3 Immediate Strategic Needs for the Coop

Growth Business Development
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In this post, I am suggesting 3 immediate strategic priorities for the Index Coop:

  1. Establish North Star Goals
  2. Establish Core KPIs
  3. Empower High-Impact Contributors

The goal of this writing is to crystallize challenges felt among community members today and establish a strategic direction to guide the Coop.

If successful, we will remain on the path to becoming the dominant provider of crypto indices and other structured products.

Where are we today?

In October 2020 the Index Coop launched with the DeFi Pulse Index (DPI) as its flagship product.

From October 2020 - November 2020 frameworks for north star goals, core key performance indicators (KPIs), and empowering high-impact contributors were put forward, met with rough community agreement, and put into varying degrees of practice.

The Coop was much smaller at that time and this rough agreement worked!

Since then, the Coop has grown & evolved. We have not yet made similar frameworks practicable at our current scale.

Before suggesting where we go, it is important to understand where we are coming from.

Let’s now take those 3 guideposts - north star goals, core KPIs, empowering high-impact contributors - one at a time.

North Star Goals

North Star metrics are supposed to be the one measurement that’s most predictive of a company’s long-term success. It is an exercise in simplifying the overall strategy into terms all can remember, understand, and apply. (Mixpanel)

A few north star goals have been shared, rallied around, but never put into practice.

The stated goal in October 2020 time was for the DPI to reach $50MM TVL within 6 months. At some point, another number, $100MM TVL, was shared. DPI breached the $100MM mark in just 5 months after the launch of the Index Coop in early February 2021.

Shortly after the $50MM goal was shared, @overanalyser shared “The Road to 1%-” and articulated the goal: “Get a single product (DPI) to 1% of the DeFi Market.” This too was rallied around. Though we never articulated a time frame, set up tooling to track the metric, or put it front & center of any of our meetings or decisions.

Core Key Performance Indicators (KPIs)

KPIs are used to answer, “How are we doing against our north star?”

Similar to the north star goal, several KPIs have been shared and rallied around to different degrees. These include:

Roles, Contributions, and Rewards

  1. Market Cap
  2. Number of holders
  3. Trading volume across exchanges
  4. General awareness

October Rewards Distribution & Methodology

  1. AUV
  2. Holders

Governance Call Deck 003

  1. Growth: TVL, # holders, distribution channels, # Indices, # impressions
  2. Sustainability: # $INDEX holders, $INDEX price, protocol revenue, governance power
  3. Autonomy: Reward system, Onboarding process, culture/values

Weekly Planning Meetings

  1. DPI Holders
  2. Unincentivized TVL
  3. @ indexcoop twitter impressions
  4. DPI total supply
  5. W-o-w Total Supply Growth %
  6. Uniswap volume (no-arb)

Again, we have not yet solidified our focus, or put them front & center of all of our meetings, conversations, and decisions.

Empowering High-Impact Contributors

Finally, let’s move down from Core KPIs to individual contributions. A similar story applies here.

We have agreed on what types of activities by community members deserve remuneration:

Roles, Contributions, and Rewards

  1. “Members should be rewarded for their contributions to the coop if the community believes the contributions are valuable…”

October Rewards Distribution & Methodology

  1. “Meaningful contributions encompass contributions that help the Index coop grow the overall AUV (assets in vault) and holders…”
  2. A number of examples of high-impact activities are laid out in that post

We have not, though, put this into meaningful practice. Further, these structures were created at a time when the Coop was smaller. We have evolved significantly since their creation.

Summary of “Where we are today?”

We have already circled some North Star objectives, Core KPIs, and a contributor-compensation framework.

What we failed to do, though, was solidify and explicitly use them to guide value-add processes & make high-quality decisions that aim to better the Coop as a whole.

What is the complication?

So what’s the big deal?

The lack of clear direction has made it challenging for any one community member to be able to answer several important questions, including:

  1. How do we run the Coop?
  2. Who makes what decisions?
  3. How are they held accountable?
  4. What should I work on?
  5. How will my work be used?
  6. Will my work make an impact?
  7. Will I be compensated for my work? How?

This is leading to confusion and frustration in our community today.

The burning question is then, “How do we solve this problem?”

Proposed Answer

Note: I use the word “finalize” to signify, “Agree to for now, so we can start learning now and iterate as-needed in the future”

Here is a sensible plan to start addressing these areas of confusion. These are the immediate actions I plan to take over the coming days:

  1. Establish North Star Goal(s): Finalize this objective. Track it. Put it front & center.
  2. Establish Core KPIs: Finalize & measure them so we know our progress against the North Star.
  3. Create clear work structures: To enable high-Impact contributions. Make clear what work should happen, what work should be compensated, and the different paths to compensation.
  4. Evangelize: Make North Star/KPIs/work structures usable and accessible. a) Make decisions: Ask each other, “What goal does [proposed initiative] drive towards? How? Is that the best way?” b)Add to: Forum, Gitbook, Discord, Medium c) Use in: Meetings, conversations

Considerations

Intellectual honesty: So far in the Index Coop, we have not routinely made clear decisions around what deserves working on and why. Are we ready for intellectual honesty? Are we ready to respectfully say “no” to ideas that don’t contribute to our goals? Are we, as individuals, open to hearing that “no? I hope our culture allows this level of rigor and openness.

