In some ways, 2018 reminded me of my first year as a wide-eyed undergraduate at Northwestern University in Chicago. So much promise, so much opportunity, but I still needed to figure out what my exact direction was — where exactly I wanted to plant my flag.
What started as excitement my freshman year turned into confidence as I began year two. I knew who I wanted to be, and I could see how to get there. I had the skills and resources to achieve my dream, I just needed to keep working towards it every single day.
That feeling is similar to what we’ve been experiencing in early 2019 at Thor HQ. We’ve found our footing and we know exactly who we are. We’ve got the skills and resources to build our dream, we just need to keep swinging our hammer. And swing we will!
I am grateful to be surrounded by such a hard working team, and I am so proud of everything they have accomplished. I am honored to be a part of the community that surrounds us and thrilled to continue working on their behalf. The world is embracing what we are building, and we couldn’t have done it without the support we’ve received from each and everyone one of you. For that, I say THANK YOU!
As a company — and as a movement — we can do well by doing good in the world, and there is little else I could ask for. It’s been a crazy journey already, and it’s just the beginning.
— David Chin, CEO, Thor
A Look Back
What a year it was! Thor went from simply an idea in the minds of a few (slightly deranged) crypto heads to a full-fledged company with a working SaaS product and a mountain of opportunity ahead.
A year ago, we were just getting our white paper together and laying out our vision. By March, we kicked off our month-long token sale, and that vision started to come to life. While it was a lot of work getting to the point, the conclusion of our sale meant that our real work had only just begun.
We built a beta for our mobile wallet so that we could begin testing its send and receive functions in a closed-loop system before we had the required licensing to implement our complete vision. Acquiring that licensing is a (often absurdly) time-consuming process, but it was important to us to begin the engineering leg work right away so that we could hit the ground running once the legal hurdles were cleared.
Soon after, while in talks with early clients and potential customers, we understood that for our Lightning Pay™ instant payments to ever function like we imagined, we would need sign off from the on-demand companies that contractors worked with. In addition, we would need a business portal that allowed those companies to manage those outbound payments. What happened next we didn’t expect. The companies we all spoke with told us that they have such a hard time paying and managing their contractor workforce that they would pay us for the business portal alone while we were building out the Lightning Pay infrastructure. Thus spawned Odin™.
From there, we knew we had three areas of focus: platform development, customer acquisition, and compliance. We also recognized that to achieve our goals in a timely manner, we couldn’t go at it alone. We began cultivating and developing partnerships that would help us in each of these realms.
From a customer acquisition perspective, we established partnerships with Moonlight and Travala to offer our affordable benefits packages to contractors on their platforms once they are available. In order to help with platform development, we established a partnership with Dwolla to provide us fiat payment rails so that Odin could be functional by our target release date of October first (Dwolla helped us to comply with regulatory requirements as well, as we explain below). We also established a forward-looking partnership with SpotCoin to help with fiat/crypto liquidity when our platform (and our customers) are ready to begin using both.
From a regulatory and legal perspective, our primary concern was being able to offer Odin’s services as quickly as possible to a wide variety of users while maintaining regulatory compliance on a state and federal level. We quickly recognized that Thor qualified as a Money Service Business (MSB’s) under the Financial Crimes Enforcement Network (FinCEN) regulations. As a result, we focused on two main aspects of FinCEN compliance:
- Anti-Money Laundering — Key aspects of blockchain and distributed ledger technology are, by design, intended to maintain a certain level of anonymity. Institutional intermediaries that would otherwise act as gatekeepers by performing KnowYourCustomer (KYC) and customer identification procedures (CIP) are not consistently engaged to perform these compliance-based requirements for money service businesses. At Thor, we partnered with an AI-based AML monitoring and screening vendor to maintain AML/BSA compliance while also considering the very nature of blockchain technology. Unit21 was selected in large part due to their machine-learning techniques that identify non-obvious money-laundering practices in order to leverage the client’s data to find anomalous patterns. This partnership is critical to ensuring that funds passing through the Odin platform are not vulnerable to a wide range of criminal activity and financial crimes. It also allows us to keep custodial wallets on our platform — a service many cryptocurrency-based projects boast, but few have the required regulatory infrastructure in place to implement.
