Growing and evolving organizations through Cloud Teams - with Raphael Ouzan
BOUNDARYLESS CONVERSATIONS PODCAST - SEASON 4 EP #5
Growing and evolving organizations through Cloud Teams - with Raphael Ouzan
According to our guest Raphael Ouzan, next year’s big thing is: “cloud-based teams”. In this episode, we dive into what “cloud-based teams” mean and analyze what perspectives such teams open up for organizations.
Podcast Notes
Key highlights
- Setting up high-performing teams driven by passion and freedom
- When focussing on outcomes, external versus internal becomes irrelevant
- The disruption of traditional employment
- The Ocean’s Eleven analogy
Topics (chapters):
00:00 Introduction: who is Raphael Ouzan
02:28 Definition of a cloud-based team
07:38 A.Team: how it works and its Business model
15:13 Insights about cloud-based teams
20:11 How A.Team guarantees that a team will work as “a real team”
24:43 On teams’ accountability
30:02 Increasing the “skin in the game” of teams
33:50 Organizational model and networks
39:55 The value of a curated network
42:36 Engaging the community
47:23 A.Team: what’s next?
48:22 Raphael Ouzan’s breadcrumbs
To find out more about Raphael Ouzan’s work:
- Twitter: https://twitter.com/raphaelouzan
- LinkedIn: https://www.linkedin.com/in/raphaelouzan/
- Website: https://raphaelouzan.com/
Other references and mentions:
- A.Team website: https://www.a.team/
- AWS Mental Model https://aws.amazon.com/blogs/enterprise-strategy/mental-models-for-your-digital-transformation
- Conway’s law https://en.wikipedia.org/wiki/Conway%27s_law
- Utopia for “builders” https://www.linkedin.com/pulse/big-change-3-content-principles-2022-joe-lazer-lazauskas-/
- Ocean’s Eleven https://en.wikipedia.org/wiki/Ocean%27s_Eleven
Raphael Ouzan’s suggested breadcrumbs (things listeners should check out):
- Adam Grant, Think Again https://www.amazon.com/Think-Again-Power-Knowing-What/dp/1984878107
Recorded on 8 November 2022.
Get in touch with Boundaryless:
Find out more about the show and the research at Boundaryless at https://boundaryless.io/resources/podcast/
- Twitter: https://twitter.com/boundaryless_
- Website: https://boundaryless.io/contacts/
- LinkedIn: https://www.linkedin.com/company/boundaryless-pdt-3eo/
Music
Music from Liosound / Walter Mobilio. Find his portfolio here: https://blss.io/Podcast-Music
Key highlights
- Setting up high-performing teams driven by passion and freedom
- When focussing on outcomes, external versus internal becomes irrelevant
- The disruption of traditional employment
- The Ocean’s Eleven analogy
Topics (chapters):
00:00 Introduction: who is Raphael Ouzan
02:28 Definition of a cloud-based team
07:38 A.Team: how it works and its Business model
15:13 Insights about cloud-based teams
20:11 How A.Team guarantees that a team will work as “a real team”
24:43 On teams’ accountability
30:02 Increasing the “skin in the game” of teams
33:50 Organizational model and networks
39:55 The value of a curated network
42:36 Engaging the community
47:23 A.Team: what’s next?
48:22 Raphael Ouzan’s breadcrumbs
To find out more about Raphael Ouzan’s work:
- Twitter: https://twitter.com/raphaelouzan
- LinkedIn: https://www.linkedin.com/in/raphaelouzan/
- Website: https://raphaelouzan.com/
Other references and mentions:
- A.Team website: https://www.a.team/
- AWS Mental Model https://aws.amazon.com/blogs/enterprise-strategy/mental-models-for-your-digital-transformation
- Conway’s law https://en.wikipedia.org/wiki/Conway%27s_law
- Utopia for “builders” https://www.linkedin.com/pulse/big-change-3-content-principles-2022-joe-lazer-lazauskas-/
- Ocean’s Eleven https://en.wikipedia.org/wiki/Ocean%27s_Eleven
Raphael Ouzan’s suggested breadcrumbs (things listeners should check out):
- Adam Grant, Think Again https://www.amazon.com/Think-Again-Power-Knowing-What/dp/1984878107
Recorded on 8 November 2022.
Get in touch with Boundaryless:
Find out more about the show and the research at Boundaryless at https://boundaryless.io/resources/podcast/
- Twitter: https://twitter.com/boundaryless_
- Website: https://boundaryless.io/contacts/
- LinkedIn: https://www.linkedin.com/company/boundaryless-pdt-3eo/
Music
Music from Liosound / Walter Mobilio. Find his portfolio here: https://blss.io/Podcast-Music
Transcript
Simone Cicero:
Hello, everybody. Welcome back to the Boundaryless Conversations Podcast, where we meet with pioneers, thinkers, doers and entrepreneurs, and we speak about the future of business models, organizations, markets, and society in this rapidly changing world. I’m Simone Cicero, and today I’m not joined by my usual cohost Stina, instead by another cohost that you already met in the podcast, with 3EO micro-enterprise lead and partner at Boundaryless, Emanuele Quintarelli. Hello, Emanuele.
