EP 277 – Aram Mughalyan – co-Founder of Solidate – A Bank Account Feels Like a Basic Human Right

Read the best-effort transcript below (This technology is still not as good as they say it is…):

Michael Waitze 0:05
And now we are good to go. Okay, we’re on. Hi, this is Michael Waitze. And welcome back to the Asia Tech Podcast, we have Aram Mughalyan. And I get the right Mughalyan? Mughalyan? And I think he said with us today, Aram is a co founder of Solidate, we’ll get to that as well. It is great to have you on the show. And before we jump in, let’s give our listeners a little bit of your background for some context.

Aram Mughalyan 0:29
I, Michael, thanks for having me. I’m a founder, I’m an athlete. I’m a creator who’s lived in 12 countries and has been to 50 plus of them. And I’m in this journey of building things and pursuing uncommon things. If I have to summarize that this summary, but I’m happy to go into more details during this podcast.

Michael Waitze 0:55
I love it. Let’s talk about the athlete thing for a second. I think this is really important. You know, before we started recording, ask you how tall you are. And you’ll see why I cared. Now you weigh 105 kilograms, and you’ve lost 30 of them. So now you’re 75 kilograms, which for guys, 180 centimeters is pretty good. Just so you know. And I didn’t tell you this before we started recording. I’m 10 centimeters shorter than you. But I weighed 81 and a half kilos at the beginning of 2022. And I weighed myself this morning, and I’m 67. So it’s a hard journey. Talk to me about like, why you cared? And what get you down to 75 and how you stay there.

Aram Mughalyan 1:40
So just a small correction, I think I was closer to 110 during the peak. And then I went down 45 kgs. And I was closer to 7576. Ish. And yeah, I’m 180 centimeters. The journey was that I was not always this guy. I was not always this guy that was running, ultra marathons doing 1000s of pushups a day and running shirtless in sub zero temperatures for hours and doing other crazy things that for many people, it would be impossible. Right? There was a point in time where I was again, yes, you mentioned overweight, and I was feeling unhappy about myself. I was doing these easy and fun things, which is I love food. I am a big foodie. And I was eating food all the time, several times a day of barbecues, kebabs, you know, sweets, etc. And the more I was eating, the more I was going down this path of gaining weight. And at some point, I was like, You know what? I’m kind of overweight already. So why do I even care? So I kind of let it go down.

Michael Waitze 2:56
So you actually made an active decision. You’re like, I’ve already lost this game. If I’m going to lose it, then I’m going to just enjoy myself in this context. You know what I mean?

Aram Mughalyan 3:07
Yeah, exactly. And it happens step by step. Like when you’re 75 to 80, or like, okay, it’s not a big deal. It’s just five kg. And then from 80 to 85, it’s again, it’s five kg, and incrementally from 75. We can get to well over 100. And then, at some point, it was during the New Year. I just got on the scales, and I’m like, holy, I’m like 110 kg, and my friends are like, wow, and that kind of hits me. And and then I was like, I just went home and I’m like, man, you know, like the weight my friends looked at me I was like, what they kind of looked at then they’re like, oh, man, you’re kind of lost. There’s no hope you would get sealed ever get back to where you were. And that kind of hit me back. And I started to get on a diet I lost some weight and I didn’t go all this journey in one go. I just lost some weight. And then I got up and then I lost the the tie when I lost it and never gained it back was during the COVID in 2020. When Yeah, at that point, I had broken up with my girlfriend and I was feeling alone. I was lonely. I was at home. I was having some, you know, I was not in the best mental shape. Let’s put it that way. And then I came across this book by and former US Navy SEAL former athlete His name is David Goggins. I came across his book, it’s called can’t hurt me. And his journey was exactly the same. He went down from I think 300 pounds to 180 pounds. And in a matter of three months, and then he enlisted into US Navy SEALs, which is one of the most elite divisions within the US military and his example out absolutely inspired me. And then I remember my first day I put on my shoes, I went down and I said, Okay, I’m trying to run. I couldn’t run more than 300 meters, I have to stop. My heart was racing. But then I put a simple target. I said, I want to run five kilometers, in under 30 minutes. And I give myself a timeframe. And then I started doing and then the next day, I did like 450 meters the next day, 400, and so on, then, and by making small baby step gains, and keeping a rigid discipline, I think within four or five weeks, I was able to do that five kilometer amount of for the minutes. Wow. And then I was like, Okay, I did that. So why not try 10 Count, like 10k more, you know, and like, a couple of months later, I did 10k. And then I’m like, You know what, there is like, I want to try health marathon, so why not? And then I did half marathon and then the full marathon distance came and, and then after that, I’m like, what if I tried to all the crazy things, when I started preparing, I mean, I started training. It was summer, and then about five, six months later, it was winter. So I’m like, You know what, I don’t think I need winter gear. I can literally run in my summer gear, which means a pair of shoes shorts that said, I was running shirtless. And at some point, I remember it was like minus 16 Celsius outside, I was back home in Armenia. And I decided to go out and do my longest run. When I finished the run, it was a 25k. I realized all the hair on my diet. Were like literally frozen. I couldn’t I couldn’t move my fingers. Because it was so cold. Yeah. And by the way, when you are in cold, your limbs are freezing the first because they are the furthest from your heart. The extremity gets less hot blood. Yeah, exactly. So when I finished the run, I could not text on my phone. It was so hard for me to stop this running. Because I measure it runs on an app on my phone. It was so hard. I could run but I couldn’t do anything else. And then I just realized, you know what? I can push myself. And that was the moment that something changed in my mind, because I realized that all the limits that we have you put on you are the ones that upsell, exactly, yeah. So after that, I’ve done a lot of water challenges. I’ve done some entry level Ultra baritones have gone, this 126 Kilometer challenge a month ago, in 48 hours in Bangkok. And I just keep, you know, progressing. I keep setting higher and higher goals. Because I believe when you do these things, I feel like you experience things that a lot of people don’t experience in their lives, you experience things that it will take several lifetimes to experience. It’s painful, but the feeling of satisfaction and feeling of accomplishment that we get offered this. It’s it’s it’s something that very few people achieve. And it’s totally worth it.

