What I learnt building a software company in volunteering
4 years worth of lessons in a little over 3000 words
TLDR: volunteering is a trillion-dollar industry and DAOs are its future
So, where do we start.. About four years ago, I graduated from Oxford and banded together with three close friends to build a software company in the volunteering space. We set out on a mission to empower everyone to contribute to a better world. We were building a future where you would just need to take your phone out of your pocket to start doing good, wherever you might be. Deedmob was born. Through the power of technology and the internet, we would mobilise people to start doing good deeds.
It's been a wild ride. Some things worked extremely well, other things less so. After four years working with the most amazing people I know, Deedmob is a profitable Software-as-a-Service (SaaS) company that has helped almost 100,000 people volunteer. I wouldn't be surprised if we hit a million in the coming years. By most accounts, Deedmob is a successful company. 90% of startups fail.
Yet, our big master plan didn't work out exactly as we thought it would. We were going to empower everyone to contribute to a better world. That meant we were aiming for a billion volunteers - a million would be 1000x off from that goal. On this account, we didn't succeed. It just happened that we created a profitable company with the best-in-class volunteering product in the process (according to the Bill & Melinda Gates Foundation that is). However, for me the exact outcome isn't the most important thing. It's what I learnt.
I'm writing this so that I don't forget and to give some guidance about how I think the outcome of empowering everyone to contribute to a better world could actually be achieved in the future. After all, I've spent four years on this problem. The short story is that volunteering is a gigantic industry. It's absolutely crucial for the health of our society that volunteering survives and flourishes as we enter the digital age. Yet, the main problem is that the reward mechanisms for volunteering broke as an increasing part of our lives moved online. Better reward mechanisms for volunteering are emerging in open source software development and crypto, but there's still some way to go.
The first team picture in our Amsterdam office. Left to right: Splinter (legendary early team member), David (CTO), Boudewijn (CEO), Novelle (🐶), moi, Arthur (legendary early team member), Hendrik-Jan (Chief communications).
The first thing I learnt is that volunteering is a gigantic and critical industry
The first thing I learnt is that volunteering is a gigantic and critical industry. We got the idea to do something in the volunteering space while living in England in 2016. It was a year of two big politicising events: Brexit and the election of Donald Trump. We saw a lot of people arguing about politics all of a sudden. However, there still seemed to be little attention for the underlying problems that caused these shocks. Large parts of society were left behind. It was quite clear that volunteering could help here. If all this energy that our friends were spending arguing about politics could be turned into real action in local communities, the underlying problems might actually get addressed. At the time, most people we knew believed that the only impactful volunteering would be building a well in Africa or something like that - local volunteering seemed like a strange thing to do.
I came to realise that a flourishing non-profit sector is critical for Western societies. When Tocqueville traveled to the US in the 19th century, he saw a rich associational life of clubs coming together for purposes outside of work or government. For him, this kind of activity was the basis of American democracy. In authoritarian societies, volunteering and association at scale are difficult. If you live in China you're not allowed to start a food bank in Tibet. The state is keeping Tibetans poor for a reason. Philanthropy and volunteering directly compete with the one-party state. The freedom to associate and help the people you want to help is a very important right. In many ways, volunteering is the manifestation of our freedom. We can throw our most important resource (time) at whichever cause we care about. However, participation in volunteering is declining significantly in the 21st century - especially among young people.
A decline in volunteering activity wouldn't be very significant if the numbers would be small to begin with. But they are not. Volunteering is HUGE. The closest thing we found of an estimate of the value of volunteering comes from the former Chief Economist of the Bank of England, Andrew Haldane. He estimates that the value of volunteering in the UK alone is £100-150 billion annually. That easily puts the global value of volunteering over $1 trillion. Haldane gets to this number by combining the economic replacement value of all volunteers, with the value of enhanced well-being, health benefits for the volunteers, increased employability, and, most importantly, the social capital created for society as a whole. In short, volunteering is an irreplaceable industry. Or as the King of the Netherlands put it, 'without volunteers, our country would simply collapse.'