Maintain status quo: It is an option to not set a North Star, Core KPIs, or clear compensation structures. This would be the wrong course of action for at least 4 reasons:

  1. Confusion will continue. We enter the failure modes described here.
  2. Perverse incentives take hold. Members contribute work that is not directed at clear outcomes or goals with expectation of remuneration.
  3. We will harm our brand. We will produce work that is not unified or directed.
  4. We won’t know what activities truly drive growth of Index Coop products.

Speed: To implement these changes will take some time since it will be done in public and thus requires writing & discussion. These problems will linger on for a little bit. This is okay, the path is clear, and we will get there.

Measurement and tracking: We need to be able to measure whatever goals & KPIs we set. This requires the appropriate tooling & tracking. I am comfortable taking on most overhead I can myself, though I will need help from others.

Allowing space for creativity: Allowing space for creativity and experimentation is an important ingredient to long-term success. I don’t expect creativity to be stifled by these suggestions. However, if that does occur, we can set up targeted solutions to that problem (i.e. Google 20% time, Lockheed Martin Skunk Works). Let’s solve that problem if & when we get there.

Next Steps

With these considerations in mind, it is time we move forward on north star goals, key performance indicators (KPIs), and empowering high-impact contributors.

We are on the cusp of becoming a major force in crypto: the DPI is a massive success, the CGI just launched, the FLI was just voted-in and more products are coming down the pipeline.

We need to move as one. We need to focus on what is impactful. We need alignment on these overarching goals so we can sprint forward together. Let’s go!

Request for Feedback

What is missing from this high-level plan?

What else is making it hard for you to contribute high-impact work with the Coop?

Next Steps

I will begin executing the plan above in public channels.

That means you can expect to see posts from me in public channels pushing each of these forward: 1) North Star Metrics 2) KPIs 3) Enabling high-impact contributors.

Addendum - Prior Work

  1. Introducing the Index Cooperative - Felix Feng (October 6, 2020)

  2. What is a North Star metric? - Mixpanel blog

  3. The road to 1% - - OverAnalyser (October 2020)

  4. Roles, Contributions, and Rewards - Inje (October 2020)

  5. October Rewards Distribution & Methodology - Dylan (November 2020)

  6. Governance Call Deck 003 - Felix Feng (November 10, 2020)

  7. Launching a Growth Working Group - Regan Bozman & LemonadeAlpha (December 2020)

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I like it Greg, we do need to have a common goal and agree how we can achieve it.

I would also add this post and discussion to the mix:

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Thanks Greg for laying out your thoughts and the plan going forward. It will be really useful to have the metrics and KPIs clearly stated for the community to align on.

Is the plan for you to get something 80% of the way there and put it to the community, or will you be engaging with people from the start? As the post laid out there have already been attempts at measuring success but it’s now a case of gathering them together into something more widely applicable.

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As a community, I think we’ve already gotten 80-95% of the way there given the prior posts and ongoing conversation.

Additionally, I’ve been engaging folks directly (discord & community calls) for the past ~2 weeks to get yet another gut-check. My main takeaway: We are quite aligned on what matters (:tada: )

My next step is to gather that rough consensus in a single post very soon (~24 hours) to continue moving forward rapidly.

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Thanks @anon10525910, a couple of things from me:

  • What is going to be the process for finalising these? Is there going to vote? Sentiment check? Any other mechanism to judge alignment and support?
  • As discussed on the org call, not sure if this is the right place for this, but thought decentralisation should be discussed and fleshed out, perhaps in the KPIs or as a separate goal or need.
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Maybe there’s a good explainer here but I’m wondering if anyone’s fleshed out why the pressing need to distribute our treasury tokens?

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I think the main one is to prevent Set / DFP / Methodologists controlling more the 50% of the circulating tokens and so meaning that we are centralised and they are at legal risk for what we do.

I think there is 37.5% of the INDEX supply allocated to the three entities over 3 years, so the distribution of a further 37.5% is implied.

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Yeah, second OA, this also goes back to Matt’s slide on the current centralisation of voting aka governance capture and Dylan’s post a while back on the same subject.

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Ah, but I guess haven’t we decided that Set cannot vote in the current iteration?

Just so I understand: We’d want to maintain >50% circulating supply outside of those 3 stakeholder groups in order to prevent governance capture. Thus, we need to distribute at least 37.5% of tokens over 3 years.

