I would like to nominate myself for Index Council.
This was not something I had intended on doing. I would much prefer to focus on building out the product team as a world-beating organization. That said, I believe there are massive opportunities for Index Coop in the near future - that we run the risk of missing out on. I want to at least share my views with the rest of the organization, so everyone has the opportunity to decide if these are goals we should work towards.
Index Coop Mission Statement
I believe we aim WAY TOO LOW as an organization. While we have retired our original statement - “be the Blackrock of crypto”. I still think it does a fantastic job of reminding us of how narrow the scope of what we originally set out to do actually was - lets take a successful business model and apply it to a new niche within the industry.
We should not model ourselves on financial institutions. They are dinosaurs. We should instead model ourselves on the tech giants of the early 21st Century. And we should aim to surpass them in time.
We need to want to disrupt finance, not ape into it through a regulatory back door before the dust settles. Co-opting a line from Google, lets organize the world’s financial system and make it useful for everyone. That’s bigger than crypto. Crypto and blockchain is not our business - it’s just a substrate for us to build our business on. What our business should be focused on is creating access for the individual to the kind of financial opportunities that have only previously been available to experts and insiders. This a the key trend we see in DeFi right now, and we would be foolish to ignore it. The BASIS-ETH is a perfect example of this. A large part of our business model should be based on identifying middle men and removing them from the ecosystem. This is how we generate massive value. The REAL index is an example of this. We can disrupt billions worth of credit markets by enabling liquidity to easily flow from on-chain to off-chain. Our mission statement needs to evolve to encompass this understanding - that decentralized finance requires the active disruption of the paradigm that currently exists. This awareness will prime us in our understanding of the landscape and inform our decisions to pursue opportunities like BASIS and REAL.
Centralization vs Decentralization
Right now IC would benefit from operating far closer to a traditional startup than we had previously. There is an enormous amount of wasted energy and overlap in the coop, and at times it’s extremely hard to identify who should be in charge of what initiative.
I would suggest, we abandon the KPI model and instead focus on OKRs (Objective & Key Result) as our key metric. The main difference being that KPIs are purely quantitative and run indefinitely. OKRs are tied directly to an Objective, and run for a defined time period. As the owner of the OKR, you have limited time to reach your Key Result. Well designed OKRs start at the organization-wide level and cascade down to Nest > Pod > Contributor. Each level down on the cascade should design their OKRs to serve the OKRs on the tier above them. OKRs should be published and publicly viewable.
The Index Council should be tasked with creating 3 to 5 OKRs, and Nest and Pod leads tasked with creating OKRs to serve those goals. Each contributor should be tasked with creating their own OKRs to serve their Pod and Nest. This is how we create real alignment around goals in a diffused organization.
When a contributor receives a request to participate in an activity that does not help meet their OKRs, they should decline. This is how we save time and energy.
Creating greater alignment now is what will enable us to decentralize more successfully in future.
Product Focus
We need to make some smart big bets. As mentioned above, there is a clear lack of product market fit for on-chain indexes right now. We may simply be too early. It is our responsibility to operate as if that potential lack of PMF is an absolute fact. The organization is in the middle of a pivot, but I believe that pivot merely takes us from drowning to threading water. We need to make some smart choices and use our limited resources wisely. There are a number of fantastic ideas germinating in the coop right now - we need to clearly define what those are and decide what to focus on.
A couple of points that are important in making that decision:
- Launching 30 products in a year might not be a wise use of resources. It will massively overly extend our marketing and distribution capacities, as each of our launches fights for bandwidth every couple of weeks. Instead we should focus on creating a smaller number of products that cover all bases, and also on building and distributing them as well as possible. This narrowed scope of action in the now, enables us to allocate more resources on the innovations we need to bring to market in 12-18 months. That should be at least 50% of our design and engineering investment. We don’t need 30 products to stay afloat. We just need to kill it with 5-7 that are attractive, reliable and profitable to run.
