Decentralized Autonomous Cities
Envisioning the future of human coordination with Cabin DAO founder Jon Hillis
DAOs are often framed as exciting new ways to organize our resources. And they undoubtedly are. But how we organize our resources ultimately determines how we organize ourselves—something that has profoundly changed because of the internet.
In a world where online strangers can establish trust and coordinate resources in meaningful ways, communities are no longer geographically bound. Groups of individuals around the world share economies and governance, while physically residing thousands of miles apart.
Given all this, what could the future of human coordination look like?
Our guest today has spent a lot of time thinking deeply about this very question. Jon Hillis is the founder of Cabin DAO: a decentralized city for creators. It is one of the most interesting experiments in building tokenized communities that have a shared culture, economy, and governance structure. Jon is using tokens and the functionality they enable to reimagine social contracts from the ground up.
This was a fascinating conversation - we hope you enjoy it as much as we did!
Joey: Hi everyone. I'm Joey DeBruin and I'm joined here by Sari Azout. This is “Tokens, But How?” a show where we dive into the messy details of building token based products. If you care about the ownership economy, but have lots of questions, join us. This show is made possible by Every, a writer's collective focused on business, and Seed Club, a DAO that builds and invests in communities. And we are lucky today to be joined by Jon Hillis. Jon is the founder of Cabin DAO, one of the most interesting and successful experiments in building tokenized communities. I think we're gonna unpack it quite a bit today. He's also an entrepreneur in residence at Reforge. Prior to Cabin, Jon was in product roles at Instacart for six years, most recently as Director of Product. So lots of product thoughts, and we're gonna dig into that as well today. So Jon, first of all, thanks so much for joining.
Jon: Yeah. Thanks so much for having me here. I'm really excited about this conversation.
Joey: So I think maybe a good place to start is…can you just kind of lay out what Cabin is…and I would love for you to give a little bit of the backstory of how you got to the Cabin you have today. Cause I think it's an underrated journey that maybe most people don't know.
Jon: Cool. Yeah. So, Cabin is building a decentralized city for online creators. So what we mean by that is that we believe that there's a set of tools now, with the internet and blockchains, that enable a new lifestyle where people can be a part of really dense cultures, communities, and economic structures that look and feel just like a city, but have the key difference of not being in just one place…and that these cities can actually be decentralized or distributed across a bunch of different locations all over the world. And that the reason why this is possible now is because cities are built around the dominant technologies of the era. And for the past century…that's been cars…and most of the cities we live in today, certainly in the United States, are built around cars. And we're very excited about the lifestyle enabled by this new toolkit that has evolved in the last couple decades. The backstory for Cabin is that…we are now structured as a DAO, a decentralized autonomous organization…we were not originally. I left my job at Instacart after experiencing some burnout working in Web2 and building products for the gig-economy. I wanted to go build a cabin in the woods and write some science fiction…take some time off and get away from the tech world of San Francisco that I'd been living in. Turns out, I did both of those things. Cabin went better than the science fiction…I still aspire to be a science fiction writer, but I realized after a couple months that if I spent my whole life doing that, I might eke out one book that would be as good as Neil Stevenson's worst book, you know? And, he's written like a whole bunch of really great books. So I was like, “okay, this is probably not the game for me.” I was writing though about decentralized cities…that was sort of like one of the core premises of this sci-fi novel. There's a great quote…might be Kevin Kelly or one of the other folks of that vintage…who said something to the effect of “it's easier to create the future than to try to predict it.” And so I was like, “well, okay. I mean, I'm pretty interested in this decentralized city idea. You know, I'm building this cabin in the woods…and I'm also pretty interested in the creator economy…” And I was interested particularly in the ways that the gig economy evolved…and how we could prevent some of the downsides of what happened in the gig economy, particularly in terms of commodification of labor in the context of knowledge work. And so we started a group called the Creator Co-op and it was just a group of people like myself who were trying to make a living independently online. And ultimately, as soon as the Cabin was done, about a year ago, we brought out the Creator Co-op as the first group to come hang out at the cabins and just kind of imagine what we could do with it. And sitting around a campfire late one night, a couple of us started talking about crypto and DAOs and Web3. And we ultimately decided that we wanted to create this residency program for independent online creators and do it with this new tool that Mirror had just released that allowed you to spin up a token and do a crowd fund and we were gonna use that token to let people vote on who got to come out for the residencies. That was kind of the whole plan. It was only months later, after we were deep into the residencies and a whole bunch of other people were showing up from all over the internet to kind of see how they could get involved, that we realized like, “oh, this is, this is our full-time job now!” And we're building this decentralized city and a lot of people are excited about that. So we're really just gonna lean into it and do it.
