Accidentally Inspired a DAO? | #154
September 18th, 2021: Greetings from Taichung. Last week I mentioned that I was abandoning subscriber goals but within a day I had met the goal anyway. Ali Abdaal decided to shares some links in his newsletter and we hit the 5,000 subscriber goal in less than 20 minutes. Wild. So greetings to the 700+ new subscribers who joined the newsletter. I’m excited to hear from you, feel free to reply and let me know what questions and ideas are on your mind these days. Here’s a shot I took in an alley of Taipei this week:
This newsletter is supported by gift contributions and sponsorships. If you’d like to join the 74 other people and become a paid supporter you can do so here or if you’d like to consider sponsoring a post, you can find the link at the end of the post.
#1 Accidental DAO
I want to tell you a story about how I accidentally inspired a new type of crypto-based organization, a “DAO,” and what this might mean for the future of work. I’m writing this as a relative outsider to crypto and as someone that seems to be slowly more interested and curious about the space.
Before I tell you about that and what a DAO stands for, I want to introduce you to Jonathan.
More Upside, No Debt
I don’t remember when I became aware of Jonathan Hillis’ Creator Cabins project. He had a house and some land outside of Austin, Texas, and decided to kickstart a small community around a new type of residence built from shipping containers. He called this venture “Creator Cabins.”
What grabbed my attention initially was not the cabins, but instead his Income-Share Agreement (ISA) that he was offering for people to quit their jobs and come live there. In exchange for a $20k of cash upfront, someone would only be on the hook to share 20% of any income over $20,000, capped at a 3x return over the following five years.
When people think about leaving their job, their biggest fear is typically money. This is true with people making a lot of money or without much at all. In a wage-based world, people hate not having a wage.
As a financial exchange, you might think this is a bad deal, but Jonathan was offering more than a financial contract. He was also offering use of his cabins and the support of a broader network of mentors that he built. So someone can quit their job and get access to people that might help them succeed more quickly. Or in his words:
Income sharing agreements can help new creators earn a living while they are trying to break out from the pack. If they do, they happily share the upside with the investor who believed in them early. And if they don't succeed, they can walk away without any debt.
This kind of arrangement also has the potential of giving the recipient an unfair advantage of access to investors who might have specific expertise or connections. This isn’t new. This is just happening for the first time at the individual level.
We will likely see many more usages of this type of financial instrument. Purdue is one school already using them.
So that is what grabbed my attention and I wanted to support Jonathan (but also I was excited about getting involved in his broader vision and ecosystem). One thing I’ve realized is that if I can help more people structure their work and life like mine, my life might get better because I’ll have more people to hang out with during unconventional times.
In May, Jonathan posted an update on their vision. I had been really inspired by what he was doing and decided it was time to make an unprompted gift.
The crazy thing about this is what happened next. Immediately, a friend Nate Kadlac (who has a kick-ass design school for non-designers) pledged to match my gift. Something was emerging.
Influenced by Jon Gold, the creator cabins group had been thinking about how they might leverage crypto-based solutions and these donations seemed to accelerate the planning. Within a week, they spun up plans for a Decentralized Autonomous Organization. or “DAO.” This is the crypto-native version of a corporation. I’m not going to go into depth on these organizations but you can think of the current versions as decentralized organizations with more fluid boundaries than a typical company.
Once they established the DAO, they launched a post on a crypto-native blogging platform called Mirror. This platform integrates natively with Ethereum and allowed the newly formed DAO to take direct contributions in cryptocurrency. Here’s the post:
In exchange for donations, people received a proportional number of $CABIN tokens. It took them a while to set this up and I didn’t receive the tokens for a bit so I still didn’t think much about what was going to happen.
However, the fact that they ended up raising more the $65,000 through this process was quite impressive and the fact that it was tied to a real-world project was definitely pretty interesting. I kept watching what was happening.
