Building Sustainable Organizations - Dennison Bertram

i i have one finger up holding is that what that means okay and hello hello everyone my name is denison bertram uh i am going to be talking today about building sustainable organizations this is a really important topic as you probably have noticed this is kind of the year of the dao to be fair it's been the year of the dao for the past 10 years but this year i promise you it's really finally the year of the dao so what i want to talk to you about today is actually how you build sustainable dows and i'm going to walk through an example of a really exciting dao that we've been supporting but first i'm going to give a little intro on myself my name is dennison bertram i am with tali tali is a dow governance tooling platform and we empower user-owned communities right and the user-owned community is a really key phrase here what are communities if they're not owned by the people themselves and of course dao is a little bit of an overloaded term these days they mean kind of everything under the sun they mean you're multi-sig they mean your personal address they mean like a group of friends they mean a chat group with a bank account they mean a giant d5 protocol it is a really kind of overloaded term but we don't really care we kind of understand what we're talking about in this sense we're trying to build user-owned communities so tally does this by giving an ecosystem view over daos you can look into how dows are behaving who is participating the success of proposals the success of voters how well the ecosystem is functioning as well as rich data profiles on who is participating in this dow what are they doing how are they voting how are they proposing so let's talk a little bit about sustainable organizations because when we talk about dows there's a little bit of a mismatch of expectation versus reality i'm not going to bother defining some people like to parse exactly what that means what a doubt really is but it's not so relevant i think dows are the kind of thing that you see it you recognize it when you see it right like what is beautiful you know when you see it but you can't really define it right and that's a little bit similar with daos with daos though we do know what they're not right they're not single individuals they are not uh corporations these things are not daos right but dows have a lot of challenges right now dows may last for a day they may last for a year ideally they last for all time right uh but it doesn't have to be you know you're perfectly capable of spitting up a dow that lasts for a short amount of time and that doesn't mean that it's not a dao but what if you want to build a community an organization that's going to last for a long time right it's one thing to have an idea that's really powerful and people get excited about a good example might be constitution dow but there's a big question of like how do we transition ideas the fomo of the moment into things that are going to stand the test of time i would posit that among other things sustainable organizations need at least three things they need a shared vision and goal a decentralized community and perpetual funding right so let's dig into these a little bit shared vision and goal there's an analogy that i like to use about what shared vision means if you have an idea and you find yourself in the jungle hacking your way through the foliage with your community behind you or with you and trying to have everyone convinced you're going in the right direction you are missing a shared identity of what your goal is communities need to have ideas that each individual member on their own can see the path forward on their own right a big difference between organizations that have leaders that have people who take control and make decisions and decentralize communities are that in decentralized communities individuals can look at a problem can look at an opportunity and they can intuitively understand what is the right option for their community right there's some great simple examples to this right if you are building a dow around your block association right buying the constitution is probably not part of your core vision statement right likewise if you are building a neighborhood community association perhaps raising funds for a lemonade stand for the block party in august is something that's relevant to your organization but it's important to scale this idea up right you have to also communicate what your values are what kind of organization you are something that you may see in some defy dow organizations is is that there's a view of making money is something that is more important than all other things and those type of values can sometimes not be aligned with the idea of being nice to one another right these kind of alignment on ideas and values is really critical because not everyone exists in these organizations necessarily in the same time zone necessarily in the same place but one another in your community need to trust that the other community members are going to make the right decision on what the dao is existing for on their own ideally a really strong shared vision and goal is also a recruiting tool when people are waking up in the morning and say i would like to participate in a dow what dao should i participate in it should be easy for people to look at your community and say hey that aligns with who i am what i am excited about right because these perpetual organizations also need to refill their community contributors as well humans are a resource we all have time that is very limited resource not all communities can exist forever with the same members right people will come and go in a community and it's important that people who are looking at your community understand intuitively ah this is what this organization is about this is why i want to be a part of it and the other members of the community need to trust that you independently finding this organization can arrive and think ah i want to contribute this value and this value is aligned with the goals of this dow out of the box now this is not a very easy thing to do right it does require communities to spend time thinking about how to create educational materials how to narrow their message how to be very specific so that folks when they come to the community understand what's happening right and it's about