Michael Waitze 8:20
I have to do this, right. But the reason why I wanted to start with this particular story is because I feel like this is a metaphor for building a company from scratch. It’s the same thing. Right? Like, I think everybody who goes through a corporate career realizes at some point that it is not satisfying, and that you don’t feel like you’re accomplishing anything. And I used to joke with my brother who’s a neurosurgeon. If I ever lose my job, he’ll and I was on you know, I was working at Goldman Sachs, I said to him, If I lose my job, the only thing I’m qualified to do is to be your housemaid. Because there’s no like transferable skills, a bit of an exaggeration, but still, you get the point. And you’re right, the exercise thing for me ends up being the same type of metaphor. I just challenge myself every single day to stay and to get better. And I think it’s the same thing when you’re building something from scratch. Talk to me a little bit about growing up in Armenia as well, right. If you did grew up there. And how getting a great job would seemed like it was a cool thing to do. I did the same thing. When I graduated, I went right to Wall Street, and I was like, I’m on fire. And I realized after 15 or 20 years, it was just destroying my soul. I want to understand your experience as well.

Aram Mughalyan 9:29
Alright, so yeah, I was born I was raised in Armenia. And it was a post communist state that got independent around the time I was born. And my parents and the society in general gave me this mentality that if you want to succeed in life, then you have to go to university, you have to get a good job and then you’ve made it that’s it. You made it. I was programmed that way. So what I did was, I did my undergrad degree, I started physics, and then I realized, okay, you know, I can’t get job, you don’t get paid, you don’t get paid well as a scientist. And then I went to Yeah, I went to the UK, in Cambridge, I did a management degree. And I went back to Armenia worked for a few years, I realized I can make a good career move to the Middle East. I was in the power sports luxury industry basically selling boats and yachts to high net worth individuals, a lot of shifts, etc. It was fine job, I was leading the team across two countries, working with a famous Canadian brand Bombardier representing their brands in the region. But then again, at some point, I didn’t find it exciting enough. So I went to INSEAD did my MBA degree. And just like a lot of people who go to business school, when I got there, I got into this consulting mindset, which is like, Okay, well, let’s get a consulting job six figure job. And then you’re good. So yeah, I got I got a fuel first, I decided to join Siemens as a part of their internal consultancy team in Germany. And it was a good job, six figures, you know, like, like, just like my parents wanted me to do. So I went to this job, like, super excited, and thinking, You know what, life is good, I can just relax and just kind of stand this job. And you know, it’s the kind of company where people stay for two, three decades, it’s pretty common in Germany, if you join a big corporate life that you stay for a long time. So I thought, that’s what’s going to happen to me. But after a couple of months, I felt like, you know, money was good. You live in a city center, you got a good car, you got all these things. But then something is missing you kind of philanthropy or like, then I realize it’s like, I didn’t really have this sense of purpose. Like it wasn’t purpose driven. It was a job that I was doing for money, and they didn’t really enjoy it. It was hard to accept for me, but reflecting back, I realized that that’s what it was. So long story short, I. And at that time, it was COVID. So I decided to make the pivot, I thought, you know, what, COVID is disrupting my plants anyway. And the whole globe is getting disrupted. So let me just take, take some risk and try to build something on my own. And that’s when I applied and got into this ampler incubator in Singapore.

Michael Waitze 12:34
I need to ask you this, though. When I was working at Morgan Stanley, Goldman Sachs, my connectivity to the startup world was superduper. Limited. I know, it was like 15 or 20 years before this, but even so, you know, what was taking place in Silicon Valley seemed like it was really far away. I watched it. I paid attention to it. But it didn’t seem like it was something possible to me. When you were sitting in Germany, working there. Like, first of all, how did you know this was even possible? And how did you find out about antler in Singapore for God’s sakes?

