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  • Writer's pictureJack Purdy

Blitzscaling DAOs: Rethinking spending for decentralized organizations

What if, with the power of modern information technology, we can encode the mission statement into code; that is, create an inviolable contract that generates revenue, pays people to perform some function, and finds hardware for itself to run on, all without any need for top-down human direction? - Vitalik Buterin, 2013

Well 19-year old Vitalik, I’ll tell you since the age of DAOs is upon us.

No longer are jurisdiction-less digital organizations, capable of generating real economic activity merely ideas. Eight years later, we have hundreds of these digital organizations, consisting of thousands of people and billions of dollars of capital, demonstrating in real time how the future of work is being reinvented. What began as theory has now transformed into a burgeoning, multifaceted ecosystem of DAOs all operating with their own respective missions.

Pretty incredible if you ask me.

Source: Cooper Turley: DAO Landscape

While we’re seeing these grand experiments play out in front of our eyes, it’s worth noting that even though DAO’s are a new, innovative means of organizing productive work, they are by no means completely reinventing the wheel. Since the dawn of time, humans have explored numerous ways of aggregating capital, allocating that capital, coordinating tasks, compensating workers, etc. This has taken many forms but it eventually culminated in the familiar corporate structure we know today. It’s no accident that we coalesced around the firm as the main vehicle with which to drive economic activity either. It’s an effective means to coordinate large groups of people around a common goal.

Given that DAOs are essentially the next iteration of the firm, albeit in a more digitally native, decentralized fashion, there are a number of lessons to be learned from analyzing the ways in which we’ve built and grown successful businesses. There are legions of books, podcasts, online courses, MBA’s, you name it, covering this topic. But there’s one that appears highly relevant in the context of DAOs.

In their current state, despite sitting on massive warchests, DAOs are spending very conservatively. This is hampering growth and leaving them vulnerable to competition that could spend their way to scale faster and come to dominate their respective vertical.

DAOs need to take a page from the startup playbook: Blitzscaling.

Read the rest on Messari!

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