Sari: This is really fascinating, Jon. I think a few things I picked up from this thread…I mean…it's very clear that the internet has distorted our sense of place. And that's sort of an important part of what you're building. You mentioned that the Web3 toolkit enables something…and I wanna try to arrive at what specifically that is. Because as you were describing Cabin, I thought about other sorts of communities for creators or founders…maybe something like a Launch House, which is also building programming and residency programs and whatnot…but it seems like there's something different here. And I wanna try to understand specifically what that is. And a big part of it seems philosophical, based on your experience in Web2, but I wanna try to arrive at what the functional differences are and specifically, what does the toolkit enable?
Jon: Yeah, that's a fantastic question. One that I haven't been asked exactly that way before. It’ll be interesting to see howI answer this! We get compared to a lot of things. And there's the classic analogy about the elephant, where somebody's touching the trunk and somebody's touching the foot and somebody's, like, touching the ear…and they all think the elephant is very different things. And I think Cabin has a little bit of that going on because we're sitting at the intersection of a bunch of different trends. As a result of that, we get compared to the Launch Houses of the world. We get compared to other city building projects. We get compared to other social DAOs. And I think all of those are like valid comparisons in some ways. But I think you really hit the nail on the head, which is what's different here is a little bit of a philosophical underpinning. Launch House is a super interesting project…I've been following them for a long time. They have some of the same underlying goals as us around bringing people from the internet together, IRL, for creative activity. I think what makes us a little bit different is the fact that our origin comes out of a group of independent online creators trying to figure out what this lifestyle looks like. And also the fact that we are setting this crazy long term goal of building this new type of city. This is something that was best articulated by Jess Sloss from Seed Club: Online communities now have this new toolkit that you mentioned which includes the ability to create easier economic structures and governance structures that people can use to coordinate…and that toolkit adds the ability to do things more effectively to traditional internet communities. You can kind of create these big, exciting adventures for people to go on. I spent a whole lot of time in online communities like Reddit throughout middle school and high school. And people would talk about big, crazy, fun ideas…but we didn't have the coordination tools to actually pull them off. And I think DAOs, in particular, really shine in setting these big ambitious goals and then actually bringing together the resources and bringing together the coordination tools to actually execute on them.
Joey: Yeah. That’s such an interesting way to put it. Anytime you look at Web3 purely as a technology, and you miss the culture and you miss the vision, it really just is a flat argument.
You can't separate those things. I think the point is not to separate them, but I'm curious…in what you're doing right now, where is the toolkit most valuable? What are some of the things that you're doing now that you feel like you would really struggle to do if you didn't have this toolkit available?
Jon: Yeah. So I wanna be really clear about something in our origin story that I think is important, which is that we did not start as a DAO. We spent a long time not being a DAO and didn't really intend to become a DAO. And so I think your point here is really important, which is that the actual value you're creating within the context of a community is the foundation…and these tools, at best, can enable that. And so that's been really important for us…not to think of ourselves first and foremost as some sort of crypto thing, but as a group of creators coming together to build a city. The crypto part comes after that, and is a valuable toolkit. And when I think about that toolkit, there's probably three parts that are particularly important. If you think about what makes up a city, there's a couple of key components. One of them is basically self-governance. And this is, I think, the most important part of what Web3 creates…and the part that we're still so far in the early innings of that people don't even realize it’s the most important part. They like to think it's speculative DeFi or like JPEGs…both super interesting for various reasons that people don't give them credit for…but the most interesting thing here is actually the ability for people that don't know each other or trust each other online to coordinate and to govern resources collectively. Collective action problems are at the core of why humans aren't good at doing things…and so if you have a new toolkit that actually allows people to overcome collective action problems by pooling the resources, and then having these new tools for managing them as a group in a sovereign way. That is a big deal. So I think that's the first part. The second part is, of course, that economic bootstrapping makes sense and is important. You know…the ability for tokens to help create new economic structures, create experimentation within economic structures and help solve cold start problems. Those are all valuable things that I think are better understood. And then the third is identity and reputation. What states started out doing for the most part was creating identities for people that could be tracked and used for various purposes…mostly at the time taxation, but the ability to actually build people's on-chain identities and reputation creates a lot of value that can then be really easily transported across the ecosystem in the context of knowledge work. And so if you think about this, what we have now is: anybody has the toolkit to print their own currency, mint their own passports, and then spin up their own governance…their own Congress. Right? And that's a toolkit where if you told the founding fathers that anybody could do those things, they would've been mind blown and they would've probably come to very different conclusions about the possibilities of governance than the ones that they came to.
