Hello again!
“It’s a trap!” a voice in my head said, as I opened the first of many (many) letters received after I wrote to you last week.
(Thank you, all, btw. Your letters are appreciated and will be attended to).
The letter pertained to DAOs—Decentralised Autonomous Organisations—and my enthusiasm for them. I knew I couldn’t resist.
Here’s the letter:—
Greetings great Wizard! You mentioned something I am very interested in DAOs and said they “will soon eat the enterprise world, gobbling it up, gloriously.” While I hope that will happen, I’m not sure it will. That enterprise world is tenacious! Please infect me with your optimism by elaborating more about this. Many thanks!
And here’s my response:—
»»» Why DAOs will soon eat the enterprise world
About half a decade ago, I worked with a strategic innovation team doing top secret work on a project pertaining to self-organised coordination via smart contracts. Ether (ETH, the token for the Ethereum blockchain) was around $15 at the time—but I thought it was expensive, and I was a little distracted with the launch of my book How to Lead a Quest. (At the time of writing, ETH is now $4620).
What follows here in this museletter (and in the letter response above) is not financial advice. I am fortunate that—for the past 11 months—my adventures in the world of web3 have been quite fruitful. I would not recommend my friends to invest dollars heavily in crypto right now. (Or ever, for that is not my role). But I do recommend my friends invest time into learning about the wonders of web3—that is; actually using smart contracts in web3 and participating in protocol communities and governance. Now is the time for that.
What follows here is more a musing on the notion of coordination itself.
Right now, the Prime Minister of the country I happen to live within is promoting a fossil fuel company to fellow leaders at the Cop26 climate summit in Glasgow. I know. The whole point is to stop burning fossil fuels.
Since before the Kyoto Protocol Australia has been amongst the worst offenders in terms of collectively coordinating around the very challenging yet dire threat of climate change. It’s beyond appalling. Actively infuriating. And subsidies to fossil fuel industries have increased to over $10b in fy20-21. The Murdoch media empire have no doubt played a part in this (hence why we need a royal commission). As someone who has been a lecturer in environmental sciences (in a past life, over a decade ago), this is beyond baffling. How is it that we can’t seem to collectively coordinate when the root causes (fossil fuel subsidies and use) are so obvious?
To be fair, climate change is a complex hyper-object that transcends any spatiotemporal specificity. We can’t point at it. We can’t ‘solve’ climate change nor ‘fix’ it with tech (and we need to be cautious of any mechanical metaphors—it’s complex, not complicated). There are no singular solutions. But there are obvious things we can do—like remove subsidies for fossil fuels and put a price on carbon. To achieve this, or anything significant, means facing in to the coordination headwinds that hold us back.
Coordination
Consistently, this is what we must do well if we are to get anything done.
And this is why I am skeptically optimistic about DAOs and blockchain innovations can bring us.
For example, Klima DAO launched a couple of weeks ago. This blockchain protocol buys carbon credits—removing them from the marketplace so as to drive up the price of carbon (whilst making it harder for corporates to engage in cheap greenwashing). The Klima DAO (which I am an investor in) intends to become a black hole for carbon—in the past two weeks it has absorbed and retired over 7 million carbon credits (which is 23 times more than BHP required in the last year, according to the Financial Review). I’ve written about my enthusiasm for Klima DAO previously. My point being: we now have the technology (thanks to blockchain) to create “3, 3” omni-win (infinite) game dynamics within protocols themselves, wherein participants are incentivised to act in the best interests of the collective. Klima has this (thanks to the innovations of its parent protocol, Olympus DAO).
Most large enterprises don’t have omni-win dynamics. They have “make the shareholders richer” dynamics instead, which serves to perpetuate the concentration of wealth and power into the hands of the few. This is obfuscated by enterprise TrAnSfOrMaTiOn, Corporate Wellness programs and conferences with ‘feel good’ speakers to ‘motivate and inspire’ at you.
Most web2 platforms don’t have omni-win dynamics, either. Instead, we give away personal data and our art and our work to these advertising platforms, for free, in exchange for ‘likes’, ‘hearts’, intoxicating dark patterns and the balkanisation of society. (Which reminds me of this tweet).
Much of web3—by contrast—is about the decentralisation of wealth and power. And this is where I draw some optimism from.
DAOs, decentralised leadership, coordination amidst complexity, NFTs, the metaverse—all the things—are likely to remain a theme amidst my musings for some time. I can’t contain it.
Don’t sleep on this, friends. Yet also; don’t rush in like a fool. Now is the time to quest.
Speaking of…
Why I am saying ‘nay’ to most quests these days
A quest is the search for viable alternative options to the default ways of doing things. At least, that’s the dry business definition I provide. In reality, quests are a much richer and non-linear mythological undertaking, fraught with ambiguity and peril. To find genuinely viable alternative options that exist outside of conventional (known) paradigms necessitates that we venture beyond the default.
Yet our defaults are so comforting, efficient, familiar. And when leaders are ‘busy’—when they feel that they are ‘time poor’ (a symptom of late capitalism in this attention economy we share), it’s natural that they favour quick fixes and readily measurable ‘solutions’ with neat roadmaps, all packaged up in a box that can be ticked. I have tried to make this work, smuggling metamodern complexity and questing sensibilities into the heart of Enterprise Land. But because my services as a wizard come at a premium fee, the instinct many of my clients have is to ‘optimise’ their investment by getting as many people involved as possible. This is a red flag.
The most impactful and enduringly efficacious quests I have had the joy of contributing to have been with small teams of 5±2. In larger (multinational) projects, it’s been teams of small teams: quest parties of 4-6 people. All working in chorus together as loosely coupled yet tightly aligned crews with squad vibes. Or pirate vibes. Or collective blooming vibes. The pattern is: small. (And networked).
