The concept of a DAO is too simplistic when presented in all these examples. An organization has multiple levels and on each level there are many decisions being made constantly. Some escalate up, some don't. You cannot just expect that each decision within an organization will be decided via a DAO's shareholder voting mechanism because what will ultimately happen is, there are so many actions to vote on, shareholders will ignore most. If there were 100 shareholders, 2 voted yes, 1 voted no and 97 didn't vote. Do you proceed? This is why a board exists, to represent the interests of shareholders. How much work do you think would get done if you needed to prioritize things with a large body of shareholders on a regular basis?
I don't see anything in this idea that can't be done without a blockchain. As a matter of fact, organizations based on the same principles have existed for (at least) a couple hundred years: https://en.wikipedia.org/wiki/Cooperative
They talk about members voting on external contractors. This is not really a new concept and it's basically how governments work too. And we know stuff like this is still susceptible to curruption and bribery. The difference is that with a DAO there's nobody to take responsibility, so these problems will be amplified. I don't really think it will work in general. There may be some narrow, specific things that this will work for but it can't replace actual corporations.
Part one explores the myth that rose up in the 1990s that
computers could create a new kind of stable world: They
would bring about a new kind global capitalism purportedly
free of risk and failure, without the boom and bust of the
past, would abolish centralised political power, and
create a new kind of democracy mediated by technology and
the Internet, where millions of people would be connected
as nodes in cybernetic systems without hierarchy. This
film explores how this myth came to be by following two
groups that converged on the ideas. One is the small group
of disciples around the novelist Ayn Rand in the 1950s who
saw themselves as a prototype for a future society where
everyone could follow their own selfish desires and that
would somehow create a stable and equitable society. The
other is the digital entrepreneurs of Silicon Valley, many
of whom were also disciples of Ayn Rand, that espoused
grand visions of global utopia to be delivered by their
technology. They believed that new computer networks would
allow the creation of a society where everyone would also
follow their own self-interest but that would similarly
somehow miraculously bringing a stable and equitable
society too. They were joined by Alan Greenspan who had
also been a disciple of Ayn Rand, who became convinced
that the computers were creating a new kind of “stable
capitalism.”
Whether the technology can be molded in a way to address the need to make hundreds of "votes" or decisions a day I think is inevitable and it will happen.
I think what this author gets wrong is that a great boss is as amazing as a bad boss is shitty. People ultimately want to be led, they want to learn and be inspired. I don't seen an etheruem smart contract inspiring humanity on its own.
As usual, this is a solution in search of a problem. It adds a lot of complexity to re-implement solved problems in expensive ways, while not addressing the very real unsolved problems of corporate governance, none of which involve a lack of technology to record/tally votes.
Look at Enron, for example, setting up fake trading floors, or lying to investors. What happens inside organizations is opaque. This is a fundamental characteristic of public corporations because if shareholders got full transparency, then a rival business could purchase 1 share of stock, or have an agent purchase 1 share of stock, and then they would know everything happening inside of their competitor. A vendor could purchase 1 share of stock, and gain access to competitive pricing information, etc. So corporations are necessarily secretive. They embargo information, and they don't provide a lot of specifics. They give only roll up summaries to public investors and don't release enough information for investors to verify that the summaries are correct.
None of that will change at all with blockchain. This isn't a technological problem, where we don't have a way of correctly tallying votes, or we lack mechanisms of sharing information with investors, so thank God blockchain came along so we'd know how to hold elections.
As long as anyone can dispose or acquire a share in the open market, corporations are going to withhold most of the details from shareholders.
It doesn't matter what protocols the shareholders are going to use to reach agreement or count votes. They will never have enough visibility into the workings of the corporation in order to be able to enforce this type of micromanagement.
Going back to actually addressing the problem -- the current state of the art is to have third party auditor verify the roll up summary statements. This auditor is necessarily bound to secrecy -- e.g. they cannot disclose to shareholders the proprietary information that went into verifying the summaries. The state of the art is to trust these auditors and to have penalties for making misleading statements. However these audits are necessarily a manual and expensive process, as they require judgement to classify millions of transactions into known categories which then roll up to income and balance sheet statements. How would blockchain help here? The transaction is secret, and without the appropriate contextual information, we don't know how to classify it. Is this working capital, should that be booked as revenue for this quarter, should we do a Goodwill write off, etc? But if shareholders can't be trusted with enough contextual information to adjudicate even these types of classification problems, how are they going to adjudicate the hundreds of thousands of smaller decisions that happen every day in a firm? On the other hand, if we are relying on third party auditors, then what do we need the blockchain for?
