Why I left my investor role to build in Web3

Yesterday was officially my last day at btov. Today a new chapter begins.

As somebody who loves learning new things, I cherished the privilege of being an investor and learning from visionary founders every day. I was inspired by their passion and dedication to become a builder myself.

Why leave my investor role? I want to get my hands dirty solving complex problems and building something of my own. And, it’s never been a better time to build. We are slowly approaching an age in which many pivotal trends culminate and intertwine – including the rise of online communities, the growth of the creator economy and the emergence of the Metaverse. Many of these trends are amplified by Web3, a term first coined by Gavin Wood in 2014 that encompasses crypto, dApps, NFTs, social tokens, and DeFi.

Something happened to me in the past year that has happened to many others in tech: I went down the ‘Web3 rabbit hole’. Only this time, I never came back up. Spoiler alert: I am not planning to come up anytime soon. The breadth of opportunity, the energy of the people in the space (and I don’t mean the speculators) and pace of innovation feel like what it must have felt like to build the early version of the internet.

Why Web3?

The internet was originally envisioned to create a world of limitless abundance where anyone could create whatever they wanted, and everyone could find whatever they were seeking. But while the internet has generated immense value, much of that value has bypassed users and instead accrued to the gatekeepers that aggregated it. Technology often mirrors its past – as the world went online and connected the distant corners of our planet, we replicated existing social structures, despite the best efforts of the builders of the early internet.

Meanwhile, a new generation of technologies is emerging with the promise to change the power structure on the internet and bring back the principles of openness and collective ownership. If the Web1 era favored publishers, and the Web2 era favored aggregators, Web3 is all about making users owners. Individual users will become units of value generation and capture through the context of cooperatives rather than aggregators.

The communities of the future

In my view one of the most important concepts that has emerged out of Web3 is DAOs. Borrowing Foundation’s definition: “A DAO is a group of people pursuing a shared goal, using a blockchain to make decisions in a transparent and efficient way. You can think of a DAO like a cooperative group that’s bound together by a set of bylaws, and those bylaws are hard-coded on the blockchain.” In their simplest form, DAOs are cross-border online communities with a shared bank account and captable.

While there is certainly hype around them, the viral emergence of DAOs over the past year is also a symptom of the demand. The financialization of online communities was already underway with Wall Street Bets. Humans have a deep desire to shape and own historical moments – as collective owners and contributors, we get a taste of the belonging and optimism that feels so scarce since COVID has taken hold of our lives. FWB’s release of the Pussy Riots NFT and ConstitutionDAO's bid for the US Constitution. Such examples demonstrate how clearly defined goals can unite groups of people at record speed.

Looking beyond the toy-like facade of many DAOs today, their promise is an alignment of incentives through skin in the game, transparency and self-governance. The result is a structure that creates pathways for people to come together from all over the world to work towards a common goal without the need for a centralized entity.

It’s clear that the hardest problems facing humankind today will not be solved by one corporation or one government alone. Such problems need to be addressed at the scale of a corporation, without compromising on individual autonomy, transparency, and ownership. They require fluid and multidisciplinary collaboration that transcend the borders of countries and institutions. As an African proverb says, **“If you want to go fast, go alone. If you want to go far, go together” – DAOs enable this at scale.**

There’s another interesting angle to DAOs: Having covered ‘Future of Work’ for the past three years, I spent a lot of time imagining what a potential future workplace might look like. Fast-forward 20 years, I envision a world in which work is completely liquid, digitally native, and not tied to a physical location. DAOs enable this framework. We are already seeing the beginnings of this today – GenZ is growing up largely online with distrust and disinterest for traditional institutions. Digital native solopreneurs will be the norm and DAOs are the vessel through which this future can be realized.

The tools of Web3 have given us the imperative to reexamine organizations from first principles. Understanding these new tools will pave the pathway for the future of work, rather than relying on normative presumptions based on the past.

A reality check

DAOs undeniably have a lot of momentum right now, but it will take a lot of tinkering and building to realize the most compelling promises.

With the great inflow of capital and people last year came a unique set of challenges. DAOs went from a couple of niche internet communities to millions of people joining and billions of dollars stored in treasuries. Pure exuberance, however, can’t last forever.

Many DAO contributors have realized that the pace of growth is not sustainable with the current set of tools. While the numbers of people joining may look good as a vanity metric, low rates of activation, engagement and retention reveal a deeper problem: many people who join DAOs today feel lost and struggle to find their way.

Many problems are a symptom of the current toolstack, where Discord leads the charge. While Discord is a great open tool for live group chats, it is not designed for community management. In order to make up for Discords insufficiencies, a flourishing ecosystem of extensions and bots has emerged, which solve specific problems but don’t address the root issue. The experience of a DAO is stitched together with bubble gum and scotch tape. This exacerbates the already unintuitive user experience of Web3. On top of this, the high level of noise in Discord servers means that joining a DAO feels like drinking from the firehose – social and informational overload.

Being a contributor in a few DAOs like SharkDAO and PieDAO, I realized that without better pathways we might not realize the audacious vision set out for DAOs. We need to make onboarding and contributing to DAOs more accessible and straightforward, without compromising on the core values of Web3.

As of today, I am making it my mission to empower DAOs and strengthen their model of trustless cooperation. DAOs are a necessary sense-making organism for realizing the opportunity that Web3 presents: to re-align the distribution of value on the internet and amplify human coordination and innovation.

Come aboard the Otter spacecraft

Helping DAOs bring on the next billion contributors is a pretty audacious mission, which I can’t achieve on my own. Good thing I am joined by two Co-Founders who are absolute experts at their craft.

I count myself lucky to be joined by Emily, who shares my vision for building a more equitable and inclusive internet but looks at the problems I described through a different lens. As product lead at SoundCloud, she witnessed the struggles of creators to earn a living from distributing their content through aggregators, and is passionate about the potential of Web3 to revolutionize how value is distributed online. Emily brings with her many years of experience building consumer products, which will be necessary in order to onboard the mainstream to crypto. As a member of multiple DAOs and the core contributor responsible for onboarding at SharkDAO, she has also experienced first-hand the challenge of participating, contributing to and managing operations in a DAO.

We will reveal our technical Co-Founder soon.

To keep up with the lightning speed of the Web3 space, we are moving even faster. Within a short span of a couple of weeks, we developed our MVP, closed partnerships with several DAOs and will go live with two DAOs in a few weeks.

Make sure to sign up for early access on Otterspace or follow us on Twitter. We have a couple of exciting things in store, including an NFT project, launch of our invite-only community and the release of our public Alpha.

As Coopahtroppa rightly pointed out, 2020 was the year of DEFI, 2021 the year of NFTs, 2022 will be the year of DAOs.

LFG! 🚀