Emanuele Quintarelli:
Good Morning, very happy to be here today.
Simone Cicero:
Today, we’re also joined by Raphael Ouzan. Raphael is a technologist, entrepreneur, investor. He previously cofounded Bilgard, Block Nation, and he was also involved in some not-for-profit initiatives for global tech upskilling. Raphael was also named 30 Under 30 by Forbes in Israel, and is a global shaper by the WEF. Most of all, we have Raphael with us today because he is the founder and CEO of A.Team, the world’s first team formation platform, enabling companies to form, manage, and scale what Raphael calls cloud-based teams. Today, we are going to talk about Raphael’s thesis on teams and organizations. Hello, Raphael. It’s great to have you here.
Raphael Ouzan:
It’s wonderful to be here. Thank you so much for having me. I’ve been a fan of everything you wrote so far, so I’m excited to dig into some of the underlying dynamics of this incredible transformation of how we organize ourselves as people, and as we do work together.
Simone Cicero:
So, let’s jump into the conversation. And I think we are due for an initial overview question to open the conversation. It’s really about giving you the space to describe the basic elements of your thesis. What led you to create A.Team, and what leading goes to your investors to invest- If I’m not wrong, the last round was around 50 million. So, investing so much money into developing the vision of cloud-based teams. So, what led you there, and what do you see as massively important for our listeners to share as a basis for our conversation?
Raphael Ouzan:
To me, it comes from a very personal place. And I think it’s something that we’ve all experienced in one way or the other, which is the desire to have the freedom to use our skills to work on problems that we personally care about. Because today, we’re in an economy and world where actually caring about what you do is what drives exponential results. Small problems don’t really need to be solved. They’re solved at scale, they’re solved with machines. What’s left for us to do is solving bigger problems. And I think a lot of us, we’re thinking about, we’re yearning to work problems and solutions that we care about, and with people that we actually want to work with. And that realization is something that came for me in the form of growing up accessing programming, and coding, and computers for the first time. I was a teenager in France, I discovered that you could do things with those machines, and you could essentially have the ability to change the world around us, to have an impact, bring ideas to fruition using technology.
And that was actually a relatively easy way compared to the other ways of building things. As a kid, you can’t exactly build a building or a bridge, but you can code a little piece of software. That made me realize that that is what I want to be doing. And the beautiful thing, getting more into the tech world, at first in ways of freelancing – the internet was becoming a thing, everybody was getting excited about this. I was a computer kid, so I would get a bunch of projects, and I would freelance for a bunch of companies, SMBs in particular, and emerging startups. What was very interesting was that it felt somewhat like a meritocracy. The best ideas would get traction, and if you could build things people would join you, and team up with you, and do things with you. Unfortunately, I realized that doing this by yourself doesn’t get you that far. So, at the time, working in the cloud was not exactly a thing. So, I had to move, I ended up in Israel.
Then I went to the military in Israel for five years, being tasked with things that would otherwise feel impossible if it wasn’t for the teams that were built and designed around us. So, when I left the military, I realized that I knew what I wanted to be doing – I wanted to be able to work on problems that matter to me with people that I want to work with. At the time, it came in the form of building startups. But many years later, I realized that insi.ht, that people wanted to be able to not be stuck in rigid structures, but actually work on problems that matter to them with people they want to work with. That’s something we all want. And therefore, we ask ourselves the question: could we enable the formation of highly-skilled, high-performing, highly-motivated teams of people that choose to work together on a particular problem? Can we enable that to happen online? And with that, the idea of cloud-based teams emerged.
What we found is that it saw significant traction from some of the most highly-skilled product builders out there – product managers, designers, engineers, data centers, growth marketers that felt stuck in jobs that they like, but they don’t love, or they felt like they were not fulfilling to them, and they would want to pursue their craft with autonomy. Now, there was this thing called gig economy, online work, that has been going on for quite a while, and has been quite significant. But when you think about the platforms out there, from Uber to Fiverr and Upwork, they’re great platforms, but they’re very much capped at simple tasks. That’s not exactly where you go if you’re looking for self-actualization from a professional standpoint. And we felt that the solution was in teams, because the problems we’re solving require a set of diversity of background, expertise, skills and motivation to come together in a somewhat efficient way.
And I think we all know that in the creative world, in the knowledge economy, the core unit of work is actually of teams, but teams, for some reason, have never been productized, particularly not in the world of online work. And that’s what we set out to do, and we found that that was very attractive to highly-skilled people, but also that that enabled use to establish a building block that enables companies to innovate and scale, and move further, faster, in a more cost-efficient way, that we need to level the playing field, enable companies to build what’s next. So that was the premise behind the beginning of A.Team.
Simone Cicero:
If I can complement this question, and ask you more practically how A.Team works – so, is it a marketplace, is it a managed marketplace, is it a product? What is the business model? How can companies typically interact with A Team? So, from a perspective of business model and product model, can you maybe clarify a bit of what A Team is about?