Would quadratic voting minimize the necessity for this in the med-long terml? Would it make sense to explore that before pursuing this goal of governance power distribution?

One last thought, does this mean we should weigh the tradeoff of making purchases of INDEX with DPI more heavily in terms of the smart treasury?

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Yes, quadratic voting was brought up by @dylan in the analysis of IIP-7 close to 2 months ago now. For that particular proposal “whales accounted for ~80% of INDEX voting power, but comprised ~11% of voting addresses.” My understanding is we got significant pushback on quadratic voting.

We then proposed governance mining coupled with delegation. I think both are good options to pursue.

Good point and certainly worth a discussion. Smart Treasury is going to run as a 3-month experiment to start with. Overall, I think the numbers here are not significant enough to make much of a difference. I mean, 3 wallets made up 58% of the latest FLI vote for example (about 187k INDEX). I think Smart Treasury would be buying ~1.5k INDEX per month (@DarkForestCapital)? However, if we were to scale the Smart Treasury up, without addressing the governance concerns, that would be more of an issue.

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Absolutely need this Greg, thanks for taking this on.

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Good question! Based on the iterative nature of what I’m pushing on, I think rough consensus is sufficient and sentiment check if needed :+1:

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Request for Feedback

What is missing from this high-level plan?

Leadership structure and framework. Leadership is a full-time commitment so it is vital that the leaders elected have sufficient time to dedicate to the indexcoop.

What else is making it hard for you to contribute high-impact work with the Coop?

Not understanding the the process to execute proposals effectively. However I am learning how to get proposals communicated through the community more effectively as well as how to execute them.

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This is a great thread, lots to read and think over.

I am a big fan of putting structure around our plan for future success. I like the idea of KPIs and cascading those KPIs down to individual working groups. A structure where leaders focus on big picture strategy, directional, market positioning and any other major item that will drive long term value creation for holders. The working groups then proceed to strive towards reaching the KPI, including stretched targets, with guidance. The faster and more efficient we are, the more value we unlock for INDEX holders.

We can even look to incentives performance, again this should be a process driven approach removing narrative or subjectiveness. When setting KPIs the SMART methodology is really high impact and quantitative. Simple, Measurable, Achievable, Relevant and Time-bound (SMART). Crypto is an ultra competitive landscape and we will always need to push to excel and perform. Creating the culture and community is key to long term success. There will be many things that feed into this and time is of the essence.

I think we need a few things worked on:

Smart Treasury - how to unlock value of passive holdings ?
Token Inflation Planning - how are we going to maximise ROI ?
Governance concentration/influence - what do we want to achieve ?
Product KPIs, tools to achieve these KPIs flushed out (LM incentive comes to mind), with more products to market, we need a robust base case approach to a launch and the following 3 months.

There are more that I have missed, but the intent is clear. Anything I can do to help, let me know. I would suggest some kind of vertical slice, assign tasks within the community to develop this stuff and then pull back in all the feedback, then proceed to frequent meeting flushing out individual topics. Essentially, we are defining a roadmap for the team and shaping the culture we want to encourage.

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Strong agree that we need to figure this out before anything else

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I would really love to see some engagement from @anon10525910 and others at Set on this post as well as the North Star and KPIs post. I don’t think there’s consensus here and the lack of engagement by the author is disheartening.

At the same time, the weekly planning deck already has slides that list North Star and Core KPIs as proposed, without taking into consideration any of the feedback by the community. It feels like the decisions have already been made and the community is just an afterthought.

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looks like some feedback came in over the weekend on both posts. I** will be digging in, synthesizing, responding soon! :+1:

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I finally had time to review all the responses in this thread that I had not yet responded to, thanks for the patience!

Here are the main points I’m gathering :point_down: lemme know if I missed any:

  1. Decentralization should be fleshed out(@LemonadeAlpha, @verto0912, @overanalyser)
  2. There is need for more clear leadership structure & framework (@Mringz )
  3. There is need to clarify the IIP path (@Mringz, @reganbozman )
  4. @Matthew_Graham introduced unlocking the value of passive holdings, token inflation planning, and product KPIs as additional needs

The goal behind this post was to crystallize challenges felt among us all today and establish a strategic direction to guide the Coop.

Based on the feedback here and in Reaffirming Our Focus (I’ll synthesize there next :slight_smile: ) it’s clear that there are additional challenges, and that the conversation still needs to develop. Super excited* everyone is part of the conversation; we all need to be!

(p.s. I’m keeping this post as a synthesis and open-ended for that reason :+1: )

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I am amazed by such progress rate in such a short time! All the new goals are in reach of as a community we work towards the same target.
Still reading and learning in order to assimilate all the information but I am here, ready to give my best to help out!
Best wishes!

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