Aram Mughalyan 13:06
So I started looking at companies, right? And all the time out here, oh, this startup has a 20x, multiple valuation, I mean, roughly saying if your revenue is x, your valuation is 10x 20x. And then I was looking at these big 100 plus year old Corp projects in Germany, I was looking get their revenue and their valuations, sometimes it’s close. One 1.5. I’m like, Guys, these are dinosaurs. These are, these are great companies. But these are dinosaurs. If they grow to free 5% A year they’re happy, right? And there’s nothing wrong with that. But I just realized that’s not that’s not for me, I wanted something which is fast moving, which is growing fast, which is exciting. It’s got ops, and also it’s got some balance, right? So I started exploring, to see in which region I can go and which region offers the most interesting opportunities for disruption. So I identified a couple of regions, but for a number of reasons, I thought Southeast Asia was the most exciting one. And yeah, I decided to kind of just pick up and move to that region, because like, my dream was just to be based in Singapore, but at the same time to kind of travel around this country. It’s like so it’s kind of like you’re visiting a hub, but you can leave travel visit other countries. And because I had already visited like a lot of different countries in Southeast Asia, I knew where I was coming. So I liked that. That was the first one. The second one was, these countries had huge potential for development. I looked at China, when China was in early 2000s. It was developing very fast, right? And then I looked at the countries in Southeast Asia and I said they are on the same growth trajectory and then the next fall After 10 years, they are going to become big. So there’s this huge opportunity for growth. And when you see growth, that means a lot of Intrapreneurs building something in that region. Yeah. So this is the second reason. The first reason is I looked at Southeast Asia. And I realized there’s a lot of interesting markets too, for example, like India, but India is a net exporter of talent. India, I don’t think India has a problem with talent, they have so much so much talent, they can export themselves. But Southeast Asia is a net importer of talent, for some reason, they don’t have it. And if you look at the top schools, even in my school, he pulled from countries like Indonesia, we had like two people maybe. And out of 500 people. And from India, we had a significant number of people like 740, right. So Indians were properly representative, so to say, but people from Southeast Asian countries, which combined to make up five to 600 million people, they’re hugely underrepresented for a variety of reasons. So that’s the reason that this region, I figured out, you know what they want to grow, there’s a big potential, but they need some builders. So if there’s not enough demand, then maybe you need to import and maybe I can be one of these people to go and then close the gap. So that was another reason. So for all these reasons, I decided to pick Southeast Asia. And yeah, I decided to move there. And it was pick of the COVID, it was very hard. So I kind of started talking to a lot of different startups to see if they are hiring for early stage roles, maybe find a co founder role. And I contacted a lot of people, and I think a few 100 people, and most of them basically told me something along the lines of You know what, stay in your lane. We don’t need you. You don’t have experience here. It’s COVID. So just just what your Yeah, like there were very few people who said, You know what, if you love it, just go for it, by all means, but I don’t see how I can help you. So I looked at all the options. I looked at the bigger companies they’re like, we’re not hiring grab go Jack, I looked at series A startups, they’re like, sorry, no, we don’t have budget for an NCR, the NBA, you’re too expensive. I looked at early stage companies that are like, Hey, we’re bootstrapped. We don’t need no one. And I’m like, You know what? No one wants to be I’ll just start my own company. And then I looked, there were a couple of incubators in antler, the one that fitted my vision and goals the best. So I kind of started looking at it. I talked to a few people who went for the program alumni from my school, mostly. And and then yeah, I just applied to the program. And I was I was accepted.

Michael Waitze 17:41
What was it like? That’s the what was that? Like?

Aram Mughalyan 17:46
Antler is pretty exciting. Just think of it as a matchmaking platform. For single founders. It’s like something like speed dating where a lot of founders go. And then at the end of the three month period, you come out with a couple which couple is are co founders and the baby truffle is your startup from then you get a little bit of funding, and then you just go on to build it. So that’s what happened. That’s where I met my co founders, and we got funding from them. And currently, I’m building solid eight. Okay,

Michael Waitze 18:15
so talk to me now, what about SolidEdge? And did you have this idea? You know, a lot of people go into antler with an idea already and looking for someone to help them build that idea. And some people actually go in with no idea. But just thinking I got to build something. I don’t really know what it is yet. Maybe it’s in this kind of broad category. What did you go in with? And what did you come out with?

Aram Mughalyan 18:36
So I went with one idea. And I pivoted away from that idea, because I realized for that idea, I needed a specific type of a co founder of a diverse, specific profile to build it. And I couldn’t find such a person. But that’s the beauty about intrapreneurship is you may have an idea. And quite often, the very first idea is not what you end up building. Yeah. And we’ve seen this examples that I don’t know YouTube started as a dating game. I think the slack started as a game and there’s so many companies are filled with their version one of the product, the current product there are so different, that often you can’t even tell there was any connection between these two. Right? So I started with one idea and then I pivoted away and fraud the program I came up with this idea of building a decentralized web free talent marketplace. I’ll tell you about it in a second. But the way I arrived at it i i was in crypto space for a while I’ve been there since 2017. But when I went to employer, it was 2021 it was the pick up like with free everybody was discussing hardware free. And that’s when I realized that the true importance of web free and why decentralization matters. It was this core or should I say a realignment of my understanding of why weaponry matters? And why when needed in the long term? Tell me and how,

Michael Waitze 20:08
what was that understanding that you had? Because that’s super interesting.

Aram Mughalyan 20:11
Okay, so let’s take a step back and understand why we need weapons free and wept free for me is essentially a decentralized system. But let me just take a step back and explain to you why. I think it matters. Throughout history, if you put too much power in the hands of people, usually, it doesn’t go well.

