While traditional companies turn to consulting firms for advice, often, protocols and DAOs have completely different needs, operating mechanics, and cultures that are better served by other crypto-native contributors. Agencies serving DAOs are grappling with this need, positioning themselves to capture the $263 billion Web3 consulting market.
Over the past month, we’ve interviewed operators that serve DAOs. Below we hope to provide an overview, the biggest challenges they face, and ideas from the community to mitigate these challenges in practice.
LexDAO is a legal think tank
But first – why is there such a service?
Operators serving DAOs have 3 key advantages over traditional consulting firms.
1. Contributors gain direct ownership of the organization
Contributors serving the DAO get both a share of the value they create for each client, and a share of the organization as a whole—that is, its reputation or future revenue streams.
Ownership fundamentally changes the way people treat organizations, according to the operator. It aligns incentives better and sparks a more collaborative and open culture.
2. Open Contribution Culture
Some organizations that serve DAOs are structured so anyone can join and contribute.
If you have the skills and are valuable to the DAO, there is little stopping you from working. For DAOs that filter applicants (via interviews, reviewing historical jobs), they value a person’s ability to add value to a credential. Anonymous contributors are common among those we interviewed.
3. Better understand the problems waiting to be solved
Institutions that provide services to DAOs, whose largest clients are other DAOs and cryptographic protocols. These clients face unique challenges in development, operations, management, compensation, PR, legal, etc. that are best addressed by other DAOs.
For example, salespeople at DAO2DAO are more familiar with the challenges of lobbying token holders through governance proposals, multi-signature and how these might impact service cycles.
4. Reduced revenue volatility for contributors
Contributors can be paid in stablecoins, governance tokens, and clients’ project tokens for contributing services to the DAO. Individual contributors can earn fluctuating income over time as a portion of client project tokens accrue to all stakeholders in the organization.
Challenges of Serving DAOs
We divided the most frequently asked questions in interviews into four intertwined categories.
1. Difficulty finding and retaining contributors
Experienced contributors will jump around in different DAOs, and it is difficult to stay in one DAO for a long time.
Institutions serving DAOs are facing pressures of demand that far exceed their own capabilities. As a result, many are struggling to find talent with consistent values, a high cultural fit, and sufficient familiarity with the task at hand to execute without managerial oversight.
2. Difficulty activating potential community talents
Even for DAOs that have access to talent, getting talent within the network to actually contribute is difficult.
Operators believe shyness and confusion are the two main sources of this problem. Either the talent doesn’t understand the DAO culture (where it’s common for contributions to become contributors) and waits for guidance, or is too unsure about standardized processes and who to communicate with? remuneration? So can not actively participate in the project.
3. Difficulty aligning culture and values and spreading across the DAO
Cultural construction is the most frequently cited difficulty. Carriers are working on:
- Make sure contributors are aligned with the values
- Create culture-aligned internal processes, marketing, documentation
The operator emphasizes that culture here refers to the entire experience of being part of a DAO – from the language used, platforms, documentation, meeting formats, etc.
Every interaction a contributor has with an organization and its members will reflect the organization’s philosophy and culture, which is by far the most cited better determinant of retention, contribution quality, recruiting ability, and overall operations.
One DAO operator cited the example of Amazon’s Door desk. In Amazon’s early days, everyone in the office used recycled doors as desks, apparently to show that Amazon “only spends money where it improves the customer experience.” This spirit will permeate within the company and in every interaction between the company and its customers.
DAO operators are working hard to align their mission and create a DAO-wide culture in a layerless, asynchronous and remote environment.
1. Lack of standardized processes
Operators find it difficult to standardize processes and maintain documentation of those processes.
It is difficult for DAOs to disseminate information to contributors when determining processes, so in practice these processes are difficult to guarantee consistent use.
Some operators feel that the bloat of documentation and processes is a big drain for newbies who want to start contributing but have to navigate the documentation pages.
In general, most DAOs are striving to achieve a balance between the consumption of excessive communication, documentation, and process optimization on the one hand, and differences in the work of contributors on the other, lack of unified processes, delaying contracts, and on how to Confused to participate/join.
2. Legal uncertainty
Many DAOs have struggled in their early days (especially when they are not in the US), choosing the best entity, issuing tokens, helping contributors pay taxes, and paying vendors/non-crypto external entities.
1. Inconsistent customer experience
Aside from culture, the second most cited issue was differences in customer experience. Because there is no standardized process, good communication is not guaranteed, or because of the lack of hierarchical quality assurance, projects take longer to complete, and some clients have not had as good an experience.
2. Closing friction
In the DAO2DAO sale, operators face difficulties in the closing process, especially as DAOs can only pay for services after voting and multi-signature.
Crowdsourced solutions – at least one that works
Once contributors outline the biggest problems they face, we ask what solutions can alleviate these problems in their DAOs. We have compiled these crowdsourced solutions.
Note that each solution applies to at least one DAO we talk to, so there may be conflicting solutions that apply to different DAOs.
We only contain 5 per category.
Categories: Legal, People + Operations, Tech Stack, External
- Workers Co-op – The disadvantage is that it is difficult to find lawyers who really know the DAO.
- LCA – allows a two-tier system of investor classes.
- LLC – Makes sense for small development shops, but it’s hard to have anonymous contributors.
- Series LLC—Easy to maintain, but the disadvantage is neutralization.
- Talk to a lawyer early, not when you really need to.
KaliDAO helps launch a legally compliant DAO
People + Operations
1. Salary structure
- The Coordinape + Sourcecred combination is used to compensate for the split. This is slower but more decentralized.
- Salespeople get 10%, the DAO treasury gets 10%, and the rest is distributed by contributors. Assigned by role description for each project.
- Build a “pay a lot” culture early on. Sometimes external token holders don’t like paying DAO contributors, so build this culture early.
2. Recruit and retain talent
- Attract more newcomers by asking everyone in the community to shoulder the burden of mentoring newcomers and training them.
- Allow newcomers to be invisible.
From the Deepwork Quick Start Guide
3. Build a culture
- Encourage more 1:1 interactions (eg Donut on Slack). Getting people to know each other is very important.
- Repeat the task, narrating as much as possible.
- Limit your growth rate to spread the culture first before hiring. Ideally, DAOs always have more experienced people than newcomers.
- Make memes, art, some kind of shared “sacred” document/art using all the collective principles the community can aggregate. (i.e. loot).
4. Simplified operation
- Hire a project manager.
- Improved communication, improved coordination, improved processes, improved full-time member experience, documentation, QAing forum posts, sales processes, etc. Allocate talent/funds.
- Maintain structure, limited work quality/customer experience differentiation by adopting existing processes.
- Custom CRM, and invoice https://smartinvoice.xyz/
- Utopia / Gilded Finance
- Discord, Gnosis, Lettucemeet, Airtable, Notion, Snapshot
There are several people who manage the bridges between working groups, people and the public. Transparency is important.
If you are an open source, community driven project, be completely transparent.
If you’re building a product, spend less time on transparency.
Depending on what you’re building, balancing transparency with operations is the key. Make memes for DAO. It also helps retain talent and recruit talent.
Raidguild – join raids to kill demons
We hope this helps all DAO operators and DAO tool builders to design better solutions for decentralized coordination.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/how-to-serve-the-263-billion-web3-consulting-market/
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