Index tokens are a very interesting idea with important flaws.
An index token allows you to diversify risk over a basket of assets. But in an industry with so much correlated volatility (most tokens go up and down together based on macro factors) and where so many people are active traders and hence don't value having someone else do the management for them (in the form of an index).
Result: no thanks.
Some DAOs tried a different approach of becoming venture builders. An index for a basket of startups! But, the ventures were more random ideas proposed by part-time contributors than the result of a systematic process and careful portfolio strategy. These DAOs failed to compound expertise in a niche like Web2 Venture Studios do. Higher overhead (coordination costs) without higher upside.
Result: cool idea but no thanks.
RnDAO is different. The guiding principle is not an index, but a mechanism to create compounding network effects between startups. Large corporations have advantages in distribution (product cross-selling), brand recognition, negotiation power, talent and capital networks, etc. Startups have advantages in speed and the ability to try new things. Could we have both?
Each product in RnDAO is a venture focused on the same domain of expertise (CollaborationTech). With each venture, we learn and grow our networks in this vertical. When a venture gets traction, they become a co-owner of RnDAO, hence
- We can try new moonshots without diluting everyone else (until they work)
- Startups are incentivised to collaborate and sell to similar customers, leading to cross-sales, co-marketing, sharing talent and investor networks, market insights, etc.
- Each product is designed to be more modular and composable, leading to better integrations, faster GTM, and ultimately more sales through better customer experience.
Each startup that joins or is born inside RnDAO grows our network effects. Resilience without stagnation. Economies of scale without bureaucracy.
It's innovative, but not unique. Web2 pioneers like Haier (#1 IoT company in the world with 36b in revenue and 4,000 ventures) operate this way. So does Constellation Software (compounding value like crazy with $25m raised in 1995, leading to $84b today).
The future is not index tokens but a swarm tokens.