Michael Waitze 20:34
I think, okay, that’s I’m gonna give you, I’m gonna give you that’s the understatement of the century. But please, go ahead.

Aram Mughalyan 20:40
Go right. So right usually doesn’t go well. So that’s why if you look at the most prosperous, developed countries, which are usually in the West, they are mostly democracies, right. And this democracies have one critical component, they have this checks and balances system. So if you get a bad leader, this bad leader doesn’t stick for it for their lifetime and doesn’t destroy the country. During the next election a few years later, you can vote them out and bring a new leader. So this system, while it’s not perfect, it’s more or less meritocratic, and it makes sure that the best candidates will represent the people get that right. And that ensures a good environment for businesses to thrive and the economy to prosper. Now, you don’t necessarily need to have that system to prosper. And we have seen some examples of single party states that are having good economics. And they’re Singapore is one example. There’s trying to there is Japan, which again, it’s the same party different different prime ministers and Korea. They are democracy now. But before they were not democracy. So the point is, if you have a good government, this good government can do good things. But the chances are, it’s a very big risk. What if the next leader is not very business friendly or not very wise, what’s going to happen to the country, right? Again, that’s why if you look at the the history of these authoritarian states, or states with a single power, on a long enough time horizon, you’re going to see that they have these big swings, ups and downs. And throughout history, such bad leaders have caused famines, wars, millions of deaths, very bad decisions, and there was no one to stop them until they literally died. I mean, styling installers of it. It’s just one example like literally had to die in

Michael Waitze 22:32
Cuba, Cuba is the same thing. Just on the other side of the of the population spectrum, right. And we talked about Singapore, five and a half, six and a half million people depending on like, what month you’re in. Right? I wouldn’t call it autocratic, per se. But yeah, one party rule, the son of one of the founders of the country is now the prime minister in Japan, same thing. Exactly. The same party runs the country, except for a very small period of time in the early 2000s or late 1990s. And yet, everything still seems to work. You’re completely right. Yeah, go ahead.

Aram Mughalyan 23:02
Right. And I think Singaporean government, like I want to be fair and said they’re doing a great job. I believe they are very wise leaders. Yeah, exactly. And I think these type of governments are extremely rare, this probably our top five, maybe top 10 of the most efficient governments in the world, because I have lived in many countries. And like it’s one of the most business friendly places on the planet. It’s amazing. Exactly. But that’s not the case everywhere else. And if you look at countries and I don’t know, in most of the data developing world, that’s not the case. So this is one reason, right? And now, let’s look at how this decentralization movement started. Right? I think it all started with actually it started with Bitcoin right after the 2008 crisis. And now the question is, why do we need a decentralized currency? And the answer is, again, if you look at the banks, they have been around for around the same country. And some of the major bank banking legislations, for example, in the US, they have been passed in 1930s. There have been some attempts to modify them to certain degree but most of these securities laws, banking laws, they’re almost like 90 years old. That’s a lot of time. Right? And now, we have this fractional reserve banking, which is heavily regulated. And guess what we are seeing is that banks aren’t imploring. Banks are paying billions of dollars for non compliance, etc. So in short, it’s a system that works but it’s not perfect by far it’s not perfect. I can’t

Michael Waitze 24:43
let you just skate by this idea of paying billions of dollars for non compliance. What do you mean by this? I want you to be more explicit about this if you need credit, do it.

Aram Mughalyan 24:55
Yeah, look, look at Credit Suisse. Right, like how many buildings they have paid for non compliance and there was this other bank in Denmark. I don’t remember the name. They also had to pay huge fines for money laundering and non compliant

Michael Waitze 25:10
securities has paid billions and billions and billions of dollars just for mucking around in the FX markets over time.

Aram Mughalyan 25:15
Yeah, yeah. So the point is, the government is saying, Hey, we have banks, and we’re regulating them. So you should trust the banks, because we’re regulating and my point is, this system has been around for a century. And it hasn’t really improved. And it’s kind of working, but it’s not perfect. And I don’t think it’s going to get any better. You get a new bank CEO, you get the new regulatory pass new laws, but the things keep happening.

Michael Waitze 25:40
Yeah, you’re missing this is what can I just interject here, you’re missing one main part. But it doesn’t hurt your argument. The other part of this is that they lobbied to take away restrictions on the regulatory side because it benefits them. In other words, if you’re allowed, if if the risk return reward has no risk associated with it, it’s just a reward, then it doesn’t matter what the regulations are, right? In other words, if I can throw the dice a billion times for free, and still take all my winnings when I walk away, even if I haven’t won anything, well, then the regulations don’t matter. And the changes to the Glass Steagall Act in the late 80s and early 90s. And also the weakening of the Graham Dodd infrastructure, as well leads to things like SVB, not understanding how to manage their balance sheet, and then not going bankrupt but causing tremors in the financial system. So the regulatory environment and the lobbying that goes on in the banking industry, as well as problematic, particularly in countries like the United States, but it doesn’t hurt your argument anyway. Go ahead. No, exactly.