Raphael Ouzan:
I think that anyone who’s listening who’s assembled a team would know that this is a very lengthy, time-consuming, challenging process. You have to figure out the right people, you have to get their buy-in, you have to bring together different people with different skillsets, you have to actually work well together. If you make a mistake, it’s hard to change. It takes a while, and it’s full of friction. And what we’re trying to do is make it as simple as possible. So, this is the way it works. It’s a members-only network. So, companies have to request access to be invited by one of the members of the network of investors that we work with that provide access to their portfolio companies. And as they come in, they speak to our advisors that use the platform in a self-serve fashion, where the first step is to essentially set up a mission, meaning an outcome that you’re trying to drive towards. It could be a strategic initiative you’re currently working on, or it could be something that you’d like to spin up.
But using our tools, you can set up a team spec, essentially the composition of the roles that would make up the dream team to execute on this particular initiative. It could be a product manager with that type of experience, a designer, developers, data science, whatever it may be. You have templates for basically every industry, whether you’re in fintech, crypto, ecommerce, healthcare… And once that’s set up – and that typically takes very little time – we also have a team of team advisers that are aspects in team compositions, that can help you understand where the gaps are, and where you could either expand on existing teams or create new teams. The team specs go to the platform using something called a team graph, that captures who works with whom on the curated and vetted network of A.Teamers, and identifies the ideal cluster of people that will make the best team for the particular challenge. Then you get a proposal that shows you the best team for the job and why.
Here are the people, what they’ve built, what they’ve done, how well they can work together, but also why they’re excited to work with you on this particular problem, and each member’s hourly rate that they set themselves. So, you can interview as a team or separately, and it’s easy to get started. The platform handles everything from payment and tracking, expansion of the teams, scaling up and down as the needs evolve. And the A.Teamers integrate directly with your workflows. Whether it’s Slack, Github, etc. And you see companies having many A.Teams that are empowering pretty much every one of their strategic initiatives, enabling them to build better, faster than ever, in a way that’s cost-efficient, and manage their teams in a very easy way. The payment, compliance, and everything in the backend is automated and set up in a very easy way, so that whether you have two A.Teamers or hundreds, you get one consolidated bill, you pay to one place, and A.Team does the disbursement all over the world to the relevant people.
In terms of the network, this is a highly-vetted network that is by design hard to get into. The easiest way to get into A Team is for someone who’s worked with you to give access to you. And there is an application process with multiple levels. Today, there are about 7000 vetted, highly skilled product builders across different disciplines, across many industries, people that have left many of the tech giants because they wanted to pursue their craft with autonomy and work on really interesting things. Today, if you’re part of A.Team, you can work on things from the software that manufactures the COVID-19 vaccine, to the next crypto innovation, to working with incumbents to enable them to become themselves tech companies pretty much overnight. It’s kind of a dream and utopia for builders, and that’s what we’re trying to build. In terms of business model, it’s very simple. There’s basically a marketplace fee that we collect on top of the hourly rate of members.
And with that, the teams, we find, that are opting in to work on particular problems and particular challenges of their choosing, are actually quite long-term. One year, year and a half, two years, sometimes even longer. Because that’s how they enjoy going through the motions of building through iterations, transformative new products.
Simone Cicero:
I guess it’s managed. You help the companies find the right team. It’s not that they engage with 10 teams, negotiating, and then decide what to pick. It’s more like you actively select teams for the background and connecting them for customer requests. Am I right?
Raphael Ouzan:
So, somewhere in between. The whole experience is designed to be very premium. What we’ve found in many of the online work platforms is that they’re very quickly becoming very commoditizing. If you see a search result- You know, on A.Team, there will never be a search of, ‘show me reactive helpers’, and then you see 300 pages, and I’m one of those people. That’s not great. Instead, we’ve built the machinery through the team graph data that knows how to identify the relevant cluster of people, enables them to choose to opt into this particular mission, either by bringing people that they’ve worked with before, or people that the system believes they would work well with, set their rates, and then it’s market dynamics that apply. So, the system is very much geared to give you that premium of experience that shows the right team for the particular challenges that’s at hand, so you don’t have to browse around, go through search results, and all those types of things.
Simone Cicero:
How persistent are these teams? Do you have people that stick to a team for the long term, or are teams always dynamically set up by the platform.
Raphael Ouzan:
You see both use cases. You see a third use case, which is people coming in as a team already. They like working with one another. But typically, what’s interesting about teams, when you think about that unit of work, that’s something that is dynamic. As a particular mission goes on, if you’re building a particular product, momentum picks up. You need different types of experts, different types of people, and the ability to be ad hoc based on the need and evolve over time is really important, to keep fine-tuning the team and make it the most effective for the particular stage of development. It could be that you start with exploration, where you don’t actually know what you’re building yet, you just have the beginning of an idea or an opportunity, and you need an exploration team that will go and pick this up, figure out different prototypes, test things with users. Then you have the larger execution, which typically becomes a larger team, and eventually you have certain levels of maintenance that need to be maintained.
And for that, you have different templates, and the teams that come together can either be people who love working together, and then complemented with additional people that can work with them, or any use case in between, anywhere on that spectrum of ‘worked with together’ or ‘could work well with together’. And the exciting part is that you have this social experience of being able to find your workmates, your next work husband or work wife, and that’s pretty rewarding, to find people that you enjoy working with, but also to be able to work with people that you already know you like to work with. We find that that brings a level of social experience that’s pretty powerful, as we try to rethink how work happens.
