Willa Köerner

Fri Dec 01 2023

Alex Zhang has been FWB’s “Mayor” for just over two years. Before passing the torch, he reflects on key learnings from the role, and shares how this move helps make our DAO even more decentralized.

This interview between FWB Mayor Alex Zhang and FWB contributor Willa Köerner took place in November of 2023. As we look to the future, we're excited to share that FWB's new mayor will be announced during our upcoming Town Hall on Thursday, December 7 at 3pm EST (in the FWB Discord).

Willa Köerner: You're about to transition out of your term as FWB’s Mayor. How do you feel?

Alex Zhang: Honestly, the word is bittersweet. The “bitter” part is, you know, FWB has very much been at the center of my identity, and my social and professional circles, for two years now.

Then the “sweet” part is about being extremely excited for the new evolution of FWB, and this journey of progressive decentralization with a new council-based leadership structure. I’ve always been interested in how online communities can have successful transitions of power, and I think the plan we’ve landed on—where we’ll have a new Mayor who focuses exclusively on the DAO, and a new community-elected Council working to guide DAO operations—will be an exciting evolution.

Since our organization is such a multi-headed being, I’m looking forward to seeing what new leadership will do after coming together, with me continuing to play a key role with strategic partnerships. My hope is that the council will have a fresh take on the forms and approaches our emergent organization can take, and they’ll try some new things that we haven’t attempted before.

To take a step back, not a lot of organizations have a “Mayor.” In many ways, the role was sculpted around you and your approach to leading FWB. Can you share more about how you’ve spent your time in the role?

Lately, I’d say 30-40% of my time has been spent on cultivating partnerships that generate revenue, because that's been a really clear mandate for us this year. The other large chunk of my time is allotted to managing the Core Team—including Ops, Treasury, Marketing, and Product—just making sure that everything is in sync. And then there's a lot of putting out fires, since we’re operating in uncharted territory and there’s no blueprint. Because of that, it takes a lot of thought to figure out how to approach and optimize our work.

Was it always your plan to step aside as Mayor?

When I took on the role, I had discussed with the community that it would roughly be a 2-3 year commitment, as we focused primarily on establishing our identity. My core responsibilities revolved around getting a team set up, finding some sustainable revenue streams, and establishing our core pillars of activity—things like IRL events, FEST, partnerships, product, brand, and content—all of which are now up and running. Beyond establishing and growing FWB as a community, my purpose has been to iron out our vision and approach as an organization.

It’s my strong belief that a community shouldn't have a singular leader or CEO forever. I’ve been a part of various different membership organizations and clubs in the past, and I always thought it was a disservice to the community when a small room of people were in charge of all executive decisions, in perpetuity. A democratically run, time-based transition of power enables new ideas and new ways of thinking to emerge in ways that align with the community’s needs. So with that perspective, I always knew there would come a time for me to step aside. It’s less about me “leaving,” and more about the fact that my role, in its current iteration, has reached its natural conclusion.

When the Core Team first started discussing the end of your mayoral term, it felt rather simple, like, “Okay, time to elect a new mayor.” But the conversation quickly spiraled into, “What should FWB’s leadership structure be at this point?” With a lot of community input, we ended up with an approved proposal to have a five-seat Community Council, plus a CEO-type Mayor role. Can you share more about this plan?

When FWB began, it was essentially a structureless group chat with a lot of energy. As we’ve gone along, we’ve been working in real time to figure out how to structure our entity. Now that we've had about three years to figure out our strengths and weaknesses, we’ve become much more prepared to establish strategic organizational and leadership structures.

Moving forward, FWB will operate under the leadership of the Council and Mayor, collaboratively, with the Mayor running projects that generate revenue, and the Council in charge of community stakeholdership and advocacy. In this way, the DAO will be truly stewarded by the community, and fully decentralized. The idea is that the Council will be able to bring the community and Core Team into better alignment, through a codified process of engagement, checks, and balances.

One interesting thing about the DAO is that it can really be anything, and do anything—it’s defined more by the people who are a part of it than by one central mission or product. As FWB’s leadership transitions, what points of reinvention are you anticipating?

I'm hoping the leadership change enables FWB to function in an even more emergent way. One thing we haven't done successfully is make the proposal process very accessible to our members. Because of that, we haven't seen many successful community-generated proposals. I think that might be because our leadership has been a little bit heavy-handed, like, “We've got it,” even in moments when we could have benefited more from community input.

I’m also looking forward to seeing where the new leadership takes our revenue-generation model. I've always wanted to push for more on-chain activity, creation, and experimentation, but we naturally gravitated towards producing in-person activations—mainly because it was a way for FWB to clearly differentiate ourselves. At this point, we're lucky to be able to truthfully say that we’re the best at throwing events in web3. But I’m excited for new realms of experimentation to occur on-chain.

One thing I am proud of is that FWB has a really great brand. People want to work with us because of that, and because of what we stand for. So I’m excited to see how the new Mayor and Council will push the brand in new directions, and into new collaborations. It’s an exciting time to try new things and not get pigeonholed.

To reflect a little bit on your time as Mayor, what was the most challenging decision you had to make during your tenure?

The first fundraise we ever did in 2021 felt like a huge fork in the road. Like, “Do we go left, or do we go right?” At that point, I was maybe six months into the role, and it was the beginning of the bull market. After a lot of consideration, we decided to pursue the treasury diversification round, and raised about $10 million to build and expand FWB. I didn't make that decision alone. We made it with a lot of different people, and brought it to a community vote, which passed.