Aram Mughalyan 26:40
Exactly. And I totally agree with that. I didn’t want to go into a lot of details. But these are very good points. Yeah. So it’s kind of going back and forth. Right, Obama passed the Dodd Frank Act. And then the Trump kind of losing the regulations for sample smaller banks and Silicon Valley, it was falling under that category. So yeah, they didn’t have to do such stress testing gets cetera. So it happened, what happened, very much agree with you there. So for that reason, I believe that we need an alternative system, which doesn’t need to completely replace the existing system, but it needs to have the right to exist and offer an alternative to people. And just a couple of examples. Like why do you need that? Right? Like, like, for example, one thing is, and I’ve experienced that it myself, if you want to send money, let’s say within the Eurozone or European Union, it’s kind of crazy. It’s almost instant transfers. But if you want to send money from Europe, to Latin America, or New York, if you sent $350, like, you probably should expect $50 to be paid as commission to want sometimes to intermediate your bank, your money goes to New York, from New York somewhere else. And then finally, it arrives to the recipients bank in the Latin America, the system is highly inefficient. On the other hand, if you want to send crypto an S web free company, a dose of crypto payments from clients it instant, it’s almost there is no guests fees, and they receive it at the same second, why is there no case there is no. What Why is there

Michael Waitze 28:21
Why are there no gas fees?

Aram Mughalyan 28:24
Oh, if you send on the theory network, there will be some gas fees. But if you send for example, on Polygon network, which is much faster, there’s very little gas space. So there’s a lot of ways that you can use auto LTE networks to send them there’s very little like since a fraction of $1. So for this reason, like if you look at it, it can offer huge benefits to people in developing countries who are unbanked or underbanked. Because I have seen a lot of FinTech startups, they build a solution for otter No Country X, which is big enough, but it’s only working for that country. And if somebody else tries to work this closed system, it doesn’t work. So in other words, a lot of FinTech startups, what they’re building or what they were building before, it was like they were like this close silos that works for market X or market y, but they were not interconnected. And I think crypto is the one thing that can connect everybody, because it doesn’t matter where you’re from, you’re just a wallet address. So this is one reason right? Another reason is you will see that banks quite often can just reject you to give a bank account. Why? Because simply you are not important enough for them. You’re not a big enough client, as a crypto startup in Singapore. I was unable to get a bank account with any of the big banks unable you said Yeah, exactly. I wasn’t able to fully legally compliant. I don’t have this token or anything. I’m just in web for industry and I wasn’t able to get it and they won’t give you a reason they will reject it. There’s nothing you can do about it, you can’t appeal anywhere. And this, this bank account feels like a basic human right to me. So in a way, if you’re a business and you can’t get a bank account, it’s like you are being denied some of the basic rights that you should have. And this is why we need crypto because nobody can prevent you from having crypt or transacting on the chin. I think this is another important reason why we need crypto. Yeah,

Michael Waitze 30:26
I mean, it’s so silly, right? When I was when I was five years old, or six years old. I think my one of my uncle’s, whatever gave me $5, or $10, my mother literally walked me down to the industry, we opened a bank account, and I don’t remember what kind of questions they asked a five year old or a six year old. But there couldn’t have been that much due diligence or KYC being done on me. I feel like I feel like somehow the banking system has decided that everybody’s a drug dealer, a human trafficker or an arms dealer, before they even start.

Aram Mughalyan 30:57
Exactly like I remember my experience of opening a bank account in France. And they literally needed to know the city I was born in. So they could have been and apparently my passport was not enough. So I had to translate my birth certificate into French and had it notarized and sent to the bank so I could get a bank account. And I’m like, wow, that was crazy. Like, this is just like a real, but think about

Michael Waitze 31:25
this, too. So Armenia is a country where nobody really has a beef with it. Do you know what I mean? Like when you tell people I’m from Armenia? Nobody. That’s all. Not that. Don’t I mean, like, no one’s saying anything? Yeah, but imagine if you’re just like from, like, from Iran, you’ve done nothing wrong. You’re well educated, just a regular guy or gal from Iran. And I’ve heard these stories. And these guys, like, I didn’t do anything like I didn’t do anything. I just want to open a bank account, I have a job. Where can I put my money? Kind of thing? See, you’re right, the banking system is just completely broken. And anybody who says it’s not it’s just, they’re not paying attention. But how does this figure into? How does this figure into hiring for web three?