Simone Cicero:
That’s extremely fascinating for me, because forming teams is probably one of the key functions of the organization. So, I’m really looking forward to continuing this conversation.
Emanuele Quintarelli:
Do you have any insight about the kind of work that is a better match for a cloud-based team structure? What’s the amount of complexity of the coupling among the tasks that would really work well with what you’re doing? And if there’s anything else that maybe is not a good fit?
Raphael Ouzan:
One of our angel investors, the founder of MuleSoft, told me something early on, as we were getting started, that really stuck with us. He said, at first, there’s going to be a lot of questions about cloud-based teams, in the same way there were a lot of questions and concerns about cloud computing. It’s a new model, people don’t exactly know what it is, and there are a lot of questions around it. But, over time, you’re going to see more and more companies using it, and then you’ll reach a point where they surprise you in the way that they’re using cloud-based teams. So, I’m going to answer your question, but with that in mind, I must say that we’re constantly surprised in the ways that people are using cloud-based teams, and are figuring out new and better ways to use that new building block. Some of the classic use cases are the development of new transformative products.
Especially as we think about the market condition today, we are asked to do two things that are potentially conflicting: one is reducing costs and overhead, because of the downward pressure of the market, but on the other end valuations are now much harder to get to, so you gotta build high-margin products. So, you have to build better, faster, and yet spend less and be more flexible. So, that’s a core use case for A.Team, when you want to build new revenue streams or get closer to your customers. And that’s where A.Teamers can really help. They form around existing teams or form new teams altogether, with the market opportunity at hand, and outcome, trying to drive with an existing product or a new one, and they help build this up. Another type of use case is when there’s a particular gap of expertise. Companies are scaling in particularly technical areas like video streaming, or payment, fintechs, et cetera, building certain types of infrastructure.
That’s where it’s very powerful to bring some of the best experts. Because out of the 7000 people that are currently on the network, you see people that extremely deep expertise in particular areas, that have seen so many different environments and ways of doing things. It’s extremely powerful to be able to bring the 10x type people to your teams. That’s very powerful to help advance initiatives better and faster, but also very fun and useful for the rest of the team at the particular company that is working with an A.Team. it’s great to see people that have different backgrounds, that have different perspectives, that have seen different things, in particular because the typical A.Teamers have trained that agility, they’re microentrepreneurs of sorts that are taking the long set of diverse experiences, versus a typical engineer or product manager that has spent 10 years at Google, for example, that have seen one way of thinking and one set of tools. I think the best example for some of what the A.Teams can do is A.Team itself.
Because of course, A.Team is built with A.Teams. And the reason we could quadruple the size of the team in 11 months is because we’re using A.Teams to build A.Team. So, we have teams today that are building the core engine, and team formation engine, and all the team graph stuff that we talked about. We have teams building the customer side platform, the builder side platform. We have teams that are building the ledger behind it, and the financial and payment infrastructure. And the way we think about things is, we have the overall goal that we’re trying to accomplish, then we break it down into outcomes, and then each outcome- basically, the question that you ask is: what is the right team for the job? And that team will form with a mix of full-time employees with A.Teamers that are coming together that opt in to work on this particular problem, and that want to see it through. Now, lastly, some of the things that surprise us with A.Teams – we see companies that are using A.Teams as red teams, that are competing with themselves in a different way.
For example, you see older companies that are bringing A Teams to build a digitally native version of their company, sometimes even under a different domain name. It’s kind of crazy to see that. I personally never thought of it. Or you see A.Teams that are being brought on to figure out what the next feature could be, and do dozens of prototypes to figure out where they’re going next, and what would work well. So, we’re beginning to see how that works. We’ve worked with 300 or so companies, from early-stage startups to Fortune 500. We’re still very much at the beginning. This is, as we know, an absolutely immense market.
Emanuele Quintarelli:
I can see a huge spectrum of possibilities here, some of them even emerging while you interact with and support your clients. How do you guarantee that a team is a team? Do you also look into the interactions, the relationships within a team, think about the decision making, how decisions are made, or do you consider the team more as a black box, something that can provide some services to a client? Do you look inside, or do you just look at the team as a unit?
Raphael Ouzan:
I think a good mental model for us is AWS. When cloud computing was picking up, it was weird and concerning. ‘What do you mean I can’t even see my own servers? And other people can run code on it? Where are they even located? I can’t really manage them, and go to them, and plug in a cord to monitor it’. And then, it just went on to build the level of instrumentation, and transparency, and visibility and tooling, that far surpasses what you can have with even servers that are in your basement. And we’re building essentially the same thing for teams, where every iteration we’re building more tooling to help the team to essentially track, monitor, manage and optimize teams. So, examples of that might be measuring the performance and the health of the team. There are cycles of team posts that are gathering data, both from A.Teamers about each other, and about the stakeholders that they’re working with.