In many ways, that money significantly changed the vibe of the organization. A lot of people ask, “Do you regret doing that?” Ultimately, the decision framework we used to decide to take the funding was based on our foresight in knowing that a bear market would eventually come. Whether it was one year or three years away, we knew that diversifying the treasury—and not just relying on the value and liquidity of the FWB token—was going to be a strategic move. And we knew that the regulation landscape was only going to get more confusing, so working with legitimate and invested stakeholders who had experience and access was going to be very useful.

When you’re creating a new category, you need all the support you can get. It felt like a bet on the idea that we could push the definition of what DAOs were, and how they could operate.

With those funds, we were able to build an amazing crypto-native lifestyle brand. Without venture funding, it might have taken us five years to build the brand up to where we are now in terms of global recognition. Plus, we never would have been able to launch FEST, or do any of the other major things we’ve done.

Overall, we’ve learned that moving forward, any venture capital component needs to fund something that can more efficiently capture large-scale enterprise value, which traditionally means building some kind of software. And so that's the next big step we're taking with FWB—evolving our software component into its own C-Corp, and separating its operations from the community-run DAO.

Why do you think venture capital can’t, or shouldn’t, fund a community?

Venture is the sport or art of making an asymmetric bet with a 50x return. To get that, a ton of growth needs to happen—and communities just don't function in that way. Growing FWB to 100,000 or more people would obviously deprecate the fundamental membership value. We knew software would be the key to help us grow in a more community aligned capacity, as you can scale software with much higher leverage. If you're a user, and you're experiencing a software product, if there are 10 million users on it, your experience might actually be better than with a smaller community. But that absolutely does not hold true with real, person-to-person communities.

The other thing we came up against are the mechanics of creating a community economy, where the FWB token could be used as a cultural currency amongst all the different stakeholders in our ecosystem. We’ve learned this approach has its own challenges, with token liquidity and ERC 20s and the fact that if you and I are a buyer or seller, and you create a good and you price it in $FWB, your only way to cover the cost of that good is to then sell the token, which creates an inverse incentive as well. We’ve made really great progress on this front, through the proposal and future introduction of a treasury restock process that connects our revenue generation to replenishing the FWB treasury which goes into effect early next quarter.

So essentially, the key learning here was that separating the community-run DAO from the software-focused C-Corp would enable FWB to function much more effectively.

Assuming FWB has created a new category, how would you define that category at this point? Is there more to define before it can become a repeatable model?

FWB has built a truly unique cultural-consumer DAO experience, operating as a bridge from the real world into web3. But over a five-year period, my hope is that our category becomes more synonymous with “digital cooperative.” The idea of a digital cooperative that brings various member benefits together into one cohesive community is extremely exciting to me. It could become a repeatable model for bringing people with shared values together into a shared culturally-driven economy.

In 2023, FWB had its first year as a revenue-positive organization. This is huge, as it proves we’re developing a model that can be sustainable long-term. Now the focus needs to be on growing and sustaining the groundwork we’ve laid.

This year FWB leaned into partnerships as our key revenue model, and it’s been quite successful. At the same time, we’ve run into a lot of challenges when trying to pass our Core Team’s operational budgets, when community members have voiced concerns about our runway, and wanting to keep expenses low. Why is it so hard to manage workloads and budgets within a DAO?

There's this great essay that Miles Jennings from Andreessen wrote, . His critique is about how the incentive structures for DAOs don't make much sense. When you have a smaller core group that receives a large amount of the upside—such as with a startup—that makes everyone really want to put in the work. On the other hand, when you have a large group that only stands to gain a small amount of upside from their work—such as with a DAO—an environment of disorganization can easily take hold. When this happens, it’s hard to get anything done.

We've seen this play out, and I'll take some responsibility for this, but it all comes back to budget and revenue. Coming to consensus around how to allocate and spend funds is extremely hard when you’re working with a decentralized community. The question of saving revenue versus spending money to make money has continued to be a contentious issue for us.

While it’s been challenging to align the entire FWB community around budgets, do you think that this friction has ultimately been a good thing for the DAO?

As Miles wrote in his article, a static leadership class will ultimately fail. This idea that systems should have constant opposition as a way to avoid a static balance of power feels right to me. It’s the same thing with making a leadership change. Friction and forced churn allows for new energy to come in, and keeps lazy energy from building up. Also, a constant, healthy amount of paranoia—which, to be real, I've had for the last two and a half years—is probably good for an organization like ours. As a core team, we’ve gotten into the practice of asking ourselves, “If this decision were made visible to the entire community, would we still do it?” This has served as a guiding northstar and while a bit intimidating at times, that has been very motivating to me, and it’s also why I love this new structure of an elected Council. It'll bring new perspectives, but also new work ethics, and a new sense of hunger.

What is your biggest hope for the long-term future of FWB?

I hope FEST continues to exist, so I can go every single year. [Laughs] Then the larger hope is that we actually get to create even a sliver of our bull-market utopian dream of a decentralized, autonomous networked city.

I do think it’s possible to create a network of 50,000-100,000 people who have their own currency, and that currency grants access to various cultural and social experiences. Embedding community and status and texture into a form of fungible currency is still super exciting to me, and I think FWB can and will eventually accomplish that. Crypto as an industry needs to mature a bit to get there, the tools and onboarding need to be more efficient, and in general, a stronger cultural and social adoption is necessary. We’ve already started building on some of the initiatives that will get us there, and as the leadership baton gets passed, we’re absolutely moving in the right direction.