Aram Mughalyan 32:04
So I’m talking about why wet freezes? Irrelevant? Right? Oh, yeah, just giving the reasons I’ll come to that. And I guess the final point that I want to highlight why woodfree is important is, is the idea of decentralized identity and decentralized social media. So one example, right? Let’s say, what’s happening these days is this big tech, they have this big silos where they have all your data, all your accounts. For example, let’s take Facebook, right, you have Facebook account or Instagram, it’s all in there. And if and they have certain policies that you have to abide to. And sometimes their policies may not make sense to you at all. And they may try at all right, or for whatever reason, their automated systems may just shut down your account, and you may not be able to get it back. And you’re kind of you’re kind of stuck in their system, you don’t really have the freedom and autonomy manager out own followers. Now, the alternative to that is decentralized social media. And the best way to explain it this is, is to compare it to email. And I think email is the first, probably the first tool that was built in the when Internet came around that is truly decentralized to ahead. So just think about, right. Like you can have Gmail account, and I have Yahoo account, and you can send me emails, and I don’t care what kind of email client you’re using. If you have a contact list of people who subscribe to your newsletter, if Google shuts down your email, you can go to Yahoo, and you can open another email or there’s so many other providers, they can never prevent you from using email, you can always use email. That’s the beauty of it. Everybody has the right to have an can have an email. But if Facebook shuts it down, that’s it. It’s for life, they will they never going to reverse their decision, you pretty much can’t appeal, you can’t do anything. And they will never tell you a reason. They say Oh, you didn’t comply with the rules. And there’s no one to talk to. Ah, exactly. There’s no one to talk to. I remember in 2010, you still could email them. They were small company, they will reply but no more. Now it’s all AI and it will never get any reasons. Right. So the concept of decentralized social media is that all your data is on a protocol. And what you are using, it’s like a front end, for example, when you go to the browser and go to facebook.com. It’s one client like like Google, or Yahoo, et cetera. So you can use different websites to access your data. And if one provider for some reason they block you still have the option to use others. And it’s a decentralized permissionless network. So there are decentralized social media websites around I’m on a couple of them, but they’re still not big, but I’m a big believer in them, like examples could be the less protocol, the forecaster etc. So, again, the The it’s a bit long, but I tried to explain why wet free matters. Yeah. Now I’ll try to tell you what solid eight is doing. Right? Please, I think the best way to explain it is it’s a it’s a marketplace for web free talent and work for companies where work for companies can essentially hire talent. But the way it works is that it’s different, because we want to empower people who are on our platform, and give them the vote. And we do that for our tokens. For example, if you do something, if you make a contribution to the platform, it can be you invite your friend, your friend, join our platform, right? We will give it tokens for that contribution. Now you can and this tokens will have monetary value you can trade them on on a decentralized crypto Exchange, or you can also use this tokens for governance, you can vote on the key proposals. And the vision is, in the long run the founders, investors and the users of the platform, they all have the same token. So that means that as a founder, and plus investors, you want people to push decisions which go against the interests of users, because we plan to give out most of the tokens to the users. I guess the closest example, is this cooperatives owned by the employees, if that makes sense. So it’s like employee owned companies. So as a CEO, or as an investor, who has some ownership in that company, you can’t push a decision, which goes against the interests of the people.

Michael Waitze 36:35
How do you control against concentrated ownership or concentrated token holdings?

Aram Mughalyan 36:41
Right? So there’s different ways to control it, right. So like one, one example is, if you have one token, one vote, which is, which is a very simple system. Another way is to do quadratic voting, which is exactly tackling this, I won’t go into details to explain how it works. But essentially, it doesn’t let the whales the people with overwhelming number of tokens to lose weight the votes. This is not a way the first way you can do it is through his crew like NFT system where essentially, people only the people who contribute and they receive the tokens for their contributions. Got it giving also receiving. Yeah, exactly. Because, like, let’s be honest, like most of the Dow’s these days, the US are these decentralized autonomous organizations. Yeah. If you look at what percentage of token holders vote, it’s usually in the single digits. It’s like heaven, where only like 7% of people voted. Yeah, it’s like, press. This is ridiculous. Like you call this a democracy? Well, it’s not a democracy, right? Like most people don’t really care. But what you can do is that there will be a small number of people who are very active in the community, and to make contributions to the platform. And you will empower these people to make the decisions. Again, a good comparison is like Wikipedia, where there’s only a very few ever, somebody can go and everybody can edit Wikipedia, right, everybody, but usually there is a small number of people who are the active contributors, and they’re sort of the community or fun leaders for different topics. Yeah. And yeah, and it’s this people who are very committed to the project that have a governing voice. So we want to do the same, but for the decentralized platform, essentially.

Michael Waitze 38:33
And you said, what you said, what quadratic voting, I want to make sure I have that right.

Aram Mughalyan 38:37
quadratic voting Yet this is this is one way, this is one way of voting where people who have a large number of tokens, concentrated tokens, we call them whales, it’s a way to make sure that these people can’t sway the vote. This usually happens if the founders or the founding members have the large majority of tokens, and then they give a few times to the committee members. And they say, okay, you know, we’re a very liberal and open place. And then we have one token, one vote. Essentially, it’s like a dictatorship where, where you can pass whatever you want. So quadratic voting makes sure that this kind of things don’t happen. Essentially, it gives more weight to people, to a large number of people who hold fewer number of tokens, rather than few people who hold a large number of tokens.

Michael Waitze 39:30
I’ll look it up. And I’ll put a link to it in the show notes so people can get a better understanding for what are some of the other things that make because I mean, web three is like super new, right? And if I ask five people, I probably get five definitions for what web three is, like, what is the significance of the hiring here, like how do you know who’s good, who’s bad and what is the platform do to differentiate and also this idea of memory? You said you had a hard time opening a bank account. One of the things that I’ve learned over time is that you know, the reason why people want have avatars is not so that it It’s not it’s not because they want to do something illegal. It’s not because they don’t want people to know who they are. So they can do shady things. It’s that they don’t want to be defined by how they look and where they’re from. Right? So they don’t want to get caught in what I would call income arbitrage, right? Where a programmer in Ho Chi Minh City, who could just be like, you know, could program with their eyes closed, their hands tied behind their back just doesn’t get paid as much money as some just generic person who happens to live in Silicon Valley and makes 250 grand a year, right. So they don’t they don’t want to be identified not because they want to do something illegal, but because they want to participate in a system that doesn’t judge them by where they’re from and how they look. Right. So are you working on that as well in the context of solid eight?