more than the vision and goal right it's also around process right people arrive in your community and say hey i love this idea i want to do the lemonade stand uh how right so there's a lot of requirements around creating the the materials the understanding for onboarding how the community works along with the shared vision and if you think about it how communities function is in a way what the community is about right because a lot of people now are joining dao's not because they're looking to get rich not because they're looking to do other things they're looking to identify with a purpose right many of the dows that you see today are kind of what i describe as lifestyle dows these are things that you join and you identify with you're no longer just oh i am a contributor you walk around thinking yeah i'm a member of this community and when you meet other members of the community you're excited to meet them and you understand your shared goal and your shared purpose so decentralized community kind of touched on that a little bit this is another key thing for your community to survive decentralization is very important what we've seen a lot of is multi-sig based dows things like constitution dollar a small number of people are sort of running it something where you look at like wonderland finance recently where we had daniele saying that he was going to run the dow now right and people were making the joke that dao standed for daniele autocratic organization right why do communities need decentralization well it depends right there's kind of a limit of organizational size that humans can sort of like naturally maintain maybe you don't need decentralization if your community is four people right now i'm going to argue that that organization may not be as resilient to change and resilient to time as others but large organizations need tools to intermediate political conflicts between contributors right now we all want to assume that we're all the best interests and we're aligned on vision but even aligned visions have a habit of focusing on the differences rather than the similarities and in communities political struggles will always naturally emerge what's very important is to have decentralized mechanisms to mediate political disagreements in a way that everyone understands its function right you need to be sure that participants when they do disagree they know that there is a mechanism a final resort that will adjudicate their disagreement and it works in a fair and transparent way this is very important it's easy for early contributors to feel like they own an idea because they were there first right and that sense of ownership can dissuade later contributors who may feel like oh they're just making somebody else rich or oh you know they have a great idea but they have to ask so and so right another big important here is tooling you need tooling to make sure that everyone feels like they have equal access to the levers of solving disagreements one of the things that we see with dows a lot is that they use the decentralized nature smart contracts to intermediate payments one of the things that is very difficult is that if you are in a group of people who you've never met globally it's very difficult to trust the understanding that you are going to be paid for your work for your contributions right so having tools that support true decentralized communications and drew decentralized communities is critical to building trust among community members it's very tempting for charismatic individuals to lead people and people give their trust in them and no matter how good nature they are or goodwill they are this is not the way right so the final piece there is perpetual funding right what is perpetual funding if you think about your community well let's take a step back if you think about organizations in the real world where do they get their funding from right we mentioned before that contributors humans are a finite resource their time in this world is a finite resource their finite resource competes with their functional needs in life rent food right so how do these organizations fund themselves now this depends a lot on the kind of organization that you have right if it's a d5 protocol maybe you have an enormous treasury that's earning money off of swaps and that is oh you know a kind of part of how you run the organization that's where you get your money from but if you look at a lot of these social dows the question becomes a lot murkier if you are trying to build an organization around an idea you kind of have to think about how that idea funds the organization not because you're necessarily like oh i just want money so here's my great idea here's money but contributors have finite life spans and every minute that they put into this community is a minute that they don't put into earning shelter for themselves so you do need to find a way that these organizations can survive financially also the financial aspect is how these organizations can exist over time right if you look at constitution dao had they won it and it's not fault their fault that they didn't you can only buy the constitution once right and after you have that constitution what would have happened next could they have done a successful crowd fund for keep the constitution safe in my basement i need 50 million dollars just to do that right there's a big question mark once you achieve your goal now what and in their case buying the constitution would have only been the first step in what would have then thus become an infinitely long amount of responsibility but there is of course no financial planning around that but that's fine right what we're talking about is you need to think okay is the idea of my community finite is there like one point in time that this community is building towards and once we reach it we're done we dissolve or is my community a journey a process that all of us take together where we identify with one another as being on this journey together and if so you're going to need to keep people fed and clothed through that process right so i'm going to use an example of a dow that i created in august just to go through how perpetual funding perpetual communities might work this was very much an experiment of mine it's called dope wars and dopores was an experiment of a leaderless organization that has perpetual funding and true