Charlie Olson of Pando on Unlocking Productivity & Earnings Potential in an AI-powered Future
Charlie Olson, the co-founder and CEO of Pando, is a visionary entrepreneur at the forefront of reshaping the landscape of economic success. Alongside his co-founder Eric Lax, Olson has revolutionized the concept of income pooling, offering a solution to the uncertainties of a winner-takes-all economy. His journey with Pando began during his time at Stanford Business School, where he recognized the transformative potential of this innovative approach to shared financial success. Under Olson's leadership, Pando has become a trusted platform serving professionals and VC-backed entrepreneurs, with a bright future ahead.
Charlie Olson, Co-Founder and CEO at Pando
I recently sat down to chat with Olson about future of work trends as part of my research to produce Season 1 of The Lever with Drew Fortin. This show highlights how the rise of artificial intelligence (AI), robotics, and Web3 will shift the paradigm of humans at work for the better. I wrote this article based on my notes and transcripts from the interview. You can also watch a video of my interview with Charlie Olson, Co-Founder and CEO at Pando, below.
How the Uncertain Economy Helped the Innovation of Income Pooling
In an increasingly volatile winner-take-all economy, many career paths are fraught with uncertainty. Olson, a Stanford Business School alumnus, found himself intrigued by the research conducted by his co-founder Eric Lax and economist Edla at Stanford, which highlighted this very issue. Lax's innovative solution – income pooling – forms the backbone of their venture, Pando. This model involves a group of individuals who have chosen to share a small portion of their future earnings in a common pool, providing a safety net for all members in case of outsized success by any one individual. Olson saw the potential in this concept, recognizing the complementary nature of their skills, and together they embarked on a journey that has led to serving professional baseball players and VC-backed entrepreneurs.
The innovative idea behind Pando earned Olson a spot on the Forbes 30 under 30 list in 2019. This recognition was a testament to the potential impact of their idea on a macro level. Amidst continuous economic changes, Olson believes that people need the right tools to navigate these shifts. For most individuals, their ability to generate future income is the most valuable asset they have. Yet, it is also the one over which they have the least control. Pando's model offers a way to mitigate the risk associated with taking an all-or-nothing bet on a single career path.
"We constantly live in a changing world, and that's neither good nor bad. It is. And if our economy is changing, I hope that we are all situated with the appropriate sets of tools to be able to handle that change." - Charlie Olson, Co-Founder and CTO at Pando
The economy's growing volatility makes the risk of single-career bets even higher. Whether it's a baseball player who risks a career-ending injury or a VC-backed entrepreneur facing the harsh statistic that 90% of such businesses fail, the economic outcome remains uncertain. Pando aims to offer a better way to manage the risk around career choices. By providing both a community of aligned peers and financial security, Pando hopes to enable talented individuals to pursue careers that align with their personal risk tolerance, rather than being deterred by the inherent risks.
Assessing Startup Founders in Trying Times
In the challenging landscape of startup entrepreneurship, determining the value of early-stage founders presents a unique and complex problem. Olson, co-founder of Pando, acknowledges the inherent volatility and uncertainty surrounding the outcomes of these ventures. To address this issue, Pando leverages data science, algorithms, and AI to provide insights into expected future earnings and the distribution of possible outcomes for entrepreneurs.
Pando's marketplace experience aims to assist entrepreneurs in making informed decisions about joining a particular pool or forming one with like-minded individuals. By considering factors such as expected future earnings and statistical risk, Pando helps entrepreneurs navigate the choices they face. Olson highlights that valuing an individual's potential is challenging and requires a deep understanding of statistical volatility.
To evaluate the value of early-stage entrepreneurs, Pando utilizes various data sources. Historical data, including odds of success, revenue, and fundraising round progression, provides insights into the likelihood of a venture's success. Additionally, Pando collects tax returns from clients to assess eligibility for pool contributions. The combination of proprietary financial data and revealed preference data from the marketplace experience enhances the accuracy of Pando's algorithms.
"This is a community now with aligned financial incentives to care, to help you out and to help encourage your odds of success." - Charlie Olson, Co-Founder and CTO at Pando
What sets Pando apart is its unique approach to valuing founders. Unlike traditional venture capital, which focuses on specific companies, Pando places its bets on individuals. This means that Pando considers the income a person will generate from their entrepreneurial endeavors during the pooling agreement. Whether a serial founder with multiple successful ventures or someone progressing through different entrepreneurial journeys, Pando supports founders in building wealth over time.