You have the ability to track costs, and see the costs of certain initiatives as a result, which provides an overall transparency which I don’t have for full-time employees, but I do have with the A Teamers working with us. You constantly have this system in the background that analyzes potential burnout, or peak capacity, or underutilization. I also get reports that show me- I currently have these three people, one is at capacity, and here are additional people that could join the team that could actually do well because they’re in your tech stack, and they can work well with the people that you currently have. So, with a couple of clicks, I can expand my team. This is the type of capability that can only be created by productizing teams, which is what we’re constantly working on. And that’s why I say, productizing teams is something that, for some reason, is new. And when we started the company, we thought there were a bunch of companies doing it, but there weren’t. I think it’s because it’s hard.
But every day we’re gathering more and more data and we’re building more and more tooling. Part of it even has to do with academia. We work with the matching director of future of work at HBS. We work with behavioral scientist and Professor Dan Ariely. We work with Adam Grant. We actually have research with Adam on team effectiveness and “gel test” that we’ll publish later on. Now we have all this data and all these use cases, and we can get to understanding and optimizations of teams that are very powerful, that have to do with the tooling, but also with the onboarding, and how they’re set up, and how communication is done, and how knowledge management is done. So, it’s really just the beginning. But it’s interesting. 2023, with what’s going on in the market, is going to push every company to think about efficiency. And this need of doing more with less is something that’s on every company’s mind, from tiny startups that are trying to fundraise, to the CEO of Google.
And that requires better tooling. That requires thinking about teams, really. Is that the right team? Is that working well? How can I move some costs from fixed to variable to increase efficiency? How can I bring expertise that I need to push things forward? How can I have leaner and more focused teams that can drive outcomes back into ROI, versus being functionally separated into departments? I think 2023 is going to be a big year for teams, because that’s where all the eyes are going to be focused on.
Simone Cicero:
To be honest, that’s super-exciting, because it seems like a vision that we have been praising so much in the past, that of boundaryless organizations- it makes sense, when you look into the thesis behind A Team, this idea that you can leverage on external teams in a way that makes your organization very much prone to scale faster and easier. You spoke about hourly rate, the idea that you can plug a team inside an organization and then pay the team by the hour, which is what I got from your explanation. But normally, when you have teams inside an organization, they get maybe a salary, but they also get some other elements of clearance. For example, there is a certain accountability to set KPIs. Maybe you have variable pay. The most advanced organizations at the moment are the ones that we are working on, for example, with our 3EO framework. They also often share access to equity of the product being built.
So, what do you see in terms of increasing the accountability and the clearance of the external teams? Because the problem I see is that, if you just think about paying the hourly rate, and then letting all the complexity of having an internal team be into the catch-all of this hourly rate, the risk is that you’re going to pay a lot of money to this external team, because there is a lack of integration of the team. So, essentially it’s like the fact that it lacks integration, you have to pay a much higher hourly rate.
Raphael Ouzan:
I actually quite disagree with that. I think that there is a much higher level of accountability with a contracting framework that is based on an hourly rate, simply because you can be cut at any time if you’re not worth what you’re charging. So, you actually have way more visibility into that. In order for me to pay the bills of the different A.Teams that we use, I basically track and see what is being done, what is being worked on. With full-time employment, there’s a level of abstraction that doesn’t let me see that in a clear way. Two, with mission-based work, meaning outcome-driven and team charters to accomplish an outcome, that’s when you have the highest level of accountability, because the question is, is this team, whether external, internal, A.Team, full-time – it doesn’t matter – is this team driving the results towards the outcome that we’re trying to build towards?
For example, increasing monetization, increasing net revenue retention, building an ability to charge and create value for a customer’s new revenue stream. When you structure work this way, that is basically empowering cross-functional teams to have high ownership over an outcome, my question as a leader is very simple: is this working? Do we still want this outcome? If the answer is no, I disband the team, and I can do that quickly. Or if it’s not working well, I can optimize the team and change things around, but I can constantly track how this is going versus that outcome. So, in fact, there’s much more accountability. Now, when you come in- Think about how the model works with A.Teamers. These are people that have a lot of options, they’re really good at what they do. Even in a tougher market, the most highly skilled have way more opportunities than they can possibly dedicate their time to.
So, we have this recommendation engine within the platform that learns what you would be interested in, who you would like to work with, and you help train it. So, when you go into a mission and work on this particular program, when you integrate the organization- because you do integrate the organization, it’s not a siloed team that’s outside the boundaries of the company. It becomes very much part of the company. You don’t care about anything that is the typical organizational politics and challenges of- you need to look good to get promotions, you need to deal with all kinds of internal politics… All you’re measured on is whether you’re driving towards that outcome. So, in fact, there is full dedication towards accomplishing something, which is very powerful. And the best companies, when you talk about boundaryless organization, I agree with that, but that’s why I wouldn’t call those teams external.
This works, and we encourage every company that we work with to integrate A.Teamers into the full workflow and life cycle. So, we see plenty of companies that taking the A Teamers on off-sites with them. They’re very much part of the company. Except they chose to work on a particular problem and a particular mission within the company and see it through. Does that make sense?