When digging into possible solutions for this decline in volunteering activity, we quickly realised that local non-profits were very bad at engaging people online. It was hard to understand which problems they were addressing and how volunteers could contribute. The online tools they were using were built for companies. Helping a non-profit as a volunteer felt like applying for a job. There was a clear need for a recruitment platform purpose-built for volunteering. With a focus on community-building, it could be much more engaging for people to participate. After some trial and error, it worked! Non-profits and volunteers were flocking to our platform (deedmob.com) and they kept coming back. This was great but we had a problem: we weren't making any money. We solved this by creating a paid SaaS product that allowed organisations to build their own volunteering platforms like deedmob.com (Deedmob tools). They wouldn't have to write a single line of code. Our product became the new standard in the volunteering space and we acquired customers like the Red Cross, Red Bull and many (local) governments. Yet however hard we tried, we didn't get close to cracking the hidden trillion-dollar volunteering nut. Why do I think that is if volunteering is really so valuable?
The reward mechanisms for volunteering broke as an increasing part of our lives moved online
The reward mechanisms for volunteering broke as an increasing part of our lives moved online. When building Deedmob as a company, we had to think quite deeply about which type of customer we were going to market to. Who gets the value of volunteering? And who really owns the liabilities if volunteering would cease to exist?
In the past, individuals got more value from volunteering than today. Without helpful fellow citizens, the risks of falling through the cracks of society were much larger. On the other hand, social rewards for volunteering were also much more significant. Engaging yourself in your local community was one of the best ways to make connections and build a lasting reputation. In the tight-knit local communities of the past, the returns on social capital were simply much larger. Volunteering would allow you to increase your social status, get a better job, find a better spouse, find better spouses for your children, get looked after when you're old, etc.
In the last few decades, social rewards for volunteering have diminished quickly. Individuals get much less value from volunteering. Because of the internet, most of the people I know no longer operate in geographically bound communities. Engaging in your local community is no longer the best way to make connections and build a lasting reputation. We largely reap social rewards on social media or through our work.
The broken reward mechanisms of volunteering were also expressed in the attitudes of the non-profit executives we spoke with. Large non-profits didn't have much interest in volunteering. Through our conversations, we learned that their main objectives were reducing the administrative burden of managing existing volunteers. There was little interest in investing seriously in engaging new volunteers. All attention of non-profit executives was with their fundraising departments. Recruiting large amounts of new volunteers wasn't interesting enough.
If individuals and non-profits own less of the liabilities of a decline in volunteering, it follows that governments are shouldering a larger burden. We discovered this first hand. In the welfare state, volunteering has become a public good. If individuals would stop volunteering, the government would need to step in to plug the gap. We found that the most significant investments in increasing volunteer participation are government initiatives. Local government, national government, and agencies like the National Health Service in the UK were most willing to invest in new solutions to boost volunteering. Naturally, we focussed on government contracting when building Deedmob. This worked. We started selling to local governments in the Netherlands and then went to the UK and beyond. The COVID-19 pandemic was great for our business, as government agencies from Colombia to New Zealand were reaching out to use our software to facilitate volunteering for quarantined citizens. At the time of writing, Deedmob is launching pilot projects with oil-rich states that have set ambitious goals to build a national volunteering culture from scratch. Governments care most about volunteering because our welfare states will carry the burden if we stop doing it.
Unfortunately, government procurement is one of the slowest things ever. Growing a company rapidly and working with governments is very difficult. This made it impossible to achieve our mission of empowering everyone to contribute to a better world. You can only build a highly innovative company if you can acquire market share fast. A fast growth tempo unlocks the capital through which you can attract the smartest people in the world to work on your mission. There are examples of companies that grew slowly for a long time that still managed to innovate quickly - for example Palantir and SpaceX. Yet these companies were founded by people who already had the capital necessary. The best way to become a millionaire government contractor is still to start off as a billionaire. Because the reward mechanisms for volunteering aren't there for individuals and non-profits, we had to work with governments. It follows that our mission can only be achieved when there is a path for the reward mechanisms for volunteering to improve - especially for individuals.