Aram Mughalyan 40:42
Yeah, so currently, like all the people that are in our plants, and we know them, because what we are seeing from the side of the, from the startups we’re hiring, it’s really important for them to know who’s the person to connect with them. And there are some, there are some commies completely anonymous, and that’s also fine. But I would say such projects currently are in the minority. But your point is a very good one. And I totally believe that in what you’re saying that talent should be paid for their skills and not for the location where they’re based that Yeah, yeah, so what we are doing is, we’re trying to match clients with the talent, regardless of their location. And we try to explain to them that if someone has the right skills, then it doesn’t really matter where they are based that. So currently, there is no foolproof method how to make sure that this type of things don’t happen. I have seen it myself, as someone who’s building this type of platform, I tried to prevent them. If I see some clients, for whatever reason, trying to do this salary arbitrage. I tried to push back against that. But unfortunately, it still exists. But what fortunately, what I’m seeing is a lot of web free startups, when they put a job description, they say, Hey, I’m hiring this engineer, for example. And this is the package and it’s remote. So as long as you have this skills, I’m going to hire you. And this is one way to prevent this type of arbitrage, especially if you have to mention your salary range. And it’s not a very big one, then companies sort of makes a commitment saying, Hey, I’m hiring, this is the range. So depending on your skills, where you fall, in that range, I’m just going to pay you this amount. One way that we are also planning to combat this is what I call a reputation on the chain, right. So for example, what what’s happening on platforms like Upwork, if you have a good reputation, you get a five star from a client, or if you pass a test, and you are a great solidity developer, you will get a five star or you will get some other mark on your profile, saying your top X percent. But again, this thing, it’s only platform specific, and it’s not on the chain. So you have to, you can only utilize it if you’re on one platform, right? On the other hand, if this thing is on the chain, then it can pretty much be visible to everybody. And if you get a good feedback from one client in the past, then it’s attached to your identity, and it’s not attached to a platform. And this gives also more power to the developers to say, Hey, I’ve done a work, I’ve got a good recommendation, this recommendation is in form of an NFT. And this is my verified identity, it’s attached to that you can find this NFT in my wallet. And I am also a good developer, because I have done this course online. Or I have attended this hackathon. And when you attend the hackathon, you will also get an NFT for your attendance. And you can collect all these things. And I call this pieces of online reputation and the more pieces you collect, the more the more trustworthy you can become. Because if you’re someone who has attended a lot of hackathons, who has a good knowledge of different languages, and has good some recommendations from reputable companies you’ve worked with, then essentially you can build a very credible reputation online. And this also lets you stay anonymous if you choose to. We prefer at this point to work with people who are not anonymous, just because at least at this stage, I believe in just building personal connections with people in the long run. This can also help people to stay anonymous if they choose to.

Michael Waitze 44:32
Let me just make sure that I understand the platform, right. It’s a hiring platform that has its own token, do you have your own wallet as well? And if you get enough people on the platform, are there plans going forward? Right, because if you’re already doing a reputation management, you already have your own token. That token has value or should have some kind of value. Are you going to build some other financial services or other services around the platform? Well as you continue to get more people on it, whether it’s in insurance, which is really straightforward training to make sure that people can continue their web three journey, and everything that goes along with the things that these people want to do. Does that make sense?

Aram Mughalyan 45:14
Yeah, it absolutely makes sense. You have mentioned some of the things from our roadmap. Just to be clear, we don’t have the token yet. What we are seeing now is there’s two things, right. So one reason is that I see that there is this big push back against crypto, what you see is Gary Gensler from the SEC in the US come in and saying, if you’re in is a security, anyone who issues tokens should register with sec if you have users in the US. So there is this big, big, big push back against the crypto right. So for this is one reason why we didn’t have the token, because we’re trying to see what’s going to happen when it’s some regulatory clarity. The second reason is that if you have an initial token offering again, the prices of the crypto have fallen in 2022. So it’s not the best time. So we’re holding on with that one, primarily because of this two reasons. But yes, the vision is that once we have a token, it will, it will give people governance rights. And as we grow, we are planning to bring on board more things like insurance, for example, if some workers are freelancers, they won’t be getting any insurance, right. And by working with different partners, we can also offer them insurance and loads of other products, for example, another thing if you want to stay legally compliant, and you are hiring a person from another country, you don’t have a legal entity there. How do you do that? We plan to partner up with companies offering so called employer of record services like deal so that you can hire people. Exactly. So you can still legally compliant. You can pay in crypto, instant transfers. If you want to pay someone in a country X that has a very volatile currency with a very high level of inflation, etc. Like Argentina with 100%. You can just pay them in crypto. So that makes things easier. We have all these things on our roadmap. And yes, we’re planning to build them as we go.