Simone Cicero:
Yeah, a lot. But what I meant when I asked the questions is that when you transactionalize this relationship between a team and an organization, you make it transactional to some extent because it’s an hourly rate, it’s something that you can cut at any point, there is no longer commitment. It’s more like a dynamic utility. You make this idea of cloud-based teams, and cloud is by definition the most utility pattern. It’s something that is available everywhere, it’s cheap, it’s easy to cut, and so on. So, it makes sense from a performance perspective, but the point that I was raising is, how do you increase the skin in the game that the external team you are hiring…
Raphael Ouzan:
I would just say that cloud services are typically not cheap, but they’re cost efficient. AWS is not cheaper than buying your own servers, it’s just more cost-efficient in certain use cases, and enables you to do things that you wouldn’t be able to otherwise. That said, I very much agree with the skin in the game. I think it’s very meaningful. We’re just rolling out and piloting something called A.Team reserve, where companies can, after an initial period where both A.Teamers and the companies are getting to know each other, and they figure out the momentum, and they want to stick with something and it seems valuable for them, where you can set up longer term packages, essentially. So, you can set up six months, 12 months, et c. And as part of that, you can offset certain things with equity, because there’s nothing that prevents even the law to provide equity to your contractors. And that’s what a lot of companies end up doing.
When you think about the transactional nature of employment, that is seeing the most radical transformation. Because for the longest time, the transaction, the social contract with companies was, I’m going to let you decide what I do, where I do it, who I do it with, and you’re going to give me stability. That’s typical employment. Now, this illusion of stability has been shattered. It was shattered in May 2020, when COVID first started, and companies thought the world was ending, and therefore they let go of everybody. And a month later, they were like, ‘oh, I guess the world is not ending, please come back’. And now, again, people are getting laid off. Some people have been laid off twice or three times in two years. And if it’s not them, it’s their friends. Therefore, that illusion of stability is broken, and the employer-employee relationship is fundamentally disrupted. So, there’s no real difference. When you think about an employee, especially in America, you can let them go right away. It’s at-will employment.
Contracting is exactly the same thing. Now, skin in the game is something powerful, and you see that companies are using that with A Teamers. That’s really great. We’re trying to mechanize this, and make it easier to do. And it’s something that people find very rewarding. But a lot of people over the past couple of years have been burnt with promises of equity, because there’s this ultimate asymmetry of information, where there’s an employee or contractor getting equity from a company, from the board of a company. The board has access to the entirety of the information, and the waterfall of capital, and the decisions of how we would be valued, essentially. And they give you those units, and they tell you those units are worth big numbers. A lot of people found themselves holding the bag, on paper being millionaires, and actually being underwater. Especially now, when valuations have been slashed. So, we find that a lot of A Teamers, they really appreciate equity, but not as a full replacement of being paid for their work, but as a good bonus, or skin in the game type of vehicle. We certainly are looking to integrate that. And we’re also looking to integrate more of the upside into the network of A.Team. And that’s something that we’ve been building up, and we can talk about it if you like.
Simone Cicero:
That’s great, by the way. Because when I spoke about accountability, you can look to that from the perspective of having this pending challenge of always trying to justify your value, but you can also have it from the perspective of, ‘I’m co-investing into this a little bit, I’m putting some of my extra effort because I own some equity of what we’re going to create together.’ So, I think it’s a great point. When we speak about the team, we speak about a few people, I guess. Four, five, 10 – maybe this is something you can clarify. When we look into how organizations structure their divisions that are normally connected with a product, there is a system of teams that they normally leverage. So, for example, if you think about the emerging patterns from the DevOps community, you always have streamlined teams, and then you have platform teams, and maybe you have support teams.
I was talking with Casey Winters a few weeks ago, and he made the point that sometimes you organize a team around core work, innovation, technical scalability. So, there is a diversity of teams that normally are distributed across templates, that allow you to ship the product. And somehow, Conway’s Law tells us that you ship your org chart. So, for example, when an organization hires teams to ship a new product, I guess it’s a system of things that they need to set up, not just one team. Or maybe the one team works for a few weeks or months, and then you suddenly hit this barrier, and you need to scale up by specializing teams into a system. You also spoke about a network of teams, that you’re looking into this idea of creating network effects. So, maybe these two things can also be connected. Are you seeing something like that, or are you looking into creating some kind of superstructure on top of just hiring a small team?
Raphael Ouzan:
So, first of all, on the organizational models – we’re big fans of Casey Winters, and the founders of Eventbrite are angel investors in A.Team as well, and great mentors of ours. There’s this incredible transformation of the structures of companies. In the past, it used to be that leaders thought of their companies as departments and headcount. So, essentially, you would come up with a spreadsheet of the people you need and you would fill up those ranks. Then, you would have projects and tasks, and you would try to map out projects and tasks with the current workforce. Then, every now and then you would have to do adjustments, so you would let go of people. That’s how most companies used to work. Now, this is fine if you’re doing commoditized work. But this actually doesn’t work for where you need the top talent to really frame their motivation in the goals to be accomplished and the deliveries to be done. And you see forward-thinking companies that are thinking more and more in terms of initiatives and outcomes.
