What I learnt building a software company in volunteering
4 years worth of lessons
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.
Crypto essentially monetises open-source software work. Crypto introduced the possibility for verifiable digital ownership, which allows for community contributions to have value. If you ship some meaningful code, you get a stake in the project. Crypto is the missing piece to the puzzle to create online identity which can be tied to real world volunteering actions in the future. As a result, Crypto is the most promising thing I've come across that could repair the reward mechanisms for volunteering in the long term.
The question then becomes: how could we get to this future faster? I think it's still way 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 crypto future close. I think that's the most impactful thing I can do.
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)