decentralization right so what i did was with dope wars i made a tweet and basically said i love loot how many people know the loot nft project a couple hands up here i saw a loot if you don't know it it was an nft of just words where they said like dragons uh five minutes all right good i can i can do that they did like dragons and swords and mages and stuff like that i saw loot i was like oh that's awesome except for i'm not into like dungeons and dragons right so i said let's do loot for the streets but let's build in governance so that i am not some sort of leader of the organization and let's make all the royalties on nft sales go directly to the dow right and it's important here the nft actually is a cool thing in itself but really it represents membership in the dope boards organization and as people get excited about the organization they trade it as those members who decide to leave because there's some price point that they want to exit and there's new people who come in and that energy of the community is what actually funds the community right so launch dope wars they quickly sold the the nfts on openc it was a free mint right the royalties from the initial energy alone raised about a half a million dollars from the for that dow and they instantly got to work now it's on tally so you can manage it there they use their dow to intermediate payments so you have an interesting setup here they have a pot of money right half a million dollars but the only way to get that money out is through community coordination no one person can say hey i want the money out right i can't say hey i'm president and ceo i want the money out the only way they can get the money out is if they coordinate together to do something that each of them think is cool enough that they're willing to take that money out for so what happened we set the norms early one of the other norms was if you build something on dope boars it's free and open to anyone but if you build something on dope boars you must contribute five percent of your profit back to the dow it's available to everyone but you must contribute so that we can support other people as a community so what happened an artist showed up and he said oh i drew some pictures of what the nfts look like the community were like oh i want you to do me next the dow said why don't we pay you to do everything right so they pay the guy forty thousand dollars to make the nfts suddenly the nft went from being just words to having pictures looks a lot cooler suddenly the sales activity and open seat picks up people start buying and selling them more treasury doubles to 800 000 right now they have more money and suddenly people start showing up with all sorts of crazy ideas right now had i been ceo of dope wars most of these crazy ideas i would have said no somebody showed up he was like oh i want to make a hip-hop album the dow should pay me to make a hip-hop album i would have said no right like that doesn't sound like a great idea to me turns out he's the co-founder of the source magazine the community got really excited that he said okay you can do a hip-hop album but we also want music for the video game chiptunes for like the website they made an organization together they debated it they agreed they used the smart contracts to pay out decentralized in a decentralized manner then other people saw the activity happening and they said oh i want to do a newspaper now they have a newspaper i want to do a tv channel now they have a tv channel we want to do a documentary now they have a documentary in progress we want to do a audio podcast now they have an audio podcast in process at the same time technical people showed up this one guy prama really moon math guy doing starkware he said i want to build the game on stark where layer 2. we had other people show up we want to build these marketplaces on optimism now there's an entire economy ecosystem and the most amazing thing here is is that every time someone does something cool it costs money but every time they spend money they earn more from spending that than they would have had they done anything else so you have a community that is perpetually funding itself by spending its money spending its reserves right and you can think of this idea how to apply it anywhere else right now there's one other piece here i don't know how much time i'm gonna have to get into it because there's only two minutes maybe one minute they have an erc20 token which represents the in-game currency and when it was launched it was given away for free to everyone but the dow kept none of it right a lot of dows you see have these big treasuries which are the native token and it's kind of money they can't spend the dopores dow didn't have any of its own native currency what it had to do was it had to earn it back from the community by coordinating on cool stuff so when people build new cool things now there's like hustlers you can win custom nfts there's swap meets there's all these things people have to pay in paper in their in-game currency and that gets acquired by the dow it sits there it reduces the supply of available paper what happens then the value of it goes up but it's going up without some weird pump and dumb economics it's going up without any vc investment in fact the community is extremely against vc investment they want to do everything themselves but they're naturally raising the value of their economy by spending money and doing cool right so i'm gonna have to like rush this to the end i kind of talked about this basically the idea that i want to leave you behind here is that if you're building communities make sure you set the norms early make sure they're strong if you are the one creating it that you abide by those rules that you set it up so that you cannot change your mind later and say ah you know i changed my mind now it's my doubt right you want to set up mechanisms by which the community can fund itself by doing cool exciting things in this case we believe strongly in nft membership dowser a great mechanism because of buying and sales of membership is an opportunity for the dow to earn money on that volatility and the volatility happens because people are excited so you have finally this economic mechanism where you can translate excitement directly into perpetual funding for your community and i think that's all the time i have [Applause]