Building The Entrepreneurship Infrastructure Of The Future
November 10th, 2022

Positive Sum +Σ is a collective of startup community builders and Web3 futurists building the world's first decentralized value exchange protocol to record and reward all value creation in startup communities, allowing us to build more open, equitable, and inclusive entrepreneurship infrastructure of the future.

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Last week marked the end of Season 1 in Positive Sum DAO, coming back from an all-day retreat with fresh learnings, new updates, and an evolution on our direction.

Reflections on Season 1

Season 1 started in August this year, after a long pre-season (zero) setting up some of our core theses around how we think value should better flow in entrepreneurial communities to make them more open, less exclusive, and with a fairer distribution of value captured to all people creating value, not just those who put money into startups.

Our season 1 strategy and goals
Our season 1 strategy and goals

Season 1’s goals were focussed on growing our nascent community and proving out some of our impact creation hypotheses to test if the tools and value flow models we’d created in Season 0 worked!

So how did we do?

Like all new things, we had lots of learning, but not necessarily in the areas we’d hoped for, so on balance, many highs, and a couple of lows!

Our highlights, outputs, and outcomes of the season
Our highlights, outputs, and outcomes of the season

Whilst we grew the community to over 50 members during the season, we didn’t quite manage to validate the models which would have allowed us to measure and create- more impact, mostly because we lacked delivery capacity this season (with many of the core season 0 contributors using the season boundary as permission to step back as their own work lives got too busy).

Much like any volunteer project where there’s no funding in the early days, I’m learning that this is the nature of DAOs too. It constantly cycles members out based on capacity, but also allows new members to step into that void, but it is hard to maintain consistency of plans and people early-on when you’re spending precious time constantly recruiting and onboarding new people!

Looks like this will be a constant balance as we push forward, so designing capacity planning and contributor turnover into the model is going to important moving forward.

Value Exchange Platform

We released v0.1 of our value exchange to track impact creation in startup communities
We released v0.1 of our value exchange to track impact creation in startup communities

We did, however, eventually launch our value exchange platform, which is a critical part of delivering our mission in future. This free-to-use platform allows people to get and give- help on the startup journey, log their contributions, and get rewarded through visible reputation and future tokens for their impact as they add value to others.

Whilst this is a huge step, we ultimately released it too late into the season to use it to drive any meaningful growth or measure the impact which we had intended. On top of capacity constraints, this is also in part due to getting distracted on other, lower-value, tasks as we forgot to come back to our one page strategy to focus our efforts throughout the season (which is why it was there in the first place - oops!)

The True Purpose Of A DAO?

My learnings and observations of how people have engaged with us over the last few seasons has led me to think a little differently on what a DAO is, could be, or should be.

After listening to Lisa Wocken and Sarah Sonnenfeld of TalentDAO talk recently, I’m starting to think more and more that DAOs are the future of all impact organisations.

The essence of a DAO is mission-driven and purpose-led work by a group of people with shared values - for me, that’s no different than what drives any other not-for-profit or impact organisation.

DAO’s are a little different, and imho better, in that they have decentralised leadership, an autonomous set of rules that guide their ownership and governance models, and have a philosophical values system linked to Web3 principles (open source and transparent, abundance over scarcity, cooperation over control, and so on).

What is a DAO? - source: Lisa Wocken,
What is a DAO? - source: Lisa Wocken,

But…and here’s my critical point, DAO’s as internet-native organisations, sometimes treat themselves more like communities first, rather than impact organisations that are here to serve the greater purpose.

In communities, people come to chat, hang-out, and identify as being aligned with the community’s values, especially given Discord, a community discussion platform, is often their first experience of being part of that community in the Web3 world.

In contrast, in impact organisations, people are here squarely to serve that purpose and work to further it’s objectives. It’s a subtle nuance, but one that I’m seeing play out here in our, currently, more community-focussed DAO, in that:

  • We’re not treating what we’re doing like being part of an (impact) organisation;

  • We’re not onboarding people like you would employees;

  • We’re expecting everyone is here to work (to further the mission), but many are here to associate with our community only;

  • We’re not being clear about how people get remunerated for their contributions (i.e. get paid);

  • And finally, we’re not being clear on what work is currently in train, and how you can add value immediately when you show up, in service of the broader mission.

In short, the irony is, we’ve ended up building yet another online startup community and that was never the intention!

Purpose Is Primary, Community Is Secondary

Don’t get me wrong, I’m not saying a community doesn’t exist in DAOs, far from it, more so that community emerges from those showing up passionate about furthering the same goal because of our shared interest, so yes it’s a community of people that you want to hang out with, but more as a side-effect of shared purpose and aligned goals rather than that being the reason d’être.

Coming from a primarily Web2 world, I’ve always struggled with this notion of Web3/DAO being all about community-first and then letting the right ideas and products emerge. It always felt like we’re meant to be giving our time and energy to create this new world that hasn’t been created yet, not just join another community.

This new impact organisation model makes much more sense, and reframes both the opportunity, and reason to get involved. If people could turn up, tell us their skillset and capacity, and then get allocated small pieces of work to start whilst they learn the ropes before taking on more and more responsibility that feels much more like work, and what we need to actually make progress towards realising the mission.