Better reward mechanisms for volunteering are emerging in open source software development and crypto
Better reward mechanisms for volunteering are emerging in open source software development and crypto. When we look at what's happening in these spaces, we can make out a possible future where reward mechanisms for volunteering are brought back in full force through the power of the internet.
Arguably the largest volunteering contribution of the past decades has been made by open-source software developers. These developers wrote so much freely accessible code for anyone to use that the cost of building a software company has come down by orders of magnitude. Often, open-source developers are unpaid volunteers. Software developers have great reward mechanisms for voluntarily contributing to open source. By posting their code online, anyone can see their work. When hiring developers most companies don't look at CVs, but rather at a developer's open-source contributions. Open source is also a great way for developers to make friends with people interested in the same technologies. Just like industrial age volunteering, volunteering by developing open-source software creates a lot of social capital. It brings jobs, money, and connections. This social capital is not geographically bound. It lives on the internet. These are the reward mechanisms we need to empower billions to contribute to a better world.
Internet-based social capital works well with code, but less well with other types of volunteering. It's much easier for a community of people to review whether someone has written good code online than to whether someone has completed a volunteering task. Fraud is much too likely. Imagine volunteering by helping an elderly person do something on their computer through Zoom. Submitting this action for verification by an online community could involve sharing a calendar invite or a review from the person you helped. Yet in both cases, it's easy to game the system. People would get social capital they don't deserve. Of course, a mechanism to verify volunteering doesn't need to be as fraud-proof as writing code. In the past, there were many people who pretended to have done much more for their community than they had actually done. Yet these people always had to be careful. If someone called them out, their reputation would suffer greatly. To bring the reward mechanisms pioneered by open-source to real-world volunteering, we need extremely good incentives for reviewers. We also need great incentives for volunteers to report truthfully about their actions.
Crypto brings us the incentives to make volunteering work like writing open-source code. Bitcoin practically introduced digital property. This invention opened up the possibility for digital items to have value, including participation in a community. These communities are DAOs - Decentralised Autonomous Organisations. A volunteering DAO would give participants the incentives necessary to make the system of verification work. By giving participants a stake (tokens) in an online volunteering community, the community gets rewarded for the real-world action of its members. Truthful reporting and reviewing make everyone's stake in the organisation go up in value. Tolerating bad actors will send everyone's stake to zero - just like tolerating fake claims about community work in the past would have disincentivised people to volunteer, harming the health of the community in the process. DAOs could make the trillion-dollar value of volunteering finally visible. As a result, these funds would be deployable for the preservation and growth of volunteering. With this verification in place, volunteering would work the same way as writing open-source code. We would be able to get online verifiable social capital by doing volunteering work and with that the rewards mechanisms for volunteering are back!
This might sound very wild and futuristic, but DAOs are already working for certain kinds of volunteering. Gitcoin DAO is a great example. Gitcoin is a platform that helps open source developers get paid by introducing a novel funding mechanism to open source development for the Ethereum blockchain (quadratic funding). Quadratic funding required significant volunteer effort to build up. To ensure that these volunteers are well incentivised, Gitcoin launched Gitcoin DAO with its own token - GTC. GTC is used to vote on the direction of the DAO. GTC is allocated for optimal incentives:
Gitcoin gave all previous participants in the community a GTC stake in the DAO.
Gitcoin allocated 50% of GTC supply to the Treasury of the DAO.
All volunteers vote using their GTC on projects to spend the DAO Treasury’s GTC on.
