This post will explain the recent birth of the “DAO” concept, and why adapting it 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.
The phrase “Decentralized Autonomous Organization” was first coined (no pun intended) by Ethereum, a decentralized open-source blockchain that features its own cryptocurrency, Ether. ETH works as a platform for numerous other cryptocurrencies, as well as for the execution of decentralized smart contracts. Although originally created as an innovative approach to venture capital, the model soon proliferated into unforeseen and extremely creative applications, corresponding to the rise of NFTs (Non Fungible Tokens). So many techno terms, so much confusion! Translation: strategic application of technology-enabled Radical Transparency can: 1- establish trust in a way that no human system can; 2- enable value creation to be de-coupled from the traditional hierarchical organizational structure; 3- redirect that value from the very top of the hierarchy to those that actually created the value- the DAO members (workers) .
Is the common reaction. This is an entirely new form of human collaboration, enabled by technology. It is very confusing and counter-intuitive, even for us.
LifeSciHub as a DAO
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 a single or small group of executives, or worse, outside of our organization, to investors? What do investors do other than supplying cash, at an enormous, expensive premium? 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. Of course there is a fee for this- see “Fees” below to see exactly how that works. Also see “Radical Transparency”.
Core Elements of the To-Be LshDAO:
This is a work in progress however here are the core elements:
Fees: All members set their own billable rates according to their small business competitive market research, 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.
Radical 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.
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.
Legal Structure: In the US, Wyoming is the first state to officially recognize the DAO as a legitimate corporate structure. It is LifeSciHub’s intention to gather budget to begin the process of converting our Delaware-based LLC structure to the Wyoming DAO structure, or pursue other legal, DAO-friendly structures. LifeSciHub’s informal mentor is Braintrust, a far more mature decentralized talent network (not related to life sciences R&D). The legal, accounting and financial implications of this are daunting in the extreme, since this is cutting edge innovation. Which is why LifeSciHub emphasizes Radical Transparency. If you are a user, either an Expert small business Provider or a drug sponsor Hiring Entity, whatever fees are paid into LifeSciHub contribute directly towards the effort to create non-hierarchical value creation.
We encourage you to do your own research. Please reach out if motivated to explore.