Joey: Yeah. One more question to follow up here, because one of the things I find quite challenging about working in this space is that the same term can be applied in so many ways. And decentralization to me is maybe the biggest example of that. So when people say decentralization, they sometimes mean…if you think about a cluster of stuff…the more that it looks like a sort of flat blob that's very decentralized, as opposed to having a lot of stuff clustered in the center…or you could think about decentralization as: there are central powers of authority, such as the US government, and there are others, and so this is another way of establishing a structure that is not reliant on a traditional central form of government. What is a decentralized city? In which ways is it decentralized?
Jon: The most important part of a decentralized city to me is the distributed nature of the geography. The fact that we can now have cities across the world that are these pockets that have shared governance, culture, economy, in a high density way, shared across a large group of people in the same way that you would in a city, but that they no longer all have to be in the same place. So the fundamental premise here is a geographical decentralization…and I think that goes hand in hand with other forms of decentralization…along the lines of what I was just talking about…that the blockchain toolkit enables, and I would categorize those as a sort of blockchain Leviathan. The sort of fundamental premise of post enlightenment, Western political theory was that you had to have centralization in order to function, because that was the only way to overcome the Leviathan problem, which has been framed more recently as like a tragedy of the commons problem. And I think this toolkit enables a type of decentralization that no longer relies on a human Leviathan. You can now have a blockchain Leviathan.
Sari: There's another term that often gets conflated or used to mean different things. “This network is owned by its users.” That’s just the fact that the network uses NFTs as membership, and oftentimes it's economic value. I think you mentioned governance, economic value, and reputation, and tokens can be used to accomplish a combination of those things. And I'm curious…what is your opinion on which of these is more uniquely enabled by the blockchain? Which of these is more important? For example, governance…how much do people care about governance? In a world where attention is the scarcest resource, is “ask the audience” the winning strategy? So I'm curious if we could just get into some of these things…
Jon: Ask the audience is definitely not the winning strategy. And I think this is actually a common line of questioning that DAO skeptics go down, that often constitutes a sort of misunderstanding of the value of these structures. People think DAO means direct democracy all the time, and ask the audience, and run votes on everything…that is a terrible way to run any organization. Now, if we were just starting from scratch…and this is hard for people to do…but if you sort of imagined that you'd never seen an organization of any kind before, and I described how companies operate, you would probably also think that that was a pretty terrible idea. Like ultimately you have one person who is ultimately responsible for all of the decisions, even at these very large companies at scale. And that also sounds like a pretty bad idea. And so I think DAOs are not about maximalism or extremes, right? They're about opening up a new territory for exploration. So one of my sort of greatest academic influences and heroes is a woman named Elinor Ostrom, who studied common pool resource problems and sort of made the case that the entire field of political science is about these common pool resource problems. And she studied irrigation systems and all these great examples of ways that these self-governing systems have been structured in the past. Ultimately what she came to is: political science needs to be a more experimental discipline. I was very bought into this. I did my senior thesis in college on this question and I was like, “okay, I'm gonna run these experiments where we have some software with a common pool resource problem built into it. And we get together groups of people and we try to see how they coordinate and how changing the information structure or their communication capabilities changes their ability to solve these problems together. And the problem with that is…you just can't extrapolate that much from doing these small scale experiments with a bunch of college students, or even really any experiments like that. The assumption, at least at the time, was that you can't just go spin up your own nation state and try things out. You know? There's no test net for nation states. And now there kind of is. And I think this is the big difference…is not like, “oh, now everybody can vote on every single proposal.” It's like, now we can go out, and thousands of different organizations can simultaneously run thousands of different experiments with thousands of different governance structures. And we can figure out what works, because designing a governance structure is really hard. And if you read the Federalist papers or look at what went into the Constitution, it was a tremendous amount of debate and discussion about how all these sorts of checks and balances come together to create a good governance structure. And then they had to just write it down once and it had to work for forever, which is crazy, right…now we can actually more literally experiment with these things.