Use of thoughtful bounties and other ‘composable work’ (h/t Lisa & Sarah) is a solution in the early days and one that other DAOs use to attract and incentivise early believers, so that’s a useful route for us to explore going forward, albeit, having to work on the system to set this up in the first place.

I do think this distinction between community and DAO is often overly conflated in some DAOs I’ve seen and sets the wrong expectation and drives the wrong behaviours up front. If you have a community-mindset first rather than an impact organisation mindset, as you bring on new members into the community, you’ll always be hoping they step up to be active participants in the DAO, when the reality is they never came here for that, so often never will.

Being explicit whether you’re joining the community vs. joining the DAO, and the job you have as a DAO member (as an “employee” of an impact organisation), is important to make sure everyone is working towards making the DAO’s mission a reality.

Web3 As A Barrier

One of the additional challenges we’ve seen here in New Zealand is that because DAOs and Web3 are new to most people here, especially in our target audience (more on that later), the people who would engage with our mission are still stuck trying to wrap their head around what Web3 is and what it means, let alone using it to re-envisage the future of work and how companies get built!

But the group of technologies and philosophies collectively called Web3 shouldn’t be the point, it’s just the how, not the why, but people often fear what they don’t understand, and it’s our job to bring them on the journey so we can work on the mission together.

The essence of what we’re doing is creating the new protocols and methods to record and reward value creation in the startup communities of the future, and that’s got a bit blurred around the noise of that being wrapped up in DAO or Web3. Given the Web3 space is moving so fast, some people can’t get their head around it to figure out how to engage with building on top of it!

As an example, I was talking to someone recently who runs incubator programmes in NZ, who was super into what we’re doing, and should definitely be working with us, but got stuck because she knew nothing about Web3 and wanted to slowly onboard into that as her learning journey before getting involved in our work. Reflecting if that’s what people need to come on the journey and participate in our work, then that should be the onboarding into this organisation too so we can be effective in working together.

Builders Vs Users & Narrowing Our Focus

Which brings us back to the audience and narrowing our focus. If I look at other DAOs and decentralised models, what strikes me is their activities are clearly defined, and less focussed on users of what they’re building, and more on the builders - i.e. the organisational designers wanting to chart this new future and build the tools, protocols, and products that sit underneath and let others create on top:

  • Deep Work is a collective made of some of the world’s best designers who all have a shared ownership of the studio. By joining Deep Work you can access the most exciting diverse teams.

  • TalentDAO is a community of organizational scientists, strategists and researchers building the world's first decentralized community-reviewed publication protocol for the social sciences and applying what we learn to help the DAO ecosystem thrive.

  • SeedClub is the leading network for DAO builders & operators - we’re creating a future where community-owned networks are the most powerful organizations on the planet.

Because we’ve conflated the startup community with our member community, we’ve struggled to keep the messaging on target and focus specifically on attracting these builders - not just Web3 builders, but specifically the entrepreneurial ecosystem builders who see the same problems and think there’s a fairer, more open way of operating and rewarding everyone in the process.

Before we can build the new products and services of the system, we need to attract the right people to build the system first, and these are two different audiences with two quite different value propositions.

Activating Purpose Through Protocols & Products

The structure of TalentDAO’s mission strongly resonates with me, and brings me back to what we’re really doing at Positive Sum.

Our core thesis is that startup communities have become zero sum games, where founders and financiers (i.e. financial capital) sets the rules for playing. Those who provide other types of critical value in the community (i.e. network capital, mentorship capital, volunteer capital, and other intangible value capital), continue to do so mostly through altruism, and rarely see any value capture being pushed back their way to allow them to do more.

We believe there has to be a more positive-sum way to build startup communities where all those who provide value share in the upside, not just those who put money into the system.

Which brings us back to the core contribution model which we developed last season and forms the heart of our newly released platform.

Protocols For Purpose

In Web3 parlance, I’m realising that this contribution model is effectively a protocol, which when running autonomously as smart contracts on the blockchain, allows anyone, anywhere to record value creation in an entrepreneurial community and capture a portion of that through crypto-economics to flow back into the community through the DAO.

Think of the DAO like a nation-state just operating at a community level - all users creating value in the economy, get a small taxation as they trade value, or create value for each other, and this taxation is collected by the government (i.e. the DAO), which is then collectively distributed through social good projects (education, welfare, unemployment), and bringing value and prosperity to the citizens (i.e. token holders).

The protocol becomes the purpose part of our impact since it recognises, records, and rewards the different types of value we care about in the ecosystem. And since it uses crypto and can be taxed, allows us to capture value every time the protocol is used.

This means this positive sum value exchange protocol is really the heart of how we change the system. The more it is used, the more it generates revenue to fund the rest of the network, allowing us to create a flywheel for growth of more decentralised products and services in future.

Services For Usage And Revenue

This means that once we have the protocol up and running and distributing capital fairly, openly, and based on value created to all participants, we can then start to build the new entrepreneurial infrastructure of the future that consumes this protocol on top.

