credentials are “nanodegrees” – which involve learning specific skills to get a job. The playing field has been leveled in a way that’s truly unprecedented in history.

Given so many disruptive trends (flexible, part-time, gig-work) how do you think companies can survive and adapt their organizational models accordingly?

We see the whole notion of employment being redefined with non-standard work mode becoming the standard. Society will need to adapt to having more people work outside of traditional employment constructs, with implications for education, taxation, and labor regulations.

Before employers, we need policymakers to rethink the regulatory framework, securing better employment terms and working conditions as well as comprehensive social protection systems for non-standard workers.

When it comes to employers they need to adopt a new definition of the notion of employment. One company I have worked with in the past on their contingent workforce policies and processes claimed to have a couple thousands individuals in this type of employment. When we started looking into their extended workforce we discovered they are paying over 20,000 individuals for work they do for them. In this chaotic environment how do you even begin to account for each of their workforce, verify their identity and qualifications etc.  

It is clear that we need a new data-sharing architecture that enables secured and private exchange of digital, trusted records between the workforce and the employers. This is exactly the work we are doing on the Velocity Network Foundation. The idea of Self Sovereign personal data is not new. Now with the emergence of new technologies, all interested stakeholders are converging to deploy and connect to the Internet of Careers. 

There is a major effort that is already in play and needs to be endorsed by governments is enabling workers agency over their career reputation. If we want to build a world where every person can access personalized career and development opportunities at the time it matters, we need to support the free flow and wealth of the individual’s career reputation data (i.e., employment history, education, experiences, skills, assessments, compensation, assignments, training, certifications). This is not what's happening today.

The change we’ve seen so far in the workplace has not seen companies being agents, but simply reacting (and in a confused manner). 

Do you see the power shifting back to employees and reduction in information asymmetry (bias removal, pay transparency..) and if so, what do you think will further accelerate this trend?

One level above all other mega-trends for the future of work is the global skills gap. Employers that would want to keep and attract top talent would need to listen and change. 

The global skills gap is not going anywhere and if anything, it will only escalate. 3 of every 4 (75%) companies have reported talent shortages and difficulty hiring – a 16-year high says Manpower recent survey. Employers struggle to find talent with the right skills due to the Great Resignation, new immigration restrictions and limited labor mobility. Additionally, reskilling and upskilling efforts have not kept pace. Competition among employers for talent has increased bargaining power for employees, and churns in job markets further exacerbate skills gaps in the labor market. In response, the whole notion of employment is being redefined to reflect the changing needs of companies and changing preferences of the workforce.

New ways of engaging talent, redistributing skills in much more efficient ways emerge, and most employers are not ready for this change. Their policies, processes and systems are designed for standard employment constructs, and need to evolve to better accommodate these new constructs of work and workers or the benefits of these arrangements can be outweighed by long-term negative impacts on productivity and innovation.

In parallel policymakers must keep pace. Traditionally, labor laws have been based on the “standard” employment relationship. This is defined as a job that is continuous, full-time, with a direct relationship between employer and employee. Legislation needs to evolve, securing better employment terms and working conditions for non-standard workers. Legislation can also shape when and how often non-standard employment can be used. Regulation through national legislation, collective bargaining, and comprehensive social protection systems is key to ensuring that non-standard employment is decent work in the interest of both workers and enterprises.

Dror has been an amazing guest and been very thorough on every question, showing how much he’s already thought through these topics and is involved in this paradigm shift for the future of work and careers. I’ve personally found this conversation not only interesting, but exciting in having a peek through what is taking shape, even though it is still in its early days.

Before I leave - as promised - a poll on the next topics you’d like to see covered:

Of course as always leave any comments below for the article and please help out by sharing with friends and others who may be interested!

Thank you for reading Work3 - The Future of Work. This post is public so feel free to share it.