Joey: Yeah. It feels like we're talking about some of the sort of “gotchas” that typically exist out there for DAOs…this whole idea that at some point you start really getting into the territory of traditional forms of equity or ownership. Let's say you have a project and you want to distribute a token and it's a small team and you want to use that for ownership. And maybe that has access to financial rights down the line. This starts looking a lot like security…and I think those can sometimes be the, “aha. There's no value here.” I think maybe part of what I'm hearing is over time, these things blend together to where you're saying a lot of what we're building is just more sophisticated ways to build governance structures with technology so that people can run experiments, and people can iterate on them. And so we're creating all of this core infrastructure that at some point blends into the rest of the world. This may be a total can of worms question… But one of the things I love about Cabin and just following you is that it feels real. It feels human. You have tweets of you with cows and pigs and like people sitting around a campfire and it's great. It's very refreshing that somehow this is in the bucket of Web3. I'm curious, when you think about a decentralized city…like, that means you have these little nodes that are also in counties, in states, that are governed by those states. What does this look like now and down the line…how does this decentralized internet community interact with the physical forms of establishments that we have now? And how does that look in the future? Does it all just move to these structures of governance that we're building digitally first? Can you talk about that?
Jon: Yeah. Thank you for bringing the conversation back down to earth. Sorry! This started off with you making me promise I wouldn't get too theoretical. So let's talk about this very practically, right? I think the fun part about Cabin is that we get to think about big philosophical questions, but I also have to make sure the cows have enough hay, and that's a fun thing too. I am not some grand libertarian exit from society type.I think that existing governance structures and those sorts of things are really important for a lot of reasons, and basically the only way we currently do successful public goods production as society. So I'm not trying to get rid of that stuff. I do think that there's a lot of value in having as much of governance as possible be very localized and provide a high degree of autonomy to local communities who kind of want to do things the way they want to do them. And if you look at pre-enlightenment thinking…or even just non-Western thinking that was coming out of Europe…the last time people started taking some of these ideas really seriously…what you find is that a lot of human societies for a long time were actually sort of built around this principle that the most important thing is your individual autonomy and your ability to live with small groups of people in that autonomy. And I would actually make the case that that's pretty feasible today, right? Particularly in places like the United States, which tend to value federalism and that sort of structure inherently, and also where there's a lot of open land still available where people are not currently living in large populations. So like there's a reason why we started the first location of Cabin in the Texas hill country. Not only is it a beautiful natural environment and I happen to have grown up in the Austin area. But ultimately this area is very amenable to this type of living, right? Speaking of Sari’s question about everyone getting a sort of vote on everything, in California I used to literally get letters in the mail about petitions for people to trim or cut down trees in the neighborhood…or like, people would have to go through these incredibly complex processes to just build anything in their house, even if it wasn't even visible to neighbors. That's the way that I think liberalism has unfortunately calcified, and to kind of contrast that, when we came out here and started building…we've now built a lot of infrastructure. Right? Wells and septic systems and solar panels and houses and saunas and new cabins and stuff. All of that was done with a single, remotely filed $100 septic and well permit. That's the only real interaction that the government wanted to have with what we were building. And so if you find the right places, I think there's actually a lot of room to create these autonomous environments, where you can build communities the way that you wanna build them without a lot of negative impacts from existing governance structure.
Joey: Just playing that out maybe a little bit…cause the reason I think that it would make sense for me to have a decentralized city full of all these little nodes is that there's some economy of scale to having a bunch of them stitched together. And I think that's the same thing as a city, right? There's the economy of scale of being in Austin, and you get access to the same septic system so that you don't all have to build your own, but the economy of scale comes with a cost of overhead. So you can't just drill into the ground because you're basically drilling into shared resources at that point. So what is the relationship between those things? How do you still get the same autonomous ability to do what you want that you're describing, but still benefit from some economy of scale, which would be the purpose of having this like a decentralized city.