By providing valuable insights and leveraging technology, Pando aims to empower startup founders in making strategic decisions and navigating the uncertain and volatile world of entrepreneurship.
Equipping Individuals with Data for Informed Career Choices
Olson recognizes the importance of projecting future income potential and making financially informed career choices. He acknowledges that the lack of comprehensive data and considerations of risk and uncertainty often hinder individuals from making well-informed decisions about their careers. Drawing from his own educational experiences at Stanford University, Olson notes that while some information exists on early career earnings in specific fields, it fails to capture the broader perspective necessary for long-term career planning.
Pando strives to address this challenge by offering a more comprehensive dataset that enables individuals to assess the true odds of success and expected outcomes based on different career choices. By examining not only the initial few years but also looking ahead 5, 10, or 20 years, individuals can make more informed decisions when choosing a major or considering various career paths. Olson emphasizes that career decisions shouldn't solely revolve around financial considerations but should also align with personal passions, skills, and purpose. Pursuing meaningful careers leads to greater satisfaction and increases the likelihood of creating value and success.
"The strongest kind of hard asset that an entrepreneur has is the company they're currently working on. So, we use a whole bunch of historical data based on odds of success and likelihood of moving from one fundraising round to another." - Charlie Olson, Co-Founder and CTO at Pando
While optimizing for risk-adjusted cash is not the sole focus, Olson believes that having access to relevant data can empower individuals to make better-informed choices. Pando aims to provide individuals with the necessary information to evaluate career options, allowing them to pursue paths they are passionate about even if they may seem uncertain, such as entrepreneurship. By leveraging data and technology, Pando seeks to arm individuals with the tools needed to navigate the complex landscape of career choices and increase their chances of growth and success.
Enhancing Income Pooling: Managing Risk and Uncertainty in Diverse Industries
Olson envisions income pooling extending beyond professional athletics and startup entrepreneurship. He believes that as careers in sports, media, entertainment, the creator economy, finance, medicine, and many more sectors continue to exhibit risk, volatility, and uncertainty, the concept of income pooling can provide a solution. The traditional notion of a 30-year career with one employer is becoming obsolete, and individuals are seeking ways to navigate the uncertainties of their chosen paths.
As Pando aims to serve a diverse range of individuals, they plan to expand their reach to include gig economy workers and those facing financial vulnerability in the near term. Olson sees income pooling as an effective tool to address the unique challenges individuals face in different economic sectors.
To illustrate the concept more concretely, let's consider a case study Olson shared in professional baseball. Imagine a group of five first-round picks from the Major League Baseball draft. Each player is projected to earn $45 million from their baseball career. However, statistics show that while 50% of these first-round picks may earn less than $1 million, the other 50% could average over $90 million. The uncertainty lies in not knowing which category a player will fall into.
In this scenario, Pando would facilitate the formation of a pool among these five players, all with similar expected earnings. They would agree to contribute 10% of their future earnings after earning the first $2 million into the pool. Contributions and distributions would occur annually, and the pool would continue throughout their playing careers. The pool would be owned equally, ensuring that every member benefits from the success of others.
"If you choose a career of meaning and purpose, one that aligns with skills that you have, including your passions, you're more likely to do well and you're more likely to create value and impress people and enjoy the ride a hell of a lot more." - Charlie Olson, Co-Founder and CTO at Pando
This income pooling arrangement provides financial security for players who may earn below the expected amount while also allowing high-earning individuals to contribute back to the pool. Consequently, even if a player earns $40 million, they can still receive additional income if someone in their pool goes on to earn $100 million. Furthermore, this system fosters a sense of camaraderie among the participants, creating a supportive community with aligned financial incentives.
By expanding income pooling to different sectors of the economy, Pando aims to empower individuals, mitigate risks, and provide financial stability in an uncertain world. The concept offers an innovative approach to navigating the ever-changing landscape of careers and allows individuals to focus on their growth and success.
The Evolution of Performance Measurement: Calculating Employee Value & Compensation
In the ever-changing landscape of talent management, Olson's work with Pando raises questions about how businesses calculate the value of employees and their compensation. The concept of salary compression, where external hires may earn similar salaries to long-term employees, highlights the need for more sophisticated methods of measuring individual performance within organizations. Current performance management systems often struggle with objectivity and data-driven assessments, making it challenging to evaluate the multifaceted contributions individuals bring to their roles accurately.
