đ¤ When Should We Start a DAO?
Some thoughts on when in the course of a project it makes sense to start a DAO. Hint: we think it's probably right from the beginning.
With the launch of the full DAOHaus V2 on the horizon weâre kicking off a series of âđ¤â posts in which weâll be covering some of the common questions that come up for DAO summoners. Have something you want us to hit? Let us know on Discord, and be sure to subscribe (đ) so you donât miss the next answer filled post!
A few weeks ago we had a post up here on the Haus walls with a few steps to get your digital community started. It ended with a bit on when to start up your DAO. Since then folks in the Haus have still had questions on that topic, so weâre back to get more specific on the continued question as it keeps coming up: âWhen should I start my DAO?â
We think the answer is to start your DAO as soon as possible, but first letâs take a look at the options.
The Options:
There are really only two options the way we see it. DAO now, or DAO later. Weâre not going to bother with donât DAO, cause thatâs just silly đ
1. Exit to Community?
First up is âDAO later.â Sometimes this is called âexit to communityâ, if the idea is for the DAO to take over a project, or something like that. Either way, you have an established project, and possibly and established community, and now you want to start a DAO. This is a great idea for all the reasons weâve talked about endlessly in our posts right here. Most of all, if done correctly, this can be a process by which ownership of a project or community is passed from a small group of stakeholders to the whole community. We think this is awesome.
But, waiting until later to âDAO upâ has its own perils. Mostly, itâs just harder for the same reason itâs harder to turn a larger ship: inertia. While the spirit may be there to diffuse ownership to the community, the established norms now need to be broken. Leaders need to give up control, stakeholders need to be diluted, governance processes need to be established. None of these things are easy to do and often result in what we see most commonly, a half-hearted attempt. A âDAOâ in which, sure, some value is diffused to the community, but a limited number of whales at the top still hold all the voting power. Itâs really hard to get whales to give up their power, thatâs just life.
2. DAO First, Ask Questions Later
So, we have the alternative: start as a DAO. Here the DAO is established early in the project, maybe even before building has started. Everyone who joins the project is automatically part of the DAO as well, at least in some capacity. Joining the DAO is just part of on-board. Starting the DAO early makes it a core part of the fabric of the whole project, and the whole community. In fact, in a lot of cases weâve seen the DAO become a valuable rallying point to help the community coalesce which has accelerated growth of the project.
Of course, this comes with its own complications. There is more to figure out on the fly around things like decision-making and treasury management. Onboarding to a DAO is different than a normal company, and things like payroll are just downright weird. (Weâre working on boosts to help with a lot of this withing DAOHaus, yay đ)
Our Answer: The Sooner the Better
Around here we donât try to hide that weâre a âcommunity firstâ project. We believe that community input and community ownership are a 10x multiplier on what a project or group can do, and DAOs are built on community ownership. SoâŚ. just DAO it.
Community ownership is a game changer in ways that are hard to even imagine. Like we said, the DAO can be a rallying point to keep momentum going, but the inherent conversation and problem solving that has to happen because of the extra complications can also lead to the emergence of community behavior you never imagined. Things like the novel incentive structures and fractal subDAOs that have started to emerge in Raid Guild might never have happened if we didnât have to figure out fair ways of getting paid and incentivizing work and instead just had âemployees.â
So, what do we think? We think that option 2 is the way to go. The sooner the DAO the better. DAOs are just a different way to think about this stuff. If you have a Discord or a Forum, go ahead and start a DAO. Not just because of whatâs mentioned above, but because who nows what might happen?
Bonus: It Donât Cost Nothinâ.
Hereâs the real kicker, if you use DAOhaus to launch your DAO on xDAI itâs pretty much free. When you consider this, the real question is âwhy not just start the DAO?â Worst case, it sits there and doesnât get used. Oh well. But, cost efficient Ethereum sister chains like xDAI make this stuff fun again. You can go ahead and summon the DAO, see if your community or project members enjoy using it and see what happens. If it takes off you can migrate to main net with just a little work, and if it doesnât, oh well, it cost you .0001 cents to try it out. đ¤ˇââď¸
Fired up to get your DAO going? Start here on DAOHaus.
Need a hand? Ping us in our #support channel on Discord.
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