Jon: Yeah. That is a great framing of the question. I haven't quite articulated it in this way, but I think the economy of scale has changed. Right? So to your point in traditional cities…most of your initial economy of scale comes from infrastructure, the septic system and the power plant and whatever…And then only later, once you've sort of reached scale, do you get the economies of scale that come from creative output. Jeffrey West at the Santa Fe Institute has talked about the super linear scaling capabilities of creative output within cities. There's more sort of creative energy in certain cities than maybe in small towns because you get so many collisions of people coming together and we've ended up in a world now where, to your point, because we've built out the environment in these existing cities…and because we've developed these regulatory structures, where we actually are pretty anti building infrastructure and anti building housing in a lot of existing cities..the infrastructure piece of it is now cheaper and easier to do both because of the regulatory regime and because of improvements in technology, like solar panels and satellite internet in remote areas. And the economy of scale doesn't come from the physical infrastructure, which is no longer really a benefit, but now comes from the ability to connect together with other people. And so that tends to happen online first. You find your community of people online and you start talking about ideas and then you can manifest that in the real world. And so what these locations share is a culture and an economy that has sort of been abstracted to the cloud in a way where you can get those economies of scale in different places.
Sari: Jon, help me understand how Cabin is structured. Who owns Cabin? Is it venture funded…does owning a Cabin token give you any sort of rights to economic cash flows, or is it a governance token? I'd love to just understand specifically how you thought about building the organization from scratch.
Jon: The way that we're structured is a combination of sort of a principled approach and the realities of the broader regulatory environment that we live in. The best way to think about Cabin -- and I think any DAOs at scale will look like this in the future -- is that we are not a monolithic entity. Increasingly we are a constellation of other organizations, and those other organizations can be DAOs, they can be individuals, they can be these popup groups that come together as fellowships to accomplish a certain goal within the community. They can be more traditional LLCs or other legal structures. And what Cabin is doing is creating the network for all of those entities to interact. So let's take the neighborhoods just as a very tangible example. So Cabin is made up of physical locations and those locations are independently owned and operated. Each Cabin neighborhood is owned by a person or a community of people that are responsible for that property. They own it, they operate it. And this is, I think, really important to kind of meet the principle of decentralization and autonomy…of pushing control of things to the edges of the network. There's other types of organizations that operate within Cabin’s network, like guilds. We have a city council that helps with resource allocation for funds that are in the DAO treasury. The DAO itself is set up as a UNA, an Unincorporated Nonprofit Association, and the entities within Cabin’s network can then interact. The token holders have governance rights for the organization. So we use a pretty typical structure for DAOs right now, which is a multisig and snapshot. The city council controls the multisig and executes the will of the DAO as voted on on snapshot. We use quadratic voting in order to limit the impact of whale token holders. And all of that, I think, is open to further evolution in the future. But what that ultimately means is that we have a way to sort of do the economic development of the city via the existing token structure. But over time, most of the value will sort of accrue to the edges of the network. And then the way that people will participate in the network is by staking tokens in order to be a Cabin neighborhood or be a Cabin guild, and that will create value for the network overall.
Joey: I feel like there was so much dense information in there. I'm gonna try to relay it back to you, just to make sure I understand. So each Cabin node is owned by a person participating in the Cabin ecosystem. The Cabin ecosystem is sort of an economy that is mediated by the Cabin token, or at least currently. And if we think about these decentralized cities. The infrastructure is kind of built locally at each node, but where there's economies of scale is really in the creative output. Like in San Francisco, 20 years ago or something, when the creative energy was great before it got bad. And so the economy is able to benefit from the value of that kind of economy of scale, I guess. How, how does that work? So I’m imagining that one node benefits hugely from this creative whatever…they build something that then generates a bunch of revenue and that money essentially goes back into Cabin. Is that a tax? I mean, how does that work in practice?
