Let’s talk about what it’s actually like to build a DAO (decentralized autonomous organization) from scratch.
We’ve been building Odyssey DAO over the past six months as a community of 5,000+ members. Together, we have:
In this post, I want to share 7 practical lessons from building a DAO. By the end, you may realize that “decentralized autonomous organization” may not be the best name for what actually happens.
DAOs can attract quality contributors with a clear mission and set of values.
Odyssey’s contributors are united by our mission to onboard 1 million people to web3. Our growth lead Adrie, for example, is a single mom who wants to use education and on-chain proof of work to help people find the best web3 jobs.
Having shared values is also important. Odyssey values “quality over quantity” in our content and a community that “pays it forward.” These values apply to everything that we do - from keeping our guides concise to organizing free community bootcamps.
DAOs can execute better with a strong core team (at least in the beginning).
Although Odyssey’s community has 5,000+ members, a core team of 10 people drives most of the work.
Think of it this way - If you’re leading a startup with limited resources, would you hire 5,000 part-time contributors to work on 20 projects at once?
I didn’t think so. Whether at a startup or a DAO, it’s hard to build shared context and forward momentum without a core team.
I think other DAOs are similar - that’s why many have full-time job listings.
But wait, you may be wondering, how is this decentralized?
DAOs can decentralize through “two pizza” teams that have clear charters.
Some DAOs have a bounty board with a list of tasks that any member can work on to earn tokens. I don’t think this actually works in practice. Consider a task to write a blog post. If any member can take this task:
Instead, I think DAOs should decentralize slowly through empowered “two pizza” teams. Consider this example from Odyssey:
This bootcamp couldn’t have happened without Mark’s leadership and a small team of contributors stepping up to do the work.
DAOs should take the time to find the right people to own their tokens.
Odyssey’s first crowdfund sold out in 24 hours and raised $100K+. That success was quickly clouded when token owners started showing up to ask “when liquidity?”
In hindsight, we should’ve prioritized finding owners who:
DAOs don’t need to reinvent the wheel in how people get work done.
In some ways, a DAO is like a company that’s more open, remote-first, and flat. Therefore, many company best practices are even more relevant for DAOs:
At Odyssey, we reserve governance votes for major decisions that cannot be easily reversed (e.g., how much compensation each contributor gets at the end of a quarter).
DAO onboarding mostly sucks so do everything possible to retain great people.
One of the promises of DAOs is that they can democratize access to work. Someone from Indonesia could join a DAO, design a website, and earn crypto while building an on-chain resume (true story for Wenda, Odyssey’s product lead).
In practice, DAO onboarding is hard. At Odyssey, we’ve tried:
I’d be lying if I said that we’ve figured it out. Because DAO onboarding mostly sucks, it’s even more important to reward and retain great people. For example:
DAOs shouldn’t let processes get in the way of delivering value to the customer.
DAOs, like companies, should exist to:
Everything else - tokens, governance votes, treasury management, etc - should simply be a means toward the goals above.
To recap, here are my 7 lessons from building a DAO:
I still have much to learn myself but I hope you found this list helpful. Visit us at Odyssey DAO if you want to support our mission to onboard more people to this space!