Think of the example of a decentralised accelerator programme, if all value created during the programme - the mentorship, the network introductions, the shared intellectual capital and resources, flows through and is captured by- this protocol, not only do we start building a real-time map of where value is actually flowing in the startup ecosystem, we can start seeing the impact of both the decentralised accelerator itself, and the participants and mentors in this programme to get a sense of individual and collective value creation!

Same goes for a decentralised angel fund, or decentralised investment readiness programmes, or decentralised startup schools, or whatever people want to build on top of this protocol.

The more the protocol is used and in manifold ways to capture value (through tips, gas fees, service revenue, programme fees, etc.), the more the DAO generates revenue to allow it fuel more and more activity, and the more we can funnel that revenue to projects that create the missing decentralised infrastructure and people to build and support them.

Separating the value exchange protocol from the value ecosystem that consumes it, creates a sustainable value capture model at scale
Separating the value exchange protocol from the value ecosystem that consumes it, creates a sustainable value capture model at scale

This decentralised vision is what gets me most excited about this space, it’s not just building a DAO, it’s the ability to allow people who create value in the startup community to own that value, making it visible through community reputation and real-time ecosystem value maps, allowing us to build an equitable token model to reward them for this altruism in ways they can’t realise from the early-stage companies they support.

This is in stark contrast to the current model where startup programmes vociferously claim “these are our mentors” and gatekeep their resources - where in reality, those mentors own own their own value, choosing to lend that value to others’ programmes.

In the goodwill economy that is the startup ecosystem, no-one owns anyone else’s value unless they’re paying for it and as we know that rarely happens in this world.

So as a DAO, and as we look into the future, we intend to make this split much more explicit. The +Σ value exchange protocol will become the heart of our impact work to track our members’ value creation and impact; and then we’ll encourage others to build decentralised products and services on top that use the protocol to help create more positive-sum startup communities and ultimately generate revenue for the DAO as those products and services are consumed, allowing us to invest in new infrastructure and do more.

It’s a consolidation of the direction and journey we’ve half been on up to now, but much more focussed, and one which I hope speaks to the right audiences to jump on board and help us build this vision of the future.

A DAO Should Look and Feel Different…

My last reflection, probably more reflective of the emergent and explorative state of progressive decentralisation we’ve been in during the last two seasons, is that we’ve never really felt like a DAO.

We’ve felt much more like a community, with a group of active community members talking about what we’re doing as a DAO, but never quite feeling like we are one since there are no tokens (yet), voting was mostly done by consensus of who showed up, and there had been no wallets or treasury to manage, just people using personal funds to support the early growth.

That made sense for where we were, but as we start being more explicit about our own direction, and given the Web3/DAO aspect our approach, we did want this to feel different from day one when you showed up, not just like joining any other Discord/community, but coming here, adding value, getting a few tokens as reward to understand the system, then using those tokens to vote on new proposals, and see the value of them go up as new revenue comes into the DAO as startups use those products and services.

There’s plenty of maturing platforms out there for running many aspects of token systems and DAO operations, all still early of course, but enough that we could leverage to make this feel more DAO-like as we narrow our focus and set our work apart from just working in the startup community to working on a new startup community for all.

Where Next For +Σ DAO?

So lots of good solid lessons that I don’t think we would have learned unless we were in the thick of dao-building first-hand in the trenches. We always talked about Positive Sum as an experiment in building a more open, community-owned and operated startup ecosystem, so it’s great to reach this point relatively early in our journey, having not quite met our goals, but with some solid lessons learned in focussing our direction.

We came away from our retreat with many pages of next steps and activities: some governance-related, some funding-related, some for new onboarding, some for splitting community and DAO, some for building explicit focus on protocol versus product/services ecosystem, and so many more. Too many for a small team, but laser-focussed now on what we need to achieve next, who we need on the bus to help us get there, and thinking more about being a DAO from day one for new arrivals than we have in the past.

Of course, all that meta-infrastructure still needs to be built, but certainly I’m clearer on what that means and how much value we can create building the open entrepreneurship infrastructure of the future using web3 as a platform.

There’s plenty of scope still to come and add value to this new direction whilst we make the transition, especially if you’ve been thinking about what a more open and equitable entrepreneurship ecosystem could look like in future. Jump into our discord and say hi!

Thanks for following our journey so far.

-Dan (@LeanCTO)

If you want to find out how to get involved with our work at Positive Sum, you can look around our DAO docs (which may change based on the insights above!), jump into our Discord (and help us with better onboarding!), or just stay connected through our monthly email update - subscribe below to stay updated!

Thanks as always to our core contributors, many who are new here this season, and particularly our season 1 retreat participants who also inspired and co-created much of the content in this article – hat-tip to long-time co-founder @simianaudio; season 1 diehards @nikkim, @sallyh, and our resident Gigabrain, @diligentdeer; and great to also see the return of Season 0 contributors @PauliSosa and @DaveMeaney - thanks all, love your work!

The Crew ❤️
The Crew ❤️

*Cover Photo by Suzanne D. Williams on Unsplash *🙌

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