Jon: Yeah, so we're still pretty early in figuring this all out, as is everyone else. And I think we are taking a very iterative approach to governance design, token design, et cetera…and also trying to be very careful about making sure that we're doing this in smart ways for both the community but also regulatorily. The current theory here that we have is that staking is gonna be a really important part of how the value flow works in this network. What I mean by that is that there's this concept that was popular for a minute in 2018, and in a classic crypto way people thought it was maybe the next big thing, and then it sort of fell off the radar for a couple years. Most things that end up being things in crypto go through these sort of cycles. Right? DAOs did the same thing. NFTs had a kind of moment in 2017 with crypto punks and then sort of fell off the radar for a couple years. There's another one of these that I think may be coming back around called token curated registries, and the idea behind token curated registries is basically that…much like the early internet with things like Yahoo or Craigslist or something…one of the most valuable things you can do is curate a list of things. It's a pretty basic concept, but it can be used in a lot of ways. One way we're thinking about using it is that you can imagine the neighborhoods of this city as just a list of places. If you think about it like an internet native city or a blockchain native city, it's not going to necessarily own the land itself. It is the representation of the places that are part of that city. And so essentially the way this would work is you have a neighborhood and you want to attract some of the amazing creators in the community to come out, say, to live in the community or to help build the community. And so you're gonna be incentivized to essentially have a stake in the broader network. And so the way that this sort of staking works or these sort of token creative registries work is that you would buy a Cabin and then you would stake it. You would say I'm willing to put my Cabin up. As a kind of investment back into the network. And it's this kind of magical model where it both means that people have made an investment into the network. They have skin in the game, but they also have ownership. They still own the token and they can take it back. But it creates a dynamic where now people are staking into the network, and as a result can access the benefits of being a part of that network and also have ownership in that network.
Sari: I'm curious, how much sleep do you lose over thinking about what is like the right flow for these staking value things versus the more sort of utility driven things. I imagine to get people into this community, it's probably more effective for you to just send emails to ten really interesting people that you want to surround Cabin with. And so I'm curious, it seems like there's like a utility piece of this. Is the Cabin nice? What are the benefits of being in this Cabin? There’s the sort of very functional equation that consumers are making in their heads every day. And then there's systems that live on top of that. And I'm curious…how much time do you spend on balance on each of those?
Jon: Yeah, this is a question I constantly ask myself, because I sort of need to recalibrate. I think that for the first year, I spent exactly zero time thinking about tokens and governance, right? Like it was all just community building, and that's where you have to start. None of this other stuff matters one iota if you are not bringing together great people in a strong community. And so that's definitely the place to start. Only after you have a really strong community going, do you then need to start thinking about, “okay, how do we make sure that we're providing value and utility and scalable structures for this community.” So now it's becoming an increasing part of how I spend my time. I would say it's still a very small part of how the DAO overall spends its time. I tend to be the person who is probably doing the most thinking about some of these questions. And so it has become a substantial portion of my time spent thinking and talking with other people in the community and other DAO leaders. And also just looking at historical examples of how things have worked and not worked in the past.
Sari: Jon one last point on this, and I'm intrigued by this: You mentioned that Cabin is an unincorporated non-profit. I'm curious what that means in the context of a traditional corporation…the mandate is to increase shareholder value and so I'm curious, what is the revenue model for Cabin and do you expect this to generate a lot of wealth? How do you think about that in the context of the structure?
Jon: Yeah. So there's a couple problems with corporations in relation to DAOs: corporate structures have been developed and optimized for a world in which this toolkit we've been talking about didn't exist. So it wasn't built for that. And so as a result, there's several pieces of corporations that just don't quite jive with DAOs. One is what you mentioned, which is sort of necessarily shareholder value seeking behavior. Another piece of it is that. Traditional corporations, particularly C-corps -- which is what most startups are organized as for instance -- actually have really clear lines in the sand between what it means to be a shareholder and an executive or manager of a company. And DAOs are pretty antithetical to that idea…if you wanna be a C-corp, you actually have to say, “these are the people in charge.” There has to be a couple people who are in these executive roles and they have a fiduciary responsibility to do certain things…and it just is a structure that doesn't jive very well with this idea of self-governing and self-sovereign communities. Then you have to look at the landscape of possible structures. Particularly if you're like us, you're doing stuff in the real world, you probably are gonna need a legal structure for various reasons. So what are the options available? You know, this is something that is gonna come out over the next few years in regulatory structures. And we're already starting to see examples of states putting a stake in the ground and saying, “we're gonna make more DAO-like legal structures.” One of the best ones that I think we have available right now is this unincorporated non-profit association because it just leaves optionality open and is sort of inherently a loose structure that provides some of the benefits of corporations, like limited liability, but allows you to kind of set the charter of the organization however you want and change membership in flexible ways, which are things that are actually really hard to do with companies.