I don't get the revolution to the n'th degree thing. Companies in the modern world are ripe for really deep chnage (weird oasis of top down dictatorships in a democratic society, centrally planned economies trying to espouse free market thinking)
Ronald Coase' theory of the firm tells us as organising anything gets easier firm sizes will shrink - and the Internet should make organising anything easier - the blockchain being a great low cost such technology.
But - why the total war approach. Why "no leader, no management, totally decentralised". I think we shall see "Programmable companies" arise but this extreme article just seems silly - we will get revolutionary improvements - be happy and be prepared don't moan it's not enough.
It's an exercise in thought and hive management. Will it work? Who knows.
My concern is that while humans can be terrible managers, an automated system that has no checks (depending on how it's set up) could end up being worse if it does not take into account dealing with unforeseen challenges and repercussions if it's dissociated from people.
The point is I guess humans can only do so much, and the question now with a DAO is:
Can we create Code/Algorithm than can align more people, "better" than a human manager could do?
Even if code only allows for "better" cooperation in some narrow dimensions, if these are important to the participants, this system will win.
DAOs are about scaling human collaboration.
It's not completely AI, but a way to understand ourselves in great masses better than we are able to to by ourselves.
Why do they pick the bad examples to serve as the argument for what they are trying to shove down our throats?
What about the Good Boss? The person you look up to, the holder of the company vision, the one that motivates you - even without talking to you? Someone who's there, simply put.
Are they so disconnected from reality that they forget we're talking about people here? Do they think people would want to work for an organization without a head, who's directives trickle down from a blockchain decision in a memo on their email boxes?
There are plenty of examples where the board had no clue what they are talking about, because there's only that much that can be carried on a report.
I know the depiction of DAO in this article is rather simplistic, but, wow.
The main thing it says to me is that the contractor of the future has to be adept at marketing and communicating to an audience of shareholders in the company, as well as doing their job.
I would guess that most contractors wouldn't make the grade according to investors. After a few rounds of abject failures, I would reckon that the investors would come up with a scheme where they hire someone to intermediate for them.. someone who could better speak the contractors' language in order to deliver requirements. While they're at it, this person could also manage the schedule. Such a scheme would make it so the technician would only have to communicate to one person instead of a large group.
Eventually this intermediator would get so busy that they'd no longer have the time or energy to communicate with this army of people, so they'd have to hire someone else to do it for them...
Another thing I'm having hard time visualizing is how would innovation work or how to avoid 'design by committee', we have hard time as it is now to avoid new thinking not getting side swiped by legacy thinking in an organization.
A good place to start would be understanding the holocracy model and why it hasn't become more mainstream yet. Companies like Valve and Medium have experimented with flat organizations to varying degrees of success (I believe Medium ended their holacracy experiment in favor of a more traditional org structure).
Personally, I believe decentralized organizations will look more like small markets than companies. You could almost argue that a completely flat organization is a market. What's the difference between a completely decentralized Uber and a "ridesharing market" of drivers and riders whose logistics, contracts, and payments are handled by a blockchain instead of people?
Employees were shocked and frustrated by the numerous mandates, the endless meetings, and the confusion about who did what.
Holacracy created new winners and losers—and it sparked fresh ideas. With experience and expertise de-emphasized, less “typical” and more junior types have been able to succeed. Introverts have benefited from the expectation that everybody speak in meetings.
Holacracy also lacks some crucial elements, such as a compensation process. The system doesn’t value seniority or the size of your budget. There are no formal performance evaluations. How, then, do you calculate how much to a pay a person, and for that matter, who makes the decision?
Holacracy’s value remains far from proven. Its creator, Robertson, says the process takes five to 10 years to be fully integrated—an eon in business.
Some 300 companies use his system—Zappos is easily the largest—and there have been failures. In early March, content site Medium announced it was abandoning it. Bud Caddell, a consultant who has studied self-management systems, says his former firm, Undercurrent, tried it without success. “I found it extremely dogmatic and rigid and overly complex, and it took attention away from our customers,” Caddell says.
