DAOs Are the Future of the Creator Economy

Communities Beat Individuals Any Day of the Week

“I am because we are.”

This is an old Ubuntu saying. One that’s foreign to most Westerners today.

This quote shows the importance of the community. After all, no one can truly do it all on their own. 

Think about your favorite creator. You wouldn’t know who they were if you didn’t have a platform to discover them on. Or if they didn’t have software to create their stuff.

Plus, most content needs multiple people to make it good. Do you know how many shows on Netflix were created by a single person?

None.

A single person can get a lot done. But a community of people is even better. Unfortunately, there isn’t a good way to organize a community of creators.

That’s where companies come in. But this is a broken and inefficient way of doing things. As shown by the great resignation.

DAOs are here to fix that.

Organizations Stomp Individuals

The western world has a lot of creepy myths. One of the most pervasive is the worship of individuals.

We tend to praise a single person who fostered some great innovation. Think about Mark Zuckerberg. He was a college dropout who created one of the most powerful social media companies in the world. Nearly all the attention goes to him.

Personally, I can’t even name another person who worked at Facebook. Can you?

People praise Zuckerberg as a titan of social media. But the truth is, he didn’t do it alone. First of all, he was standing on the shoulders of giants. 

There would've been no opportunity for social media if someone didn’t invent the computer. Or the Internet. Or the programming language he used. Not to mention the countless investors and programmers who made Facebook what it is.

We tend to forget about all those steps along the way.

Individualist culture is obvious in media.

There’s typically a single person we praise for being brilliant. Let's think about a few examples.

• TV/movies - we praise the leading actors or director more than the dozens of people who also played a big role behind the scenes

• Musicians - we praise the singer more than the background musicians, songwriters, audio editors, etc

• YouTubers - We praise the main person behind the channel even if they rely on a team to run things

But here’s the thing. People struggle to consistently create good content.

Even creators at the top of their field don’t hit consistent home runs. Take Stephen King for example. Compare the sales of his best selling book with those of his worst selling book.

The Shining - over a million copies sold

Rose Madder - the data isn’t publicly available, but most King fans don’t like it

One of the problems with the creator economy is that it encourages individual creators. But these algorithms need lots of content. So you are incentivized to produce as much as humanly possible.

This is why most content on the Internet is shit.

Creators can have a home run every now and again. But it’s not gonna happen every day. It’s just not how the brain works.

This is why media organizations have a competitive advantage over individuals. You’ll never be able to write as much as the entire staff at the New York Times. It’s physically impossible.

But we can see the dynamics playing out on YouTube already.

PewDiePie and T-series

PewDiePie is a Swedish gaming Youtubers. He’s really popular and he’s been one of the biggest creators on the platform for a long time.

Up until a few years ago, he was the most subscribed YouTube channel. But he’s been surpassed. 

A YouTube channel called T-series regularly produces high quality videos. It’s not one person working out of their bedroom. It’s a large media company with lots of resources and people.

They have dozens of people creating content all the time. If one person has a bad day, their stuff doesn’t get published. Simple as that. This ensures a higher quality than one person can ever match.

But a single creator has to create good stuff all the time. They are going to have bad days. That’s part of life. And when they have a day where they make bad content, they’re stuck in a dilemma.

If you don’t publish it, a few things will happen.

• Not publishing means not feeding the algorithm which hurts your other content

• Viewers slowly forget who you are leaving room for competitors who publish more frequently 

• You make less money since your income is directly tied to how much people consume your content

This dynamic guarantees media companies will always beat individual creators. At least where it matters.

Media Companies

Companies are a powerful social construct. They let you organize lots of people to accomplish a specific goal. Without them, our modern world could not function.

But they definitely have problems. One of the big ones being they favor the owner class. Typically the owner and investors. These are the people who capture most of the upside from the company. 

The owner class isn’t typically involved with day-to-day operations. And they don’t have to do very much to earn more wealth. They just have to not mess things up. 

Then, there’s the business itself. Any profitable business made its money from something that scales.

• Code

• Labor

• Media

• Capital

Look at any big business. They inevitably use one of these to create wealth. And the more you combine them, the more profitable your business tends to be. For example, Amazon takes advantage of all of them.

But that’s a modern example. Let’s go back in time for a minute.

The Old Economies of Scale

Before software was eating the world, the only way to make money was with a combination of labor, capital, and media.

Think about entertainment. Movies. Television. Theaters. Not to mention advertising.

Advertising and entertainment went from basically not existing to some of the biggest industries in America. The world, even.

But like most companies, they favored the owners. Not the people creating the value. 

People love to create. Leave a kid alone and they’ll do it on their own. From a young age we love to draw pictures, create music, and make up stories.

Lots of people try to do those things as a career. But they couldn’t personally start a media business. That’s hard, right?

So they had to work for someone else.