So, that's why we're a UNA. You know, I think in terms of the business model here, we're getting into a pretty interesting world where I think business models are just gonna look pretty different in the future. There’s two future business models of governments…subscription and inflation. And you can see ways that both of these things might play out in the context of Cabin. So subscription essentially means: what's the set of tools that we can provide that enable individuals or neighborhoods within the community to access the network and get some of the benefits of identity and reputation and economy that we were talking about earlier. So for instance, I have sitting somewhere here a Cabin passport card which is this physical card that has a chip embedded on it like a credit card, and what that chip has on it is a public private key pair. And the public private key pair is essentially a crypto wallet and what that wallet can then hold is all sorts of assets that represent roles, responsibilities, or like utility or access within a community. You could imagine us building a whole set of subscription tools for startup cities or cloud states or something like that. And then the other one is inflation, by which he really just means tokens. Right? And we've talked about some of the use cases for tokens, from a governance and utility perspective. And the interesting thing here is that this is the first time that anybody can create a currency. That's typically only been in the purview of large sovereign entities. And when anybody can create a currency for anything, local communities can have currencies that represent value within their community. And through some of these staking mechanisms that I've described, they can kind of keep a lot of that value within the community that they've created and manage it in ways that they want to from a fiscal policy perspective, which is a pretty unique and powerful toolkit, both for putting power back in the hands of people and also for creating a business model for these sort of structures.
Joey: I want to ask one question that I wanna make sure we get to. Maybe we're not gonna have enough time to really cover it, but as we talk about different kinds of corporation structures and how they make money and how they operate. Can you make a comparison between DAOs and the existing economy platforms…and here's like the very loose comparison that I have, and just tell me where you think it is wrong: So let's say that at Instacart, where you used to work, there are these open bounties essentially for delivering groceries that you can fulfill, you get paid, and there's this larger structure, which is Instacart, that kind of mediates that whole economy…maybe DAOs are somewhat similar. I mean Cabin has bounties, right? You can do certain things, you can get paid in Cabin. So where are the similarities appropriate? How does this new structure that you're describing get things right? Cause I know that something that's really important to you…is not just fully rebuilding what we built in the past.
Jon: Yeah. So if we take a step back to the early days of the gig economy, there was a whole lot of optimism about what we were gonna be able to create for people. When I would talk to Instacart shoppers and I'd go on shopalongs with them and just spend time driving with them in their cars, what I heard over and over was essentially that there were two things that they really cared about that they were getting from the gig economy, which was flexibility and autonomy. And that basically means they could work whenever they wanted to work. They could sort of be their own boss. They could decide what type of work they wanted to do. And you know, they had like some algorithmic structures that were ultimately tied back to customers making assessments about the quality of their service, but there wasn't a boss that was telling them if they could work or how much they were gonna get paid or things like that. Those, I think, are still really important and valuable things for all types of people. Where things started getting a little bit off the rails with the gig economy was that these marketplaces started commodifying these types of labor, because if you can boil a unit of labor down, it’s literally a commodity, right? This task that is interchangeable with other tasks and that anybody can sort of come and pick up…What that means is that you end up with kind of a “race to the bottom” problem. I think this is most true in the kind of most pure commodified gig work, like driving for rideshare, where it's literally pick up at point A, drop off at point B, and that's the whole thing. Just like time and distance. You know, it’s maybe a little bit less modified for something like Instacart where it's like…okay…well you actually have to like to go to different grocery stores and maybe you're like picking the perfect avocados for someone, or like carrying cases of water up flights upstairs. These are more different kinds of work and a wider range of things. What's interesting about knowledge work and why I got very excited about the creator economy and initially with DAOs as well was this idea that we could start to take some of the benefits of declining transaction costs…the way that that was changing the nature of the firm in the gig economy, but applied it to less modified labor. And it's a much harder problem to solve because now you have these very multidimensional types of work where actually defining what the work is a big part of the problem, which both makes it harder to operate in these sort of purely market structures, but also makes it much less commodified and means that it puts a lot more power back in the hands of the individuals that are participating in these networks.
Sari: Jon, are you implying that for work that is more commodified or fungible, like driving an Uber, that the platform being mediated by a token is less valuable? Or I guess the question I’m getting at is: If Instacart had the Web3 toolkit available, what problems could a token help them solve?