What are the outcomes that I need to drive towards? And therefore, they ask themselves the most important question, which is: what are the right teams to accomplish those outcomes. And when you start thinking that way, the framework of internal versus external doesn’t really apply anymore. It doesn’t matter if in your team you have part-time or full-time. The question is whether you have the right team for the job – yes, or no? And that brings power to teams that are empowered to own a particular objective that has in itself an ROI. That means that the teams are cross-functional, and have the right skillset in order to deliver on an outcome. That means that budgeting outcomes becomes much easier, tracking the efficiency becomes much easier. And that’s where we come in. that’s where we can really plug into that framework. So, we see that transformation being very interesting. And also, frankly, it’s basically the best way to attract and retain talent. Whether full-time or part-time, it doesn’t matter. And the reason for that is, if you hire me into your 600-person company as an engineer, it’s not very appealing to me to be engineer 230.
However, I will care much more for opting into a particular mission that you’re working on, and a particular outcome you’re trying to drive. I like the company as a whole, but I really care about solving this problem with these people. That’s where people opting in are actually retained much longer, because they’re here for something that they care about. So, that’s on the structure of companies, and I think we’re going to see much more of that as companies are challenged to move much faster with much more efficiency. So, that’s on organizational structures. Now, there’s a meta structure to the A.Team network that’s quite interesting. So, we have started the company focused on bringing this new resource into the world of cloud-based teams. But what’s powering this whole thing is a network called the team-driven network. A mental model for this is basically the utopia for builders. Now, who are the builders?
Of course, they are people with a craft that join the network as independent builders, but also the builders are the companies that work with A.Teams. They’re no less builders. And in a way, we’re trying to create this environment where the best builders get to team up with one another to build the most meaningful things being built right now. And that is why we curate both the companies coming on to the network, and the A.Teamers coming on the network, and we’re trying to create those dynamics that enable them to team up effectively. Over time, what we’re really after is making the A.Team the best place for the best builders. Once you’re a part of it, you get to work on the most interesting things with the best people. And that’s why community is very significant for us. We spend a lot of effort trying to build up communities, both in a localized way – we have people in dozens of countries, and we have gatherings in every major city, but we also have micro communities around particular topics of expertise with some of the leaders in that space, whether based on industries or a set of expertise. So, you find yourself in something that actually looks like being part of a company, which brings the benefits of being part of a company with the benefits of being independent.
Simone Cicero:
It’s like creating a huge network-based consulting company that doesn’t provide you salary, but provides you an enabling environment so that you, as a team, can connect with the best work that comes from the side of customers. It’s more like a sort of managed marketplace that provides the benefits of being part of a company, or at least part of them, together with the independence to choose your mission and not to just be told what work to do.
Raphael Ouzan:
In a way. I would think of it more as a curated network. And when you think about companies, they start to look more and more like networks as they scale. And the way governance works with networks is to bring power to the edges, which in this case are teams. There’s value in a network not just for- so, the edges are doing a particular type of work that they find interesting with builders from companies, with A.Teamers, but also benefit from the value and the support of the wider network. And the network provides you, essentially, the benefits, and status, and support systems, both socially and professionally, that enables you to thrive. I think it’s even hard to name it and label it at this stage. I think it’s an ongoing experiment from the future of networks and organizations, and that’s something that we’re building not by ourselves, we’re building with the network on an ongoing basis.
So, we have those ongoing calls with different A.Teamers that are helping us shape how a network would enable them to do the best work of their career with their favorite people, earning well while doing so, with full autonomy. Enabling them to grow as professionals, and grow their wealth by building what’s next. The big gap in order to make that happen, the big thing for us to solve is – how do you share the upside into the network? A Teamers are not mere users of the platform. They’re members and partners of it. Now, people get really passionate about shaping the future of work that they want to be a part of. So, in a way, we benefit from that tremendously. And sharing the upside is really significant for this, and we started building a mechanism to do so, but there are still a lot of questions on how to make that work in a compliant and scalable way, but we’re very much on it.
Emanuele Quintarelli:
Can you tell us a little more about the upsides? We are very much into having skin in the game, having employees no longer acting as employees but more as entrepreneurs, both in terms of risk and rewards. And we see lots of interest in letting people self-express, and benefit from it. Can you tell us a little bit more about your thinking, what you are envisioning in this space?
Raphael Ouzan:
I’ve had the opportunity to work a lot in crypto, actually, for the past many years. And I found that fascinating, because it enables you to create and empower networks to align incentives. And when you think about coordination between people- and that’s what’s fundamentally around teams. By yourself, there’s not much you can do. But, if you get organized with different groups of people, you can generate value that is exponential. So, of course, I’ve been looking into that a lot, and I think that the future of work is an excellent use case for this. So, we’ve been looking at some of the learnings from the paradigms in blockchain and crypto, and applying them in the very first principle basis. So, for us, first and foremost, it’s about capturing the value being created by the members in the network. And that’s what we started rolling out.
Inside the platform, you can see how much value you’re creating for the network by way of bringing A.Teamers that are working on different A.Teams, or bringing companies that are working with A.Teams, and you can see people that actually stand out and work hard to build value, and we can capture that value and quantify it. Another part of this – as you see people that are really active and are really contributing a lot, very much like partners, is to bring them into the governance of the network. So, we’re building this A Leader group of people that are contributing a lot of value, and we’re working with them, and asking them: how can we provide more value? What should be the future of the community, of the network, of the company? In fact, we had a bunch of A.Teamers participate in our Series A individually, which was pretty cool to see, and more people that are asking us to do that. So, another question is, now that we capture the value that is being created by A.Teamers, our goal since day one has been to be able to translate that value creation into a share of the upside of the network.