The media businesses knew lots of people would love creation as a career option. Some would even do it for free. The ability to create something and have other people see it is it’s own gift.

So, the media companies took advantage of the situation.

• They paid people pennies on the dollar because if one actor leaves, 10 more want the role

• They normalized paying writers a fraction of the money from their own book

• They stole the IP of creators and corporatized it for profit (worst example being Bob Ross. RIP)

Most of the world's best creators did not make money from their own work. A company did. From Edgar Allan Poe to Franz Kafka and even Van Gogh.

And even the creators who got paid made pennies on the dollar in comparison to the companies. Especially because the companies outlive the creator.

A shareholder somewhere is making money right now from works by Frank Sinatra, Marilynn Monroe, Patsy Cline, and so many more. Even if the creators made decent money during their lifetime, the vast majority of the value went to the company.

But then came the Internet. And code changed everything. It was a brand new way to scale creativity. And then we saw the rise of something new entirely…

Businesses Today

The creator economy was inevitable. Again, people love to create for others.

Micmac.eth (🧱, 🚀) @Micmac132

Creation is the highest form of existence.

What are the biggest companies today? Without a doubt, social media and big tech.

It’s very simple. They combined everything that scales. And one of the things they cashed in on was the natural desire to create.

It differs from company to company. But the business model basically works like this.

• Free product - anyone can use it and this creates a natural network effect

• Free labor - users provide value to each other with content 

• Ability to make money - provide a chance for creators to earn a small percentage of the value they created

This was the sweet spot for social media. But if you’re subscribed to this newsletter, you already know that most people will never be full time creators on social media.

It’s a logistical impossibility.

Anyone can do it. But not everyone will.

This leaves most creators on a hamster wheel. Creating content for a platform that will never pay a living wage. Meanwhile, the company profits.

Companies want to profit from your creativity. They did it last century. And if they continue to have their way in the Internet era, they’ll do it again.

Thankfully, we’ve got a new way to organize.

Creator DAOs

DAOs are like companies. But much better. In fact, they might replace companies within our lifetimes.

There’s a few traits that all DAOs share.

• Decentralized 

• No formal roles

• Everyone owns the upside

Becoming a creator has been an impossibility for most of history. In the 1900s, you had a better chance of winning the lottery. And even with the “thriving” creator economy, your odds haven’t improved all that much.

That’s why media DAOs will be the future of creation.

Bear in mind, DAOs are still in an early stage. We don’t know where the technology will go 10 years from now. But DAOs are making a lot of noise.

One is trying to buy the constitution. Another raised lots of money to feed people pizza, and there’s even one dedicated to decentralizing the Internet.

If there were a DAO for the Creator economy, this is how it might look.

UBI for Creators

Most creators aren’t in it for the money. They love the work itself. And all they want is a living wage.

The DAO will use its treasury to fund creators. Probably a flat rate of $3k - $5k per month. 

In return, all the profit from their creations goes directly into the DAO treasury. There are going to be some creators who earn more than others. 

These high-performing creators won’t mind not making their own money because the DAO funded them before they started earning a lot. You get the money up front and stability. The DAO gets the upside.

After all, it’s about doing what you love. Not making a lot of money from it. 

Onboarding

There will be a council to bring in new creators. After an initial interview process, they get a 3-6 month trial period.

Then, the council will determine if they get to stay or not. But it won’t be based on financial success. But creative success. A combination of the following factors.

• Do they consistently hit flow state

• Do they show up every day

• Have they turned pro

Art is difficult to profit from. All these new creators will need to do is prove they are creating value. Improving the world.

And seeing as they will have complete control over their working conditions, there’s no reason they should fail.

Since the onboarding process will essentially be free money, there will inevitably be profiteers looking for a handout.

The council only exists to differentiate between passionate creators and profiteers.

Daily Requirements

“It's not the writing part that's hard. What's hard is sitting down to write.

What keeps us from sitting down is Resistance.”

-Steven Pressfield.

The DAO will create some form of an accountability app. Each creator will be required to sign on and work for 1 hour a day. The hope is that the creator can hit flow state and work for longer.

But if an hour has passed and they are still struggling, it might just be a bad day.

The council can determine if a creator is excessively absent and remove them from the DAO if necessary . However, the DAO will never do this for health or family related reasons.

The council will only do this under severe circumstances.

The point is to grant creators maximum freedom with as little stress as possible.

The world with this DAO

The DAO will have a powerful flywheel effect. The more creators who join, the more money will flow back to the DAO treasury.

It will finally be possible to enable creators to pursue their passion and not starve along the way. And if they are financially successful, they will be creating value for the next generation of creators.

A community of creators. By creators. For creators.

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PS: This is a rough idea for a DAO. But it seems shockingly possible, doesn’t it?

If you’re interested in exploring the possibility of actually making this DAO happen, shoot me a DM on Twitter. Maybe we can get a small community started.