Specifically:
"Co-founder and CEO Itsuki Daito sees the store as a way to not only revive retail post-pandemic, but also to create a community space, where owners — half of whom will be locals and the other half from around the world — would have to agree on how to spend profits. While there may be a downside of having too many people in charge, one investor [reacts] that's just more 'wisdom of the crowd.' Will there be buy-in?"
This issue of 'buy-in' of course always applies to new ideas (and particularly new technologies). What I find fascinating, instead, is the underlying community-based structure to decision making and