Now, technically speaking, how to do it, it’s a question. We can go and think about a lot of the crypto models. I actually think they’re not very established yet. They haven’t really been proven. So, we’re really trying to go at it in baby steps, and really thinking about the fundamentals here. That’s what we’re working on with the community. So, we’re working with A.Teamers, trying to figure out how to build this up. And ultimately, we’ll find a solution to do so. And the goal is very simple. You gain status and reward into the upside being created by the value that you bring into the network.
Simone Cicero:
That’s great. It’s really interesting. On this podcast, we had the team at Brain Trust twice. I believe you know them well, and they are probably pioneering the ways in which you can engage your community into essentially taking part of the governance and shaping the platform. So, really, I encourage you to go that direction, and I’m really curious to see how you manage to do that. Also, considering your study of the capital you raised and the promises you made to the investors, this is going to be very interesting. This was a very enlightening conversation around where the future of organizing can go, and clearly a testament of the increasing role and capability that teams are obtaining from this unbundling of this Fordist bundle that kept industrial organizations together for most of the last century. So, it’s really interesting to see how software infusing in organizations is creating different patterns and totally new ways to look into the organization. So, we are excited to follow A.Team’s work. So, maybe as a closing reflection, I would ask you to do two things. You spoke about this a lot, but saying a bit more of what people can expect from A Team in the coming weeks and months, maybe new features or new directions. And after that, if you can add a couple of breadcrumbs.
Raphael Ouzan:
So, in terms of what’s coming up, we just soft launched the CXO network. So, it’s A.teams/cxo-network. Which is pretty fun, because we’re seeing more and more senior executives that are distinguished in their expertise in a particular field, and in their ability to form teams behind them, and lead teams, that are joining the A.Team network, and that are looking for interesting challenges. So, they’re coming into companies and trying to help them translate vision into action, into the teams that can actually build those things. So, that’s something cool to check out. This is transforming companies in ways that were never available before. And it’s the type of expertise that is perfect to come in a particular time. We use the analogy of Ocean’s Eleven. When you do a casino heist, you bring Danny Ocean and the rest of the team. Or Sandra Bullock, even better. This is essentially the same from software, hardware, and product development.
In terms of breadcrumbs, I used to think that it was very helpful for people to learn to code, because it gives a framework to understand the world around us, and to modify it, and to improve it. Actually, one of our dearest investors and advisors, Adam Grant, wrote a book called Think Again, that urges us to use the scientific method instead of blindly holding on to what we think is true, and beliefs that are actually not based in fact. And I think this read is absolutely critical at a time like this where we’ve never seen so much disruption. And clearly, we’re in a time of extreme pace of change, and it requires all of us to rethink the assumptions, and to apply the scientific method to the facts that are at our disposal. I think companies right now are transforming because they have to. We’ve been talking about that for a while. And we knew that the models were broken, but it was okay to ignore it.
Now, with the waves that we’ve just been through, and the waves that are coming, namely COVID, and the Great Resignation, and quiet quitting, and this unbelievable market pressure, it’s really time to rethink the future of organizations and how to do more with less. And that requires to think again, everything that we felt was taken for granted. And similarly, as the future of work is unfolding in front of us. Now we have many questions that are rethinking what was so clear to our parents – that full-time employment was a synonym for safety. We realize that’s no longer the case. We also realize that the ability to choose what we work on and who we work with is extremely meaningful for our own fulfillment, particularly if we can afford it, because we have certain skills that can generate really significant results and value in the world. And for an organization to think about how to thrive, despite the fact that the only certainty today is uncertainty.
That actually makes me very optimistic, because we have what it takes to adapt and evolve, and make the changes required to go into the deeper truths, and to rethink our models in ways that we can build what’s next. And when everything looks crazy, and uncertain and upsetting at times, the best thing we can do is to team up and build things.
Simone Cicero:
If I can add one thing, I really urge people to go to the website and check out your 2022 tech work report. It’s very informative, and gives an overview of the trends you spoke about. I want to add again how great this conversation was, challenging and meaningful, and at the same time practical, the thesis and the mission behind A.Team seems to me. So, I really encourage people to catch up with your work, with your company, possibly asking for your help and finding teams to be added to their structures. There’s a lot of resonance between the work you’re doing and the work we’re doing. So, I’m really thankful for the chat. I hope you also enjoyed it.
Raphael Ouzan:
Very much so. Big fan of your work. Maybe we should have you write some stuff. We’re building this really interesting blog called mission, A.teams/mission. I think we have a lot of similar ideas. We should talk about that soon. Thank you so much, this was a fascinating conversation for me as well.
Simone Cicero:
Why not! Emmanuele, thank you so much for your insights as well, as always.
Emanuele Quintarelli:
Thank you, really a pleasure.
Simone Cicero:
For our listeners, I encourage you to go to the website, boundaryless.io/resources/podcast, where you will find this episode. And of course, don’t forget to always think boundaryless.