How DAOs can Revolutionize Startups

Communication and interaction between humans and organizations, government bodies and agencies, companies, and banks are on the rise. Unfortunately, such centralized institutions are subject to corruption and other malpractices. Therefore, what if members could run the organizations on their own without the interference of other parties? If you have instantly thought of DAOs and the paradigm shift they are bringing in startups, don’t worry. Please keep reading to find out more about these organizations and how they can revolutionize startups.

What Are DAOs?

Decentralized Autonomous Organizations, DAOs, are complex smart contract structures that are run by members. There is no leader, bank, or other third party involved in their operation. Therefore, there is more transparency, and each person can take part in the decision-making process. How does someone or a business become part of a DAO? This is possible by buying tokens.

The main aim of these autonomous organizations is to go beyond reducing human inputs in business operations. Their goal is to entirely do away with them completely. Thus, all its processes, both essential and non-essential must embrace automation.

Notably, more startups are taking up the challenge and the number of those considering launching their DAOs keeps soaring higher. However, what does the future hold for DAOs and startups? is there some revolution in store? Let us find out.

Could DAOs Revolutionize Startups?

With more startups continually launching their DAOs, finally, there will be some changes. Some of the ways through which these organizations can revolutionize startups include;

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  • User Decision-Making Power

When a startup becomes a member of a DAO, it gets the power to have a say in whatever decision takes place within the organization. This is the case because a DAO does not rely on any third-party organizations, bodies, or leaders to make the decisions on behalf of the members. Each member has the power to participate in the decision-making process.

Therefore, with DAOs, there is no monopoly in decision-making or dictating any judgments that are tied to the organization.

How DAOs can Revolutionize Startups
How DAOs can Revolutionize Startups
  • Increasing Democracy

Unlike traditional companies, DAOs are not under any organization, body, or leader in charge of decision-making. On the contrary, the members have the responsibility to make decisions affecting the group. Importantly, buying tokens to become a member of a DAO gives you the power and you can realize the true meaning of democracy. At the end of the day, each member wins and the instances of corruption are reduced. Therefore, no one caters to their own interests. Rather, the interests of everyone are taken into consideration. This is ultimately possible because whatever is happening on the blockchain is available for all to see.

  • Enhancing Transparency

Every activity taking place in the DAO blockchain is available for each member to see. This, therefore, makes it difficult to perform any malpractice or act of corruption. Also, if you want to access the funds from the blockchain, the group must first approve. Therefore, with their built-in treasuries, DAOs make it possible for startups to have their money safely keeps as no one can dupe the investors or run away with the money.

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  • Increasing Automation

DAOs take advantage of smart contracts to automate the operations of a business. What does this mean? A startup doesn’t have to employ individuals to take up certain processes when automation is possible. The good thing is, with DAO, a startup can have its processes well handled, from inventory entry to product shipping. Remember, when keeping inventories with DAOs, the startup can end up saving. How?

If a startup deals in bookselling, and there are orders to be placed, rather than having some personnel to take care of it, the smart contract will ensure it finalizes the order, creates the invoice, and also begins the shipping process. Therefore, the startup does not only save on labour costs but will also save on the time taken when shipping the product. Therefore, a business can efficiently run with DAOs.

Interestingly, when a shipment arrives, the smart contract in these DAOs will get a notification, which is done through a scanner connected to the ledger. Next, there is the release of the payment in crypto. So, a startup does not have to employ people to take care of all the processes from invoicing, shipment, pulling customer information, and printing labels to accelerating shipment; the smart contracts will automate them.

How DAOs can Revolutionize Startups
How DAOs can Revolutionize Startups
  • Reaching a Larger Audience

Most startups would like to scale their business and serve a global market. Unfortunately, this is never easy as the cost is high. Also, there are chances of failure too. The good news, however, is that DAOs make it easier. How? They make raising funds from different people globally possible and also create teams all over its blockchain to ensure a startup expands. Therefore, a startup that adopts the DAO model in its operations

The Problem

At this point, it is evident how beneficial adopting a DAO model in a startup is beneficial. They help startups offer quality, be efficient, save on costs and time, and automate their processes. Unfortunately, there are certain obstacles, making it hard for some new companies to completely adopt the model.

For one, automation is not very easy when a startup deals with physical products. this implies that such a startup will still have to spend money on human labor. Remember, not all startups can access robots, hence, it will take some time for all startups employing DAOs to entirely automate all their processes.

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Additionally, the system in DAOs is a self-governing one. The issue is, that there is a lot of complexity that comes with a self-governing system. Hence, for a fair operation, there is a lot to consider.

Nonetheless, since everyone is involved in the decision-making process, a lot of time can be spent before arriving at a conclusion. This means that an otherwise crucial decision regarding the startup can delay.


DAOs are more decentralized organizations that take into consideration each member in decision-making. They do not rely on a leader or a trusted third-party organization to carry on with the decision-making process. Also, they make it possible for startups to automate their processes, save on time and cost and run efficiently. However, this is not to say that this paradigm shift doesn’t have its share of challenges.

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