HAUS Party LIVE — Scaling Values in a Growth First Economy🎉!
Season 4 Episode 8 (3/17/2022)
Join us for 🎉 Haus Party Live 🎉 every Thursday at 2pm EDT in the DAOhaus Discord
Synopsis
How do DAOs grow? What’s the meaning of scale when it comes to amorphous and dynamic entities like DAOs? This topic evolved out of our conversation about Democracy & DAOs, which itself came out of the conversation about Anticapture. It really hits close to home for us at DAOhaus as we continue to consider self management structures that reflect how to build tools for interfacing with larger cultural structures. Join us as we oscillate rapidly through different dimensions of scale and growth in DAOs and beyond!
Scale
What does scale mean to you? It’s more undefined than we would hope, especially in the DAO ecosystem. Where does the DAO begin and end? Where does it interface within the larger geopolitical bubble we are immersed in? What are the habits of scale that we’re bringing into this space? Will our future abundance be secured by the up and to the right momentum? What kinds of incentives might we contemplate as an alternative to infinite growth? How can we learn other kinds of organizational habits to move away from these unsustainable movements?
Scale and Structure
Scale is rooted in our current experience at DAOhaus as we are constantly scaling and integrating alongside other organizations that benefit from our platform. The different levels of our organization and community seem to call for different kinds of structure. As they scale, does the structure need to change to maintain their efficiency and vibrancy? As an organization, how might we reflect upon our structures to evaluate if they are still working as intended? Are there any red flags indicating it might all devolve into a structureless mess?
What is the scale of a DAO? Can one person be a DAO or do you need multiple signers? Is it 100 people? Could the whole world form a DAO? Is Dunbar’s number the limit of a DAO community? Is there a limit? Information begins to fall apart if it’s too difficult to have conversations and connection. Should we have ways of fractalizing and should that be part of the process?
Let’s remember the The Tyranny of Structurelessnes. Without structure the loudest voices in the room can capture the most influence, so we certainly require some kind of structure to avoid this, but what size is minimally viable? How do we think about the right kinds of scale for various applications? As a local consideration, how do we move away from a universal or standard Dunbar’s number and towards an oscillating Dunbar’s number, reflecting the needs of the community?
Crypto Twitter says flat orgs are stupid and DAOs aren’t working, and that organizations should start centralized and then can move to decentralization. Some of how we handle scale is with technology, so some of the reflections from the 70’s don’t consider changes over the years. It’s a moving target to narrow down the numbers of how big a community is and could be.
Scale and Bias
How are our biases implied in the upward momentum of scale?
Manufacturing is an economy of scale, but the traditional problems with optimizing efficiency in business leads to an unfortunate race to the bottom. Marketing attempts to capture market shares, requiring dynamic sizing in relation to competitor momentum. Why do we organize our industries this way? This smells like colonialism, like a crusades to conquer vulnerable territories and exploit their resources, leading to ideological wars. We must figure out an alternative methodology of scale that avoids this flavor of tyranny!
As an organization grows and builds trust and responsibility from the community, the need to scale is correlated to making and spending more money. Is there also a need for prediction in these entanglements? The scaling strategies between different social systems are very different. We often tend to see scaling and the pursuit of pure growth as undesirable, but we all like it when ETH goes up and when sentiment about DAOs improves. Is this hypocritical? Is this an inevitable and unavoidable tension?
Positive sum games are not the only games. Let’s continue to challenge each other to be intentional with our organizational designs by asking why. There are certainly good reasons for scale, but we should ensure that this movement supports our core principles and values. Scaling dramatically increases coordination costs. If we’re not prepared for that, then Moloch wins!
We should hold ourselves responsible in articulating an alternative. We might consider the formation of connectives, as a suggested alternative to the traditional collective. “Connectives diminish the need for ever-bloating organizational membranes that are trying to eat each other up.”
Scale and Narratives
We are the stewards of our own narratives, but we must recognize that there’s a potential for cultural capture. When self-interestedness scales it can amount to unchecked organizational ego failure. How can we organize differently to program our collective values into the protocols? We might focus on scaling our values instead of our organizations.
NFT communities talk about the first 100 true fans. They identify the value lying in the true believers, not necessarily in scaling up to mainstream proportions (although this is certainly not always the case). Organizations are transitory and fractionalized. Individuals in the organizations can allow for different intensities and distributions of scale, but this requires unlearning our old habits.
