The next Apple, Amazon, or Google is unlikely to be structured as a traditional company. Instead, it’s likely to be organized as an entirely crypto-native entity to which anyone can contribute and capture financial upside.
Today, these crypto-native entities are called decentralized autonomous organizations (DAOs), although in the future, they may go by a more catchy name.
DAOs are companies designed for the internet era. Anyone with internet access can immediately become a contributor and receive financial upside.
Think about that for a second: instead of engaging in a lengthy recruiting process, signing employment contracts that you barely understand, and often, receiving no equity for your valuable work, you can choose a DAO you like and start contributing right away. Most likely, you will also receive tokens within a month or two to align your interests with those of the DAO.
If you had to redesign the corporate form from scratch assuming every person in the world has an internet connection and a digital wallet, you’d make it a DAO. There will be plenty of growing pains to be sure, but we think DAOs are inevitable.
Therein lies the magical opportunity: the next trillion dollar entity will be organized as a DAO, and anyone who can do valuable work can grow with the DAO and capture fantastical upside.
Although Bitcoin and Ethereum aren’t technically DAOs, you can think of them as early versions of such: both were open for anyone to contribute to, and those who did join captured life-changing financial upside. If DAOs get as large as we think they’ll get, contributors working for successful DAOs will generate returns rivaling those of the top venture-backed startups.
Once more people realize this is possible, we expect they will leave highly-paid jobs to work for DAOs full-time. We’re eating our own cooking by doing exactly this.
While the opportunity for DAOs is enormous, it’s important not to get lost in the sauce. DAOs have no shortage of significant problems, which will only become more apparent as DAOs grow in size.
Today, many large DAOs need the input of tokenholders before they can ship new features and products. Not only does this sort of design-by-committee slow things down to a halt, but it also reduces the motivation of talented contributors who just want to ship things.
Moreover, many DAOs have no concrete vision or strategy. Money is given to people without clear objectives, results from completed work are rarely measured, and in general, there is a lot of spraying and praying.
Things are underexplored on the legal side too. It’s difficult to find a compliant solution for paying contributors from all over the world. Establishing legal relationships with vendors and service providers is a nuisance. Finally, best-practices for DAO governance simply don’t exist.
As anyone who has contributed to a DAO knows, reality is far messier than what the narratives lead you to believe. These challenges are big, and they prevent DAOs from reaching their full potential.
The good news is that these are temporary, solvable problems.
At Reverie, we lay the groundwork for DAOs. Just like world-class companies need management, board members, employees, and consultants to help them operate, so too do DAOs.
We help DAOs design and implement strategies that allow them to grow more quickly. In short, we roll up our sleeves, grab the shovel, and work in the trenches alongside other DAO contributors.
Our work tackles many different areas. Every project’s needs are different depending on where it’s at in its lifecycle. For more mature projects, it might be designing governance processes that scale beyond a small group of contributors. For earlier-stage projects, it could be putting the pieces in place for attracting contributors and giving them things to work on that actually move the needle.
Doing high-quality work for DAOs is extremely time-intensive. As a result, Reverie is able to work with only a handful of projects at a time. When we work with a DAO, we effectively become full-time contributors for a period of time.
During this period, we place stern rules on ourselves: we commit to dedicating significant amounts of time to the DAO, avoid conflicts of interest (when conflicts are unavoidable, we disclose them), and force ourselves to get into the mindset of a significant tokenholder (only then can we make decisions that are in the best interest of the DAO).
Typically, we find DAOs we like and start contributing independently. Occasionally, DAOs reach out to us to ask if we’d like to get involved. We love hearing from people working on DAOs. If you’d like to work with us, reach out at firstname.lastname@example.org.