Michael Waitze 47:15
I want to make a point here because you brought up Gary Gensler, who right now what is his? He’s the undersecretary of the Treasury, what does he know he’s the head of the Securities and Exchange Commission. He’s the head of the SEC is the 33rd. Chairman of the SEC, I want to make a point here, though, getting back to what you said that’s wrong with the financial system. And you don’t have to agree with me on this, right. Gary Ganser is a product of the like traditional financial world, he’s against crypto, because he I’m not saying because of but in part because he worked at Goldman Sachs for years. And the biggest problem with the SEC in the United States is that it’s not an independent regulatory environment. It is constantly staffed with people who used to work on Wall Street, and every regulation they make is going to be there just to benefit their old partners, if not their existing partners. The other thing as well is if you become the Secretary of the Treasury, or you become the head of the SEC, I think somehow you’re able to avoid taxes on all of the stock holdings, and also all of the compensation that you’ve received, if it had been in a trust, because you put it into a trust. And when you take it out of that trust, it’s now tax free. So these guys that have 250 300 400 500 million bucks go work at the SEC for four years. And then all the money that they’ve earned ends up becoming tax free. So there’s a reason why a guy like that is against crypto because it takes away or at least attempts to take away all the power from the people that he’s regulating, and also with him to all the people that he’s worked. So

Aram Mughalyan 48:43
exactly fair enough. Now, I totally agree. And you remember Henry Paulson,

Michael Waitze 48:48
he was like Paulson was Goldman Sachs. Exactly. Yeah, it’s all the same thing.

Aram Mughalyan 48:56
There we go. Exactly. So I’m totally aligned with you on this one. Okay. So

Michael Waitze 49:01
you haven’t issued the token yet. But how long has Soliday been I’ll let you go in a second because we’ve been at this for almost an hour. But what is the status of solid eight now and where’s it going?

Aram Mughalyan 49:13
So currently we’re operating were bootstrap because again with did an issue of token now within a race more funding after we’ve got the initial preset from Ambler so we are waiting to to whether this crypto storm out to see where things aren’t going. And then after that, we make the big lip?

Michael Waitze 49:34
Do you feel like I have to ask you one more thing before I let you go? Do you feel like all the training that you did the getting up to 110 kilos and getting the discipline and understanding the problem, solving it and attacking it directly? is not just a metaphor, but also helps you build this company where you realize that and I do think this is true that if I put my mind to it, I can accomplish almost anything and as long as I continue to keep myself satisfied and stretching the goals that I’m trying to do that I can account publish this stuff and that you’ve already seen yourself do it. And that that works in the context of a startup as well.

Aram Mughalyan 50:06
Yeah, absolutely. I think startup is, is a marathon. It’s a very long journey. And, and, and quite often, it’s also it also feels lonely, you know, as a founder, you may have advisors, but ultimately, whatever decisions you make, you have to live with these decisions, and you’re gonna have all the people in your community 10 people working for you, who will be impacted by this decision. So you’re going to feel a lot of pressure, you’re gonna feel that you don’t have enough information to make decisions, there’s always going to be uncertainty, and you feel like you’re going to be hit from multiple sites at the same time. Usually, what’s what’s really happening? For example, if you have crypto winter, right, what’s happening that this is our slashing valuations, they’re taking more equity for lower valuations, their due diligence processes longer. And the the requirements are much, much higher than it used to be in 2021. We’re, for example, having a pitch deck in the white paper. And usually, like, quite often, it would be enough to raise a million or $2. And I’ve seen a lot of projects, raise money, many of them flopped already. But that was the case, right? Yeah. On the other hand, what’s happening is, you have clients and many of your clients are with startups. And because they just like you are having challenges raising funds. It also it’s also affecting their cash runway, so they’re scaling down on their hiring. This is the second thing, the first thing is you have all these other big tech and they are laying off people in 10s of 1000s. So what’s what’s happening is that you have fewer companies hiring and suddenly a lot more talent looking for jobs, right? So temporarily, it becomes easier for companies to hire people, so they don’t really need services of Headhunters, recruiters and platforms like ours. So for all these reasons, you’re just saying, okay, my revenues are down, my clients are canceling sales are down is becoming harder to raise. So yes, as a founder, you will see few things attacking you at the same time. And sometimes you just the only thing you can do is just to keep going because there isn’t much you can do. You can’t impact what’s happening in the outer world. You can double down on sales. But yes, there is only this much you can do. So sometimes you just have to go the long journey. You just have to live for this crypto winter and see when the spring is coming. Because as they say, Today’s hard tomorrow may be harder. But that the afternoon there’ll be sunshine. I think that’s Jack Maas quote. So yeah, sometimes this is this is the best thing they have to do. And the best support you can get I feel like is by interacting with other founders because our founders aren’t in your shoes and they understand you and you and you can be vulnerable to them and say, Hey, I’m going for challenges that’s not like this. Blue sky and roses and things are good noise, it’s challenging times and they will understand you and they will share their concerns. And you will try to support a charter and get a charter specs until things get better.

Michael Waitze 53:27
I’m gonna thank you now Aram Mughalyan a co founder of Solidate thank you so much for doing that. These are really important messages for people to understand kind of across the board. I really appreciate you doing this today.

Aram Mughalyan 53:39
Thanks for having me, Michael. It’s been a great conversation.