DAOFest: Megan Knab – Why All WEB3 Businesses Should be DAOS

Megan NAB why all web three businesses should be doubts okay hey everybody walking in welcome to dow fast and sustained web 3 i'm megan and i run a company called berry ledger we build crypto accounting software for businesses I have worked with a couple of different days over the past year d org Marketing Dow orochy b1 and one hive so across a bunch of different kinds of protocols and just wanted to share with you some quick thoughts on why I think all web 3 it would benefit from using dowse as part of their business operations so like yesterday it's too loud Oh louder ok yesterday at the Medic cartel demo day Deacon had a really good visualization of how traditional companies differ from dows but my sort of high-level takeaways are you know dows and like traditional corporations are sort of different size you know flip sides of the same coin where in normal companies you have top-down decision-making hierarchical structures compensation of employees depends on upward mobility and usually especially for software engineers it means moving out of coding and into management and also lots of information asymmetry Dow's obviously are different like implicitly just decision making power you know lies with what you put into the Dow whether it's in terms of money or in terms of sweat equity compensation is subject to voting and information is generally on chain especially financial information so there are fewer information asymmetries I went to business school a few years ago and I don't know if anybody else has a similar vibe from going to business school but they sort of just teach you about like whatever the current trends are in corporations so some of the takeaways that you know I've learned from my short time going for my MBA is you know sort of like hot topics like this issue of cultural misfits was like what you would learn in terms of like hiring where you want to bring in people who are disruptive to your organization from a cultural perspective because they help enhance innovation and problem-solving but Harvard Business School shows that cultural misfits actually don't have good tenures at businesses large corporations they don't make as much money and they stay for shorter periods of times so even though companies you know benefit from having people like that you know involves the people that are contributing don't get as much benefit so dows are obviously the flip side of that most of us in the Dow sphere are sort of cultural misfits and there's also just a greater sort of ability for different kinds of people to join in companies also the spiral framework was this very sort of envogue sort of you know business school type study it was created in the early 2000s and it was a way that for corporations to implement pockets of democracy within their companies so that they give the illusion that you know their workers have the ability to have a say in what's going on in terms of product development in terms of corporate culture development it's been applied at companies like Whole Foods fairly successfully but it's not [Music] and it does make sense you know Maalik v1 was launched here at Alpha Denver last year so it was very much an experimental technology but what I'm hoping to show you guys is how I think that it's proven that it works and can be applied in a variety of different manners and different verticals across companies in this environment in the web 3 environment so one of the companies that I work with is D org and wanted to share with you guys a case study of not only Y you know using a dao to help run your business fits with the EO ethos of web 3 but also it just makes business sense on the bottom line so if you guys don't already know quick summary about d org they're a developer shop they were incorporated as a BB LLC in vermont last year they've been an operation for almost a year a little less than a year a bunch of the team is sitting right over here and they utilize a dau stack framework and i do their accounting quick overview just like some key stats of how they performed their first year they had 10 clients contributing to revenue streams with one client providing just over half of their revenue stream which is actually not that bad for a dev shop that provides very specialized technology and as their year sort of progressed you saw that their revenue streams diversified as time went on and we expect to see that trend continue in 2020 from a compensation perspective they paid 17 contractors they start off with a core team of a few of them that really launched the company and then brought more people into their spirits they went on so you can see that the company has like a somewhat decentralized sort of like picture of how its managed and this compensation translates directly to their voting power in the so we also expect to see that as twenty20 progresses the voting power decentralizes further so now I think in November or December the court contributors the earliest contributors to the down no longer had two-thirds voting power which was a big hallmark for their company and it's just pretty cool in general okay this is like the part that I think is exciting their financial overview they were able to distribute pretty much all of the revenue that they generated back down to their workers which is something that normal companies just do not do they have high overhead it's generally fairly expensive to operate a business but Dirac figured out a way like most of the revenue that they generated went back to pay for like the actual client work some of the revenue that they distributed to their members was administrative time their administrative time sort of expense is much lower than you would see in like normal companies especially in startups professional services accounted for like a very small very small percentage they were like very tactful and like how they incorporated and then how they operated but the really exciting part and like maybe the key points to what I'm talking about is actually that like little yellow line it represents $24 which was their gas costs in 2019 so that represents hundreds of thousands of dollars worth of value over 350 transactions and it's for the entire year of operation it cost them less than it would for a monthly subscription to a payment service so it 100% makes financial sense to be from a back-end perspective to be operating at a framework for at least an expense management something that people who are like less you know comfortable with and when talking about blockchain and cryptocurrency and especially dowse is oh it's like you're using cryptocurrency isn't it like super volatile and you're gonna lose all your money potentially so did an analysis on the exchange rate for D org that they you know what they gained or lost in they're their assets into dollars and on average they had an FX exchange loss of seven dollars which is actually really not that bad when you think about the cost of capital for using ACH or wire transfers and when you adjust for their stable coin activity which is actually most of their financial activity the cost of capital is less than one dollar so very good on the foreign exchange metric as well in 2019 so we think it makes financial sense to use dows from back end perspective so does it make sense for their customers too is it too difficult for their clients to be operating to be outsourcing their development work to adel and we ran a survey from a bunch of their couple of their clients and we found no their clients are pretty happy they did good work and working with a dhow as an outsourced entity actually wasn't a big deal for them so one of the takeaways that I think is as we sort of look to mature web 3 corporations and businesses you know there's lots of venture capital money pouring into this atmosphere we should think about how we can be taking the web Three Valleys and folding them into our businesses you don't have to be a dhow entirely you can use a dhow as a tool and the like most apps use cases I think are for contract approvals voting on making sure that you're happy with contractors that you're bringing in with legal agreements or proving client engagements can use it for financial management even if you're not totally denominating cryptocurrency for us to reconcile there 2019 ebooks because all their financial data was on chain we were able to automatically reconcile about 83 percent off the bat which cuts back a ton on your accounting costs you're auditing costs that's a pretty big deal and also using it as a cap table just to show who you know has equity in your company so just do it [Music] you