Volunteers building the voted projects get rewarded in GTC (which they can then use to vote on future projects for the benefit of the DAO, restarting the process)
In essence, the Gitcoin DAO Treasury functions like a sovereign wealth fund that’s used to build essential infrastructure - in Gitcoin’s case a well-functioning funding mechanism through quadratic funding. It would be somewhat unfair to call Gitcoin developers volunteers. They are very well compensated by now. Yet, what matters is that they started off as volunteers. Gitcoin DAO is a model for how volunteering can be valued, rewarded, and properly incentivised. Fraud is certainly a problem in a decentralised organisation like Gitcoin, but every participant is perfectly incentivised to come up with ideas to combat fraud, not the least because they financially benefit from solving the problem. The less fraud, the higher GTC will go in value. In short, GTC captures the value that the volunteers produced and can be deployed to create more value.
The most important takeaway from Gitcoin DAO is that it incentivises all participants to combat fraud. Innovation happens when extremely smart people are extremely well incentivised. When the same incentive mechanisms are used in the context of a volunteering DAO, the participants will be incentivised to make verification of volunteering work and bring online verifiable social capital to the world. If and how this will happen remains to be seen. A lot of trial and error will be needed. There are currently just a handful of people in the world who think seriously about volunteering. DAOs have a shot at creating better incentive structures to bring more people to the field - just like the number of experts in quadratic funding increased through the incentives mechanism used by Gitcoin DAO. DAOs make the (until now) invisible social capital visible and deployable. As long as volunteering DAOs work, their tokens will have value - and, as we have seen, their potential value reaches into the trillions. This cryptographic social capital will not be bound to your local community. Tokens you earned through a local volunteering DAO in London are also visible to people in New York or anyone on the internet. Your volunteering effort is now forever associated with you.
A possible objection to the idea of tokenising volunteering could be that this turns volunteering into work. This is a somewhat misguided claim. While you would indeed receive tokens for volunteering, the reason that these tokens are introduced doesn't have to do with their financial value. The financial value of the tokens is simply a way to align everyone around combating fraud and making the entire organisation work. This mechanism isn't very different from the way through which social capital was earned in the past through volunteering. The only difference is that social capital wasn't recorded. Helping out in an orphanage in the 18th century might not have earned you any hard currency, but your local community saw it and rewarded you indirectly with a reputation. This reputation was valuable and set you apart from people who hadn't contributed to the community in the same way. At some point in the future, you would likely benefit from this reputation by getting social connections that you wouldn't have otherwise had. The reward mechanisms DAOs could introduce to volunteering aren't so different from anything we already did in the past.
Volunteering is critical and its reward mechanisms are broken in the digital age. Crypto is the most promising thing I've come across that could repair these mechanisms long term. The question I naturally ask myself is: how could we get to this future faster? I think it's still too early for DAO product focussed on volunteering to succeed. I first came across DAOs in 2017 and wrote a bit about tokenising social impact in 2018. The space has developed quickly over the past years but the number of people that participate in DAOs and crypto more generally is still low. I think this is where a big impact can be made.
The future is already here, but it's not evenly distributed. Fortunately, the same goes for the past. Vibrant local volunteering communities are still here, though not evenly distributed. I've had the pleasure of working with many of these communities in the past years. They will continue to exist for many years and won’t disappear overnight. Governments around the world will scale up their essential work to support these communities as we move into the digital age. The smartest governments will of course use Deedmob tools for this. When crypto has developed further, there will hopefully be an opportunity for these communities to bring in crypto-enabled incentives mechanisms. They will carry their work and ethos into the digital age - and in doing so, will ultimately help preserve Western values. Yet, the internet of value doesn’t deliver itself. There’s nothing automatic about technological progress. From here on, I will try to bring the decentralised crypto future close. I think that's the most impactful thing I can do.
*All views are strong but weakly held. Feel free to comment on parts you don’t understand or disagree with here, I look forward to reading your thoughts :)
PS: I’ll be writing a lot more about Bitcoin and crypto from here on. Subscribe to join me on this journey (will make future posts much shorter)