DAOs have done some pretty cool stuff, amirite!?

They’ve built out decentralised exchanges and protocols, onboarded millions of people to web3, bought a basketball team…last week a DAO even sent someone to space!

Don’t get me wrong, this stuff is amazing in its own right…plus, it boosts morale and helps to capture mainstream eyeballs. Still, there’s no escaping it - anyone who’s spent any time in DAOs recently knows they’re far from perfect.

‘But we’re still early!’, the battle cry sounds.

Granted, online communities, traditional companies and tribes have a significant leg-up on DAOs, with decades, hundreds of years and millennia of experience and experimentation under their belts, respectively.

But, the cold truth of the matter is this: in many cases, it’s easier and more effective to choose a different organisation structure and avoid the headaches of operating a DAO.

There, I said it.

Before I get a tirade of hate from DAO maxis, this article isn’t a hit piece. Far from it. 

It’s a call to arms for everyone who believes DAOs are an essential cog in helping us reshape our world for the better.

For that to happen though, we need to understand their problems and how to overcome them.

This is how we think about these issues at Avenue, where we’re building the tools DAOs and web3 communities deserve and desperately need to fulfil their potential.

1. Context

It turns out it’s surprisingly tricky to find answers to super basic questions, like:

• What does this DAO do?
• What work is happening?
• Who are the main members?
• How do I contribute?

That means that 1) the barrier for new members to join is unreasonably high, and 2) even existing members struggle to navigate the DAO and find opportunities to contribute.

The issue here is Context.

Too often, the juicy info is hidden behind walled-gardens like Discord. 

Want to know more about a community? You’ll have to join their Discord, complete the verification process, then navigate a mess of channels and an onboarding process that is different for every single server. Bleugh.

Seems like an awful lot of steps just to figure out whether it’s the right place for you or not. 

And after all that, if you decide you like the vibes and the mission enough to contribute, you lack the context needed to get involved effectively. How can you get stuck in if you don’t understand the DAO’s goals, which projects have already been proposed, completed or vetoed, who the core team is and what their process looks like?

You can’t and that’s a massive problem. It’s no wonder there’s such a big drop off between joining and contributing.

Until we solve this, DAOs will continue to be a leaky bucket - with members joining and leaving again straight away, or becoming disengaged when they fail to find a way to contribute.

2. Coordination

Once members have been onboarded, they face another challenge: coordination.

Much has been written about Slaying Moloch, the god of human coordination failure (seems like a weirdly specific deity imo, but there you go), but the tools DAOs are using are really holding them back.

Platforms like Discord use a top-down approach where admins dictate what should be discussed and how, using channels to steer members down specific paths. 

This can work well at the beginning; a clear starting point helps to combat the inertia present in many new communities.

But this approach severely hinders self-organisation, an essential ingredient in operating at scale. 

It’s relatively easy to coordinate people in a top-down way in small organisations of salaried employees. Managers have enough visibility of what’s going on and it’s easier to get employees to agree on the right course of action when the person responsible for their wage is telling them what to do.

(This authoritarian approach may not be the best way to operate, but plenty of businesses do, and seem to do ok, at least in the short-term.)

If you take that same top-down mentality to a DAO it can feel like herding cats. 

Not only is it unlikely to work if you can’t rely on salaries to incentivise contributions, top-down coordination removes agency from members. 

It’s tricky to encourage community members to suggest their own work, once they’ve gotten used to receiving instructions from a core team that decides who does what. 

Ideally, DAOs should find a balance between the two. Operators should act mainly as mission-setters and facilitators, and use the creativity, brainpower and resources of the community to get work done. A great example is Cabin, where we were encouraged to ‘manifest your role’ on a group onboarding call.

We think DAOs perform best when they create an environment where emergent behaviour can flourish and contributors feel empowered to suggest their own work. This only happens when community members can self-coordinate, rather than relying on instructions from above.

3. Collaboration

Once members have the right context and the ability to coordinate amongst themselves, comes the fun part: Collaboration, aka Working Together.

That definition seems too simple, but it’s worth delving into those two words a little more.

1. Working - Work can be defined as the campaigns, projects and tasks that lead to the completion of the mission. For many DAOs, work is the focal point for the community to gather. Vibes are one thing, but many people need to feel and see progress to want to show up day after day, and work is how we move closer to our goals. 
2. Together - Sometimes we forget, but DAOs are just groups of people. Some work is best done solo, but other types of work are best done collaboratively; sometimes because it’s more effective, or just more enjoyable. Working together can enable us to produce a whole that is greater than the sum of its parts.

On a personal note, this is what I love most about DAOs - working with talented, passionate people who I may never get to interact with otherwise. The number of people I consider friends has shot up since I joined this space. Not even online ‘frens’...actual IRL, give them a hug and have a beer together, REAL living, breathing friends. 

What’s surprised me is that I don’t really care that much what I’m working on if I get to do it with these people. Stuff that would normally bore the pants off me if I had to do it alone becomes fun when I’m working with awesome people.

For me, the opportunity for collaboration is the great promise of DAOs. 

Many of the largest, most pressing problems we face today could be solved if we had better ways of bringing the right people together in the right environment, and aligning them through effective incentives.

But right now, we don’t have the necessary spaces for collaboration - contributors are forced to use open channels set up by someone else, where people who lack the context, experience or skillset to know what to do or how to do it end up derailing the collaboration process.

Of course, that’s not their intention (for the most part!) Still, defaulting to ‘everyone can participate, all of the time’ doesn’t lead to effective collaboration. In chasing transparency and engagement, we’ve fallen into a trap of our own making. We need to consider whether collaboration works better in smaller groups with fewer participants.

Tools like Discord also default to text-based and channel-based communication, but who’s to say that’s the optimal form of collaboration for structures like DAOs? It’s our view that text is great for some forms of communication, but for specific tasks you need specific tools, and text comms should not be used as a one-size-fits-all approach.

Defeating the three C’s

So, how do we conquer these obstacles and give DAOs the best chance of achieving their potential? One thing is for sure, it won’t be the work of a single DAO or tooling startup. 

We hope by outlining what we think are the most pressing problems in DAOs today: Context, Coordination and Collaboration, we can gather interested minds and build solutions that give DAO contributors the information they need to know, the tools to self-organise, and the spaces they need to work together.

If you’d like to help defeat the three C’s and stick two fingers up at that menace Moloch, then join us!

And as to how we’re solving these problems at Avenue? 

Well, we’ve started by addressing Context. After all, it’s pretty tricky to coordinate and collaborate without the right info.

We’re currently knee-deep in our Private Beta right now, where we’re working with some of the hottest DAOs out there to build web3 communities the tools they deserve.

If that sounds like fun to you, hit up our Discord (yes, the irony is as real as it is painful) to find out more.

Nelson Jordan is a co-founder at Avenue and part of the leadership team at DAO Masters.