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We need to remind ourselves that we are in an exponential tech explosion. The near future will look very little like the past. Much of what we recognize about DeFi today will be redundant incredibly soon. We need to focus less on what is around us, and more on where we see things going. This involves taking risks. If we don’t take risks we will be left behind.
I strongly recommend we shift our focus to zero knowledge solutions as we prepare for a future when most computation and data storage is executed off-chain, and far more sophisticated apps emerge that are not limited by the current constraints of executing on the blockchain. We already see this model emerging in dYdX. There is no good reason right now to believe that the future will not follow this trend. We can be ready for it or we can try to catch up when it happens. - We need to double down on our efforts to work with Set Labs. No marriage is perfect. IC and Set have fundamentally different business models, and divergence over time is inevitable as both of our organizations grow. This already creates much tension, and much work has been done to improve communication and alignment between our teams. We need to focus less on where we differ and more on where we compliment each other. Set wants to be the premier asset management platform. IC wants to the premier asset manager. The scope for synchronicity here far exceeds what has been accomplished to date. Historically, Set has acted as the initiator in much of the strategic communications between our teams. We need to reverse that relationship. Set is a service provider - they should not be leading the dance. IC needs to set clear objectives and then align Set on our roadmap. Both parties will be much happier in the partnership if we can get this right.
- To be a great service provider, we first need to be a great product team. Partnering with the right teams can 80/20 our growth in the near future in a way that almost no other activity can. First we need to demonstrate to the market that IC’s internal product team can win without partners. I know that the product team as is today lacks some degree of legitimacy in the eyes of the rest of the coop - we have never designed any big winners in house. This will change soon. This current pivot towards FIXED, icETH and BASIS is the result of months of development and cultural shift in the team. We are now ready to deliver. A strong product team that can stand on its own two feet will build confidence in the coop, but also in our external partners.
Resourcing
I think the liquidity pod should be disbanded and the treasury function of the organization scaled back. The liquidity pod has never served it’s function properly - existing either as a lame duck that underperformed, or as a frustrating arena for contributors to push an agenda or pursue a pet project that does not tie directly to their remit in their home nest/pod. I say with absolute certainty, that @allan.g, @overanalyser and I could perform all important functions of the pod in a couple of quick messages a week. I strongly encourage the excellent research and analysis of @anthonyb.eth and @jackiepoo to continue under the analytics pod. They are adding a tremendous amount of value. I also thank @MrMadila for stepping up to lead the team when it needed it. However, the output of the group is not justifiable considering the time burden it places on high value contributors.
Having an activist treasury with resources dedicated to asset management is a distraction from our core business model. It should be paused completely until a later date when that function would be more appropriate to the business. All of the accounting and reporting done by @ElliottWatts , @Hammad1412 et al is excellent and should be enhanced and supported.
We need a far more focused traditional media marketing function in Index Coop. My previous experience in the music industry has shaped my perspective here. Music, as a business, has essentially been in decline for 20 years. People in that industry know how to get shit done with very little resources. We overly optimize for social media. Social media grows our awareness, but our legitimacy comes from association. This needs to come from traditional media and advertising. Sharing one article where we are featured by the WSG or equivalent is worth 500 of our own tweets. Orienting our organization towards Crypto Twitter is a huge mistake. We need to be far more focused on working with publicists and agencies that can bring our products into the reach of normal people who don’t follow web3 DAOs on twitter. I have had a number of excellent conversations about the opportunities we can leverage with @dev in recent weeks and strongly recommend he run for council and take a leadership role over our marketing function.
Edited the last paragraph to specify that I am talking about marketing via traditional media - PR agencies and ad campaigns.
Conflict of Interest Disclosure
Employment: None
Directorships: None
Paid DAO contributor: Index Coop
Consultancies: Arbolus - DeFi advisor
Financial arrangements: None
INDEX token holdings: None substantial
Significant token holdings: None
Significant token equity holdings: None
Non-Disclosure Agreements: None
Management Fee arrangements: I stand to receive a management fee icETH, MNY, FIXED.
Token voting delegations: None
Any of the above disclosures for family or connected parties: None
Other: None