- Money-Transmitter/Money Service Business — In February 2018, FinCEN clarified the regulatory treatment of persons who use convertible virtual currencies or make a business of issuing, exchanging, accepting, and transmitting them. Despite the somewhat broad language used in the letter, the facts and circumstances must be evaluated to determine whether they will cause the issuer to fall under FinCEN’s MSB rules. Failure to register and meet related requirements for MSBs may subject a business and its employees to both criminal and civil penalties. Given Thor’s unique model, we recognized that we would need to register as a MSB on both the fiat and cryptocurrency side. On the fiat side, we partnered with Dwolla to facilitate the transfer of funds between users through our application. By using the Dwolla payment APIs, we were able to navigate around certain MSB requirements while still maintaining regulatory compliance. In essence, they act as the bridge between the Odin platform and financial intermediaries that process ACH transactions. Our partnership with Dwolla is critical as it allows us to offer the transactional elements of our platform immediately while we work to eventually bring these services in house.
Having established these partnerships, we were ready to get Odin to market. So that’s exactly what we did! Odin was released on October first and we never looked back. From there, our focus was squarely on customer acquisition from a business development perspective, and on shoring up Odin/Lightning Pay capabilities from an engineering and regulatory perspective.
Our immediate targets were small to medium-sized businesses (roughly 100 contractors or less) so that we could iron out the kinks of functionality and the onboarding process with businesses of manageable size that could receive appropriate TLC (tender loving care). As the process improved, we planned to move on to larger opportunities.
Which brings us to the start of 2019. We have a working product with room for functional growth, we have an established market fit, we have a roadmap for our benefits package, and we are already in talks with medium-sized companies and larger about implementing Odin as their primary tool for contractor payments and management.
It’s going to be a big year, and we’re excited to have you along for the ride!
What Lies Ahead
Our focus from a product development perspective in 2019 has two main prongs: building out Odin’s capabilities and bringing ThorCare to market.
Our approach to Odin has been to continue improving the offering suite until the platform can effectively handle every aspect of contractor management our customers need (within reason, of course). A major value the platform provides its users is the elimination of vendor redundancy.
These companies require a fairly vast array of service providers for handling their relationship with contractors throughout the 1099 lifecycle. This includes agencies to help recruit new contractors, onboarding software, digital employment/tax document storage (or even filing cabinets!), payment service providers, internal or third-party accountants, and end-of-year tax professionals—and this is just the start!
In its final form, Odin will be able to handle all of these tasks in one place. Companies will no longer have to manually transfer information from one platform to the other, or send out paper documents by mail and wait weeks for them to be completed and returned.
The new Odin capabilities we are prioritizing in 2019 are:
- a fully functioning mobile app that can receive payments, initiate bank transfers, manage contractor accounts, and is connected to the Thor Debit Card
- International payment rails for both non-U.S. companies and companies that work with non-U.S. contractors
- An integration with a 1099-compliant scheduling service provider
- Fully customizable onboarding in which companies can easily create and add documents to the onboarding flow
- Expense reporting through the mobile app
- Contractor invoicing through the mobile app
- Automated tax reporting
The exact timeline for completing each of these will be dependent on our customers’ specific needs. This is our current roadmap, but we will remain nimble and add new functions to this list as users get to know the product and how it will fit into their daily operations. We maintain that, when it comes to Odin, you can teach an old god new tricks.
Regarding our projections for bringing ThorCare to market, our timeline has not changed from our October Progress Report. We still intend to group 1099 workers in an association by geographic region or by common industry. This will allow us offer those workers access to Association Health Plans (AHP) that are structured as the type of group-plan healthcare that contractors cannot currently access on the open market.
We still envision the following timeframe for doing so:*
- Thor registers as an Association within ERISA, IRS, and state rules
- Board is formed and begins drafting of by-laws
- Develop summary plan descriptions
- Draft administrative services agreement
- Thor begins negotiation with insurance companies to underwrite plan and provide coverage
- Thor unveils Thor Care in time for open-enrollment on November 1, 2019.
*subject to change depending on legal and regulatory considerations
As always, this timeline may evolve as we adapt to new information and circumstances throughout the year, but it contains all of the basic steps required to form an AHP under last year’s changes to the ACA.
Between Odin and ThorCare, we’ve got enough work to fill the year, but we are prepared to expand our horizons for the year as our team grows and our circumstances change.
We’ve had an incredible year at Thor HQ, and we couldn’t have done it without our community. Thank you for believing in our vision of a better gig economy, and thank you for helping us make it a reality.
The Team at Thor