Why I Founded CreatorDAO
I started CreatorDAO a few months ago, but it’s actually the culmination of ideas that I’ve been ruminating on for a third of my life. As a venture capitalist and early crypto adopter, I’ve seen two trends emerge that I think will change the way we create and invest in media and entertainment—and each other. CreatorDAO is the convergence of these patterns, so I want to share with you how I got here.
Investing in the Creative Economy
Seven years ago, I was interviewing for venture capital jobs, which involved presenting about a startup that I thought was a good investment. I always chose Patreon. Below are some slides from that time (forgive the terrible design aesthetic).
I believed then—as I do now—that the nature of work is changing dramatically and there is a small but growing sector of the labor market that will soon become a colossal industry: creators, or, what we call today the “passion economy.” Creators are the next generation of startups: individuals or groups capable of outsized returns on comparatively small investments in a relatively short time frame.
As a VC, I invested in the creator economy by investing in companies such as Restream, Karat, Captiv8, and Jetfuel. But my job was funding innovation (e.g., GitLab), not creativity. So the question lingered for almost a decade: How do I invest in the next Mr. Beast or Jake Paul? And not just one artist or group but on a scale similar to what Y Combinator offers startups and the tech community as a whole?
Y Combinator (and angel investors and early-stage venture capitalists) provides the world’s most technically-talented people a way to innovate that is more rewarding (financially and otherwise) than working within the confines of a traditional job. There has to be a way to do the same for the most creatively-talented people in the world.
It’s not as simple as starting a venture capital fund for artists or musicians. Creators’ needs are different than startups’: both need capital and technology, but creators benefit most from the network effects of a large community.
Betting on Crypto
Here’s where crypto comes in. My interest in crypto goes back even further than my interest in creators. During my time as a startup founder in YC W11, I met Avish, founder of Vaurum Labs, a company that employed Nick Szabo, who even then was famous for writing about “bit gold”. In 2014, I received my first Bitcoin through a now-defunct company called Buttercoin. When Binance first launched Binance Labs, I mentored the very first batch of companies. In 2018, I saw Matt Huang, now founder of Paradigm, switch over from talking about companies like Yik Yak to crypto. All at the same time was meeting with high performance blockchains like Loom Protocol (Solana). All the smartest people I was meeting were in crypto.
In 2021, I watched Constitution DAO take off, demonstrating the network effect that is one of the strongest benefits of a DAO. Like Constitution DAO, most DAOs today are investment syndicates, basically the point is to raise money to buy something as a one-off. The network effects of DAOs are thus mostly used for fundraising. Its other benefits, such as picking and value-add, mostly go un-utilized.
CreatorDAO
By 2022, I knew I wanted to combine the two areas that had always been on my mind, creators and crypto. I started brainstorming with a friend I’ve known for a decade, Jonathan Wald. We realized that the three structural benefits of a DAO—network effect, picking, and value-add—intersect in the content creation space. We already saw how fundraising efforts like Constitution DAO utilized the network effect but didn’t take advantage of picking and value-add.
Let’s talk first about picking. Most of the time the act of picking is delegated to experts, in fact investors often pride themselves on contrarian thinking. Having more people involved in picking thus often leads to a worse decision. Content, however, thrives on groupthink to pick. For example, think about how Reddit picks what to surface on their front page. If a million people believe a piece of content is engaging, it is by definition engaging.
Value-add works similarly. Most value-add activities cannot be decentralized. Imagine trying to have a Tesla factory on the DAO: it would break down quickly since many of the value-add activities require management processes and centralized direction. The creator economy is unique in that value-add is already decentralized: millions of people can help a Youtuber by simply, liking and subscribing to their video.
In other words, the network-enhancing structure of a DAO hits all the sweet spots of a thriving creator economy. So CreatorDAO was born.
It’s been an intense time to launch this, but it’s been so fulfilling to see the patterns and people I have spent my career with come together. Even if you don’t have a CoinBase wallet or know how to use TikTok, I hope this is where we are all headed: scaling up creativity, collaboration, and community.