Jon: Great question. So I think what I just described is probably fundamentally true of the underlying market structure of commodified labor. But I also do think that there is maybe an escape hatch here that you've just pointed towards, which is if you actually have a platform like this that is owned and operated by the people who are participating in the network. Right? If, let's say, much like you can come to Cabin and complete bounties and earn Cabin tokens and then vote on how Cabin operates, you could imagine, of course, a gig economy structure where people are earning some sort of token and then able to participate in the network. I think that sort of governance could result in different decisions about how value is managed within the network or how rules are created that are maybe more favorable to the gig workers. So I think that is a valid path, but I think that at the end of the day, it's going to be much harder to build the structures, but much more successfully community owned and operated, to build them within non-modified labor markets.
Joey: Yeah. It almost feels like the more that the labor is non-commodified, the more the coordination problems are really challenging. And so in some ways, all of these other aspects that you're describing feel more important to me…like governance, et cetera. Whereas in the Uber example, I'm actually not sure what you would want. I think having all of the drivers co-own the network and being able to make sure that it's continuous to benefit them. That feels good, but it's also maybe a little bit harder to believe that that company out-competes the existing Uber, which is optimized for the rider experience. We talked to Gaby Goldberg a few podcasts ago and we were describing how it is true that those people end up building the network. So like the early shoppers at Instacart are so important to getting that platform off of the ground. It almost feels like what you're describing with tokens feels like more of an equity…it’s llike, as you build it, you earn tokens. That's where the existing form of equity is kind of clunky. You would be hard pressed to actually issue equity to people. So it almost feels like there's different ways that you can imagine tokens really helping these gig economy platforms, depending on whether the labor is commoditized or not.
Jon: Yeah, that's a great point. And I think it's worth separating out here, the governance and the economic reward aspect. We would've loved to have found structures for equity compensation for shoppers. That's just actually not feasible within current corporate models.
And so that is a really good point that this maybe is something that tokens can unlock and actually be a really big benefit for people. But I agree with some of your concerns…is this actually going to outcompete a more centralized Uber from a governance perspective? That one feels a little bit harder to solve.
Sari: Yeah. And I also wonder about what happens when users are incentivized to use a product beyond the utility. So in the case of Uber, “if I make more money than I could somewhere else, given my circumstances, then I'm gonna drive and otherwise I'm not gonna drive.” But then if you introduce other incentives, then if a new network arises with a temporarily better incentive, do users stay or do they go? And I think moving beyond the theory…what are you exactly incentivizing here? Where I currently stand with a lot of these sort of token challenges…the other one is that customers want predictability, but if there's like a market 24/7 constantly deciding what this thing is worth, and people can sort of flake…there's a reason why companies aren’t public on day one by design. And so I’m curious, do you think that we just haven’t arrived at the right playbooks yet, and it's just gonna take time? These things just tend to get really complicated when you look at them at a much lower level.
Jon: Yeah. So Joey mentioned at the beginning that I do some work with Reforge which is sort of like an education network for mid-career folks in Web2 companies. I think it's worth remembering that companies themselves have had literally centuries to sort of optimize how they work and then even more recent versions of companies, like the traditional web startup, have had decades to create these best practices, and then, through platforms like Reforge, start to disseminate this information and create cultural touch points and mental models around how these things can work. I think that we're pretty hyper-optimized into a local optimum, you know…with traditional company structures. DAOs are just like starting from square zero here. We will figure out what works and what doesn't work as we run these thousands of experiments, which will slowly start to discover new principles that work within the context of this tool set. And I think that will enable us to move our current local optimum to hopefully a new higher optimum.
Joey: Jon, I think we've probably peaked people's interest. There are these cool cabins. We've said they have cows and pigs. I hear they have campfires and saunas. So what are the best ways for people who are saying, “Hey, maybe this is the place for me to dip my toe in.” How should they get involved?
Jon: Yeah, thanks for asking. So, you can check us out on Twitter at CreatorCabins or Creator Cabins.com. And from there you can hop into our Discord server, go through our onboarding process, and get plugged into the community.
Sari: Awesome. Jon, this has been a really great conversation.
Jon: Yeah. Thank you so much for having me. This has been a lot of fun.
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