They used this initial funding to help pay for the stays of three cohorts of creators who were starting on a new path. Here is what the fellowship offered
A free, 1-month stay at Creator Cabins (valued at $2,800) with your own private bedroom, bathroom, and workspace
A 0.25 ETH (or equivalent USDC) stipend for food and other essentials
Access to a Camp Counselor to coordinate logistics of your trip
One month of uninterrupted time to create with a community of collaborators to support you
Your own $CABIN tokens and membership in the CabinDAO community
They’ve since moved to their 2nd iteration of this and are selling twelve different weeks to outside teams who want to come in and work in the community. You can read that post here.
A few things I noticed right away that made this stand out from traditional investments or starting of businesses:
The financial contributions are transparent. Compared to the ISA which happened behind closed doors this was out in the public, this made the effort much more able to attract attention and outside energy.
People are more willing to back such an experiment without any sort of formal business plan or formal investment framework in the crypto world. Hillis’ initial work was proof that he was serious and as energy started to emerge around the plan, everything kind of happened at once.
There are a lot of people who have made a lot of money by buying cryptocurrencies early and don’t have anything to do with the money. There is a shortage of interesting projects right now which means that anything that’s credible and has some proof of work will be able to raise a lot of money quickly
TOKENS AND THE PARTICIPATION ORGANIZATION
When I finally received my $CABIN tokens I ignored them for a few weeks. Eventually, I connected my wallet to a discord chat server and it verified that I was a token holder. This gave me a “DAO Member” role. While this sounds fancy, there isn’t anything expected. Just like a traditional donation, I can disappear and go on with my life.
But I’ve been pulled in the opposite direction. Something about the emergent properties of a DAO and the fact that I have these tokens keeps telling me that something interesting might happen if I follow on my monetary investment with my time and energy.
I also didn’t really think much of the tokens until I used them to vote in a proposal last week. I logged into a publicly available site, connected my crypto wallet, and was able to use my tokens to place 500 votes in favor of their most recent proposal for fellowships. All of this is publicly available here.
If you were to join a startup, even early employees might only get 0.1% of the total equity in the company. For the most part, no more than five people and a handful of investors would have a stake in the project. Crypto enables many more people to play from the beginning. We might expect the following things because of this:
We should see an explosion in the number of new projects started in the coming years
We should see projects be able to raise more money faster than we expect (especially now because of the existing gains parked in wallets)
More opportunity for people to get a stake through their unique skills and talents rather than connections or money
Many more failures because more projects get started
WHAT DO PEOPLE WANT TO WORK ON?
There are much better and more interesting articles worth reading on crypto (and I’ll link a few at the bottom of this post) but the interesting thing to me is how many talented young people are willing to experiment and take more risks with their careers. Not only that but they are also willing to get paid in crypto which is quite a new thing.
I think what is happening is that crypto is offering an interesting vision, one with a more optimistic future than some companies are able to offer. The people I talk to who are burned out with work tell me that they don’t mind working nor having a job. It’s just that they are not excited about what they are working on.
These new types of crypto-enabled organizations unlock new types of projects which will open pathways for different kinds of workers and leaders to emerge. The upside of a community like a DAO is that people can join without much friction. For example, if you want to join us in the CabinsDAO discord, click this link and introduce yourself.
The downside of this is that, unlike a job, the commitment is not contractual. It is going to be more aligned around incentives and motivation. This means that people that can develop a vision, give people direction, and attract capital will be at a premium.
While financial capital will still remain vital, we are shifting to a new chapter in which the people that are best able to allocate human energy are more likely to see their visions win out.
Some more reading on this topic
If you are just joining this newsletter, a great post to get started is my call for 100x more creators.
Or my post on why Stripe has the best career page on the internet
I am focused on building a life around exploring ideas, connecting and helping people, and writing. If you’d like to support me directly the best way is to consider becoming a paid supporter of the newsletter.
Alternatively, I use and love all of the following services and they give me 30% of all revenues from people that sign up. If you plan on launching a course or e-mail list and you end up using my affiliate code, I’ll gladly spend an hour helping you get set up and answering questions. Just let me know!
A reminder: I don’t check unsubscribe alerts and never look at my subscriber list. So if you feel like unsubscribing, you can do so below.