This post will explain the recent birth of the “DAO” concept, and why adapting the concept to the LifeSciHub business model might be not only possible, but amazing- a new way for a group of human beings to collaborate together, create value, and distribute that value. Not up and out to the 1%- execs and investors- but distributed to all contributors, in direct proportion to what each contributed, reported transparently and auditable by all members.
LifeSciHub is exploring operating as a DAO, because we’re not sure a top heavy, expensive management structure is necessary for a community such as ours. After all, as independently incorporated expert small businesses in life sciences R&D, we are all business owners ourselves. Although we may not have understood Profit & Loss statements very well when we were still employees, most of us do now. We have our own lawyers and accountants. We manage our own time, do our own business development.
In other words, there is nothing a “CEO” or other “upper management” exec can do that we aren’t already doing for our own small businesses. So if we already know everything there is to know about business operations, why would we come together, collaborate, and create value that is going to end up going into the pocket of some suit or worse, outside of our organization, to investors? What do investors do other than supplying case? Investors don’t create value. Workers create value.
The LifeSciHub Community doesn’t need third parties to find work, we all have our own clients, our own networks. What we could use, however, is more strategic business administration, such as a Master Services Agreement with a mid-large sized drugs sponsor that are inadvertently structured against engaging small businesses. In the LifeSciHub model, a single MSA with a drugs sponsor gives access to all LifeSciHub community members, all of whom already have Expert Provider Agreements in place with LifeSciHub. This is a new way of looking at contracts.
LifeSciHub as a DAO:
This is a work in progress however here are the core elements:
Transparency: LifeSciHub is based on radical transparency. Not only are all rates transparently reported to all parties, but LifeSciHub’s P&L is as well. In fact, y2021’s books will be reviewed with all members on Friday April 15, 2022. Only with total transparency can trust be established. Only on a foundation of trust can a DAO exist.
Thin Management Structure: There are no full time employees of LifeSciHub, and in fact all “management” work could be distributed across member volunteers (increases contribution). What we as a community need is insurance, legal (agreements), invoicing, payment processing, and reporting. None of this is rocket science. There is no reason to collaborate as a hierarchy, in which the top 1% take the majority of value created.
Business Administration: LifeSciHub’s goal is to establish a single Master Services Agreement (MSA) with each drug sponsor, which would give access to the entirety of community members, each of which already have Expert Provider Agreements in place. This is efficient on many levels not the least of which will prevent critical drug development projects from being delayed due to legal teams negotiating mutual indemnification and so forth.
Fees: All members set their own rates, LifeSciHub simply adds a 30% mark up, which is reported transparently to all parties. Whatever “fee” LifeSciHub takes in goes towards the community insurance and legal assistance, software development, and the above mentioned thin management layer. One day, when fees pay for LifeSciHub’s full “monthly nut”, that means there will be profit to share! We estimate that LifeSciHub needs approximately 50-60 projects a year for that to happen. To date LifeSciHub averages 10-20.
Connector: Any time a member “Connects” demand or supply in the context of a live project, LifeSciHub shares 15-25% of the fees with that Connector. If a member is responsible for helping LifeSciHub obtain an MSA with a drug sponsor, that Connector will receive 5% of all project revenue from that MSA, since that member created great value for the entire community via the MSA.
Software Development: the LifeSciHub platform is under constant development, adding few features to support the growth of the community. In 2021, among other things, we created a Time Tracker for our members, which has been a great tool for the membership. Software development is conducted and prioritize in alignment with LifeSciHub fees. With growth, LifeSciHub will be able to dedicate more to software development, which, in turn, will benefit all members.
Mini-Marketplace: LifeSciHub members have all had to do things like find good accountants, find someone to build a website, post to social media, and other small business supports. Sometimes this is a painful experience, such as when a service provider doesn’t work out the way we had hoped. LifeSciHub’s goal is to pool recommendations across the community, so that everyone can benefit from good providers.