"It is very hard to accurately assess the value that a person brings in all of their elements of their role and their personhood." - Charlie Olson, Co-Founder and CTO at Pando
Amidst these challenges, there is a growing recognition within the business community of the need to find better ways to measure and track talent value and output. As organizations strive to assess the true impact of their employees, there is a shift towards more holistic approaches that take into account various elements of an individual's role and personal attributes. This trend reflects a broader effort to move away from traditional performance grading towards a more comprehensive understanding of what constitutes a talented performer.
However, the future of performance measurement is also influenced by rapid advancements in artificial intelligence (AI). With the emergence of AI-driven productivity tools, there is the potential for exponential increases in employee productivity. Companies must adapt quickly to this changing landscape, considering how certain roles and functions may be redefined or even rendered obsolete. The integration of AI tools can transform employees into creators and guides, working alongside intelligent systems to enhance their effectiveness.
Navigating this complex landscape requires businesses to carefully balance bottom-line considerations with the human aspect of the workforce. The displacement of individuals due to technological advancements raises important questions about maintaining strong company cultures and fostering resilience. It is crucial for businesses to approach these changes with empathy, ensuring that employees are supported and empowered to adapt to new roles or opportunities that arise.
As companies continue to explore innovative approaches to performance measurement, it is clear that the evolution of talent management will shape how businesses evaluate and value their employees. Embracing technology, redefining performance metrics, and fostering a resilient and inclusive workplace culture are key factors in empowering growth and success within organizations.
Adapting to Tech Evolution: Embracing AI and Changing Workforce Dynamics
In discussing the ongoing evolution of technology, Olson emphasizes that while short-term pain may arise from labor displacement, the long-term gain is far greater. He draws parallels to past technological advancements such as computing and the internet, highlighting how they ultimately led to job creation surpassing job displacement. Citing the World Economic Forum's estimates, he notes that while AI may displace approximately 80 million jobs, it is also expected to create over 90 million new jobs, with that number projected to exceed a hundred million in the future.
As machines become more prevalent and take on increasingly objective tasks within businesses, the focus shifts towards the human element in performing subjective and relational work. This continuum between transactional and relational aspects highlights the need for sophisticated performance measurement systems that can capture the multifaceted contributions of individuals. Olson believes that previous approaches to performance measurement were inadequately developed but expects significant advancements as organizations strive to measure these complex aspects of work.
"I think the biggest takeaway that I see is that the ability to be an artist and to be a guide will be kind of at of paramount importance, meaning you need to guide your AI friend of whatever, of whatever sorts and whatever tool you're working with to do what you want it to do." - Charlie Olson, Co-Founder and CTO at Pando
Looking ahead, Olson prompts readers to envision the competencies and abilities that will be highly valued in the future workforce. Creativity, emotional intelligence, critical thinking, and adaptability will likely gain prominence as technology becomes more integrated into business operations. The ability to navigate complex human interactions, analyze nuanced situations, and innovate will be coveted attributes in this evolving landscape of work.
By acknowledging the potential of AI and its impact on job roles, while also considering the unique value that humans bring to the equation, businesses can empower their employees to thrive in this changing environment. Leveraging technology to enhance productivity and efficiency, while also fostering a culture that values human skills and attributes, is crucial for achieving sustainable growth and success in the future of work.
Preparing for an AI-Driven World: Skills and Performance in the Future
As the world continues to integrate with AI, Olson emphasizes the importance of being an artist and a guide in this evolving landscape. The ability to effectively guide AI tools and leverage their capabilities will be paramount, allowing individuals to extract maximum value and make a greater impact. Human creativity and the capacity to create things that algorithms cannot will become highly valued, underscoring the significance of blending emotional intelligence (EQ) with intellectual intelligence (IQ) in the workplace.
Performance management becomes a challenge with a shift towards more creative and experiential work. While traditional metrics related to revenue, costs, profit, impact, or academic outcomes may still be relevant, defining specific key performance indicators (KPIs) based solely on inputs will become more complex. The focus will likely remain on outcomes, but defining the inputs that lead to those outcomes may require further exploration and adaptation.
"We're really seeing the birth of a new generation of companies that remember that their single most valuable asset are their people, especially if we're moving in the direction where our people are, the creators, our people are, the guides, our people are these extraordinarily high leverage kind of engines within our company." - Charlie Olson, Co-Founder and CTO at Pando
In this rapidly changing environment, the soft skills associated with high EQ will continue to hold value. Interpersonal skills, empathy, adaptability, and the ability to collaborate effectively will become even more crucial as humans navigate the complexities of an AI-integrated world. These skills will complement the technical abilities required to work alongside AI and guide its actions, ensuring that human contributions remain indispensable.