Why small? Well, for starters this is how we build scenius (collective genius). That can’t be done at scale. We need to cultivate a high trust cozy familiar vibe amongst the group first; and this takes time. Mutual respect and encouragement are key. Fellowship precedes questing.
Most executive leadership teams don’t have this. And the work of creating this sense of fellowship—as utterly vital and genuinely life-changing as it can be—is not readily valued because it cannot easily be measured. You can’t point to vibe; when it’s working, it seems effortless. (And when things seem effortless you can bet someone has invested good effort into making it so). Without fellowship or scenius vibes, any attempts at questing will be mediocre incremental renditions of safe and stale defaults. And so we perpetuate the pantomime of busyness, where hot new hero consultants are cycled in with their new flavour-of-the-year buzz-renditions of yet more of the same. Everyone incentivised to prioritise their individual/local short-term goals at the expense of mid-to-long term collective outcomes. It’s the same coordination headwinds that hobble our progress to climate change; reduced to enterprise scale.
There is a path betwixt. I’ve had the joy of working with revolutionary questing teams. But these were often founder-led, well-developed and/or highly functional teams in high margin businesses. For the rest of the world; it comes back to the coordination headwinds.
I’ve mentioned this phrase a few times. I was alerted to this via Venkatesh Rao’s newsletter, which pointed me to ‘Coordination Headwind—how organisations are like slime moulds’—a slide deck by Stripe’s head of strategy, Alex Komoroske. If there is just one link you click on in this musing, let it be this one.
This slide deck is perhaps the most useful articulation of the coordination challenges faced by folks within enterprises. It speaks to why I am excited by the fluid and heterarchical nature of DAOs, and why I only assist enterprise questing parties of 5±2 player characters. It speaks to why we opt for directionality over destination, why we must dance with ambiguity and approach strategy less-so as architects and more so as gardeners. (Yes, a theme longtime subscribers will know I return to, again and again).
I am almost booked out for the rest of this year, but if you are looking to ‘kick-off’ 2022 with genuine wisdom, wit, curiosity and savvy—if you want to 2022 bring about new and meaningful progress (and not be a mere incremental repeat)—then please do get in touch. There’s much we can do (virtually, and otherwise).
Meanwhile, here are some resources that may just assist you in your quest to learn more about web3.
Let’s not be no-coiner normies that confuse and conflate all the narratives into one garbled mess that simply reinforces the dud status-quo (and does more damage to artists and our planet than embracing the innovations that are unfurling). Let’s not become maximalists, who cling with dogmatic zeal to singular tokens. And let’s not be one of those who simply dabble—like gamblers—in dog coins via centralised exchanges.
Get involved and immersed. Participate, contribute and learn. Join discord communities, listen to podcasts, interact with smart contracts. (Again: safely, slowly. Web3 is still a dark forest; grifters, hackers, influencers and worse await your any misstep).
The world is changing, dear friend. Beware euphoria and hype. Yet more so—beware the comforting allure of stagnation amidst the familiar default. The pathway to a potentially better world beckons; but it requires all of us to participate and co-create as active players in this infinite game.
To gird you, here are a few reads that have stood out for me this year.
[Article] On the future of the blockchain—an article by Jordan Hall, a complexity thinker I have long admired. Definitely worth a read.
[Podcast] Chris Dixon and Naval Ravikant—The Wonders of Web3, How to Pick the Right Hill to Climb, Finding the Right Amount of Crypto Regulation, Friends with Benefits, and the Untapped Potential of NFTs—Tim Ferriss is great and only gets better. This episode came a week ago, and speaks to the the potentiality at play here. I would love for my artist friends to give this a listen.
[Article] A post on crypto cities and speculations on local governance, by Ethereum founder Vitalik Buterin, literally published two days after I mused upon the role of blockchain in governments in my letter response. I am biased here but I am seeing some confluence—it’s taking the discipline of a complexity practitioner to not adhere to confluence to readily, so that we can keep the possibility space open a little longer. And yet still (!).
[Video] If you prefer video, here is an artful piece made by rekt.news that speaks of the emergence of decentralised finance.
[Sources] The Defiant is a good and generally well grounded source of insight in what’s emerging in decentralised finance. They have some nice tutorials, too. UpOnly is hilariously informal yet deeply insightful. Uncommon Core is great for a technical research perspective, and is relatively balanced. The Bankless podcast is decent, and there seems to generally be a nice bias towards coordination. The Unchained podcast by Laura Shin is great, too. Generally, I have a bias towards sources that emphasise collective coordination vibes more so than ultra liberty individual freedom vibes. There’s so much rubbish and blatant misinformation out there. And so many ways to be scammed; keep your wits about you, avoid influencers who post photos of themselves on their YouTube channels, and keep it wholesome. If anything, practice your OODA loop—observe and orient before making a decision or taking any action.
Gosh, there’s so much more I could share. I have become one of those people will be a reluctant conversationalist amidst strangers at a party—until we strike upon the topic of decentralised leadership and the future of coordination (work). And then I am unstoppable, and Kim needs to make increasingly less discrete visual cues for me to ease up, lest my aspect become a little too intense.
So, again: this isn’t financial advice and I appreciate that you are doing your own research. We are still early, but you can still get rekt. Approach this all with a view of “improving coordination savvy so that we can co-create a world more curious and kind” and you’ll be fine.
The next few letters will see me wax mythopoetical once more as I dance in the domains of psychology and philosophy. Stay tuned, and thanks so much for subscribing. It really means a lot to me, and it’s a joy to write to you.
jf
PS: If you want to write me a letter—and are willing to wait a while—you can do so here.