Let’s coordinate our language to agree upon the use of a term before trying to design towards it. When we first think about scale it seems like it might be just about adding more people, but is that necessarily true? Can we scale without growing into a huge group of people? How do variables like influence, revenue, values, and relevance factor in? What kinds of skills would we want to foster today?
Scale and Design Mechanisms
Should limits be imposed on scale? Who decides those limits? Are we going to design a mechanism that allows for world domination over the DAO ecosystem? Is there a more humble scale that we might identify, one that is more aligned with our values?
We like to consider the two pizza team: every internal team should be small enough that it can be fed with two pizzas. 🍕🍕 Once we approach a certain threshold, the tensions of the larger group drag and distract and we want to honor each other’s perspective while also feeling the tension to focus on the development. How might we increase the emotional intelligence of the organization and the individuals to ensure that scale doesn’t suppress the voices of the contributors who share in the principles that we are scaling for?
An organization can’t go all-in on optimization without sacrificing values. Perhaps scaling for values might unfold incrementally, so there’s an element of time here. What are your principles and how do you know when they’re being upheld? How long will it take to realize them?
A life well spent (presented by the DAOist and Token Engineering Commons) is researching reward systems and raising some interesting questions. How are we instituting our values? How do we rely upon honor codes? How do we feel about encoding morals into our protocols? “It’s fine as long as the project remains mutable and we can ragequit with our shares at any time.”
🌱 “Your morals are my opportunity.” 🌱 David Phelps
The well-known book Antifragile is a good reference here. As we experience challenges we become collectively stronger. Let’s learn from other organizations’ challenges. We have lots of accumulated history to look at.
Scale and Success
🌱 “What are the indexes of success that you are using to define whether you won or lost?”🌱
MetaFactory has a saying: “you cannot compete with someone who’s having fun.” With such a globally dispersed community it is fascinating to think about the interface of our local values with the global dynamics. For example, a lot of the things that American’s care about just aren’t attractive to Europeans. How might we tell the strongest story that effects the notion of success for the largest number of people and wield our “soft power” of influence with the greatest care?
We should be constantly testing strategies and preconceived notions of success. How do concepts like spiritual fulfillment or acting with integrity and dignity calculate into this “professional” landscape? We might exercise a sensitivity to what seems immediately ridiculous in order to challenge our sensibilities to expand beyond the well-trod habits of mind.
“Lets all be in kindergarten together.” Evoking childishness isn’t intended to describe immaturity, but instead welcome an innocence of fresh perspectives into the conversation. We must continue to remind ourselves that the game doesn’t need to be competitive or rivalrous. There are other games to play!
Scale and Community
The founders of DAOhaus put their own funds in for shares in the organization and what we have today is a scale of this initial structure. They invited more people into the DAO, who requested shares at a set price. Internal working circles were created when there were about 10 people. Now the core team is 30–40 people and is operating in a much larger ecosystem. At each of the steps, structure was reassessed, but the decision on day 1 to be a DAO and maintain alignment with this decentralization of power is certainly part of our success.
Being pressed to scale without consideration of community need or sensitive timings — like some challenger L1’s — is like trying to populate a technical dream land. “It’s like putting irrigation in the desert.” We need to first ask ourselves how are people aligned? “What reality are we building into?”
Some really successful communities decided to DAO up. Bankless went from podcasts to brand to followers to community to token. The culture of the community has served Bankless, with their fractionalized guilds. Alternatively, RaidGuild started as a DAO with just a couple of people and then grew.
Community-run products that receive bags of money have changed the stakes of the whole ecosystem with their cash grabs. Is “money influence” synonymous with “community influence?” The DAO narrative is being owned by the money grabs, which effects how people are coming into the space. When investors say here’s $200k for you to have a Meetup group, they want a return.
What technique might we consider to leverage against this momentum and re-appropriate the narrative back to a path that puts the community before the protocols? Might we specialize — do fewer things better — to build in some redundancy and allow growth through composability? How might we ensure that it’s performed in a sustainable and repeatable way?
🌱 “How do online communities fail to foster real human connection? How could they do better?”🌱
Are we actually failing at the connections we mean to encourage and support? Online communities have proven to build powerful friendships. Issues of friendship and trust on the human layer evokes Ivan Illich’s Tools for Conviviality, a powerful statement of the human support network in opposition to extractive industries. Here in DAOhaus, we wish to orient and optimize for a different set of values, beyond issues of pure scalability. We imagine an alternative history opposed to making the rich richer and dampening the voices of the minority.
🌱 “We are carefully and deliberately designing our transitions.”
Let’s determine to live up to it!
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