While the future of work presents challenges in measuring performance, it also offers opportunities for individuals to showcase their unique human qualities. By embracing the artistic and guiding aspects of work, employees can position themselves as valuable contributors who bring creativity, emotional intelligence, and collaboration to the table. Balancing the quantifiable and qualitative elements of performance will be essential in fostering growth and success in an AI-powered world.
Unlocking the Value of Attributes: Transforming Career Development in the Tech Industry
Olson envisions a future where the value of an individual's attributes, whether educational, experiential, or performance-based, can be accurately quantified. By understanding how these attributes compound over time, individuals can gain a clearer understanding of their own value and make informed decisions to enhance their professional trajectory. This transformation extends to resumes as well, shifting from a mere list of experiences to a showcase of proven attributes and the impact they can bring to an organization.
Career development also undergoes a significant shift in this evolving landscape. Olson draws parallels between professional athletes and employees, highlighting the importance of seeking coaching and continuous improvement. While coaching is often expected in the world of sports, it is not yet the norm in the tech industry. However, as organizations recognize the immense value their people bring, there is an emerging trend of investing in employees' success through coaching, therapy, and holistic career pathways. This shift reflects a growing understanding that employees are the most valuable assets and should be nurtured accordingly.
"I would argue by the way that we just generally as a species don't do a good enough job betting on ourselves, investing in long-term oriented growth. And that actually that is a kind of tremendous wasted opportunity generally." - Charlie Olson, Co-Founder and CTO at Pando
Recognizing the increasing worth of each employee, organizations are beginning to prioritize competence, happiness, and functionality on an individual level. By investing in the growth and development of existing employees, companies can reap significant financial and cultural benefits. Promoting internal talent and fostering a supportive environment reduces costs associated with turnover and creates a sense of fulfillment and success within the workforce. Olson believes that this focus on employee development has been a missed opportunity in the past, but the industry is finally heading in the right direction.
Fostering Personalized Career Development: Empowering Talent in the Business World
Olson challenges the prevailing notion of career development solely sponsored by businesses, arguing that it often leads to individuals being pigeonholed into roles that align with company needs rather than their aspirations, values, and competencies. This trend is also evident in talent agencies, where the focus is primarily on representing the interests of businesses rather than individuals. However, Olson applauds initiatives like Pandora's individual-led career development services, which allow individuals to take control of their own growth and invest in themselves.
Looking ahead, Olson envisions a future where individuals have increased agency and access to individual-sponsored career development services. He acknowledges that the success of such services depends on factors like the financial flexibility and priorities of individuals. However, he emphasizes the need for individuals to bet on themselves and invest in long-term growth, highlighting the missed opportunities when humans fail to prioritize their own development. In a world that fosters increased market opportunities for individual-led career development, more individuals can thrive and achieve higher levels of success.
"One where the employee has a little bit more leverage with their employer by having more their diversified approach to making money into building a community." - Charlie Olson, Co-Founder and CTO at Pando
While some companies may focus on training employees for specific roles and holding them in those positions, Olson advocates for a shift towards a longer-term employee-centric approach. Great companies should prioritize coaching and development that aligns with individual interests and aspirations, recognizing the immense value of investing in their employees' growth. By supporting individuals on their personal career journeys and providing pathways for advancement, businesses foster loyalty, fulfillment, and create a competitive advantage rooted in treating people well.
In conclusion, Olson emphasizes the importance of shifting the focus of career development toward the individual. By empowering individuals to take charge of their growth and investing in their long-term success, businesses can create a culture of support and build a reputation as a place where people thrive. Talent becomes the most significant asset, and treating individuals well not only benefits the individual but also contributes to the business's overall success.
Want to hear more from Charlie Olson?
- Catch Charlie in episode 5 of Season 1 of The Lever with Drew Fortin
- Watch my full-length interview with Charlie Olson, Co-Founder and CEO at Pando, on YouTube
- Follow Charlie Olson on LinkedIn
Drew is a people-first, values-driven leader with nearly 20 years of growth strategy and team-building experience across retail, marketing technology, local media, and HR tech. He spent 7 years at The Predictive Index, where he was Chief Growth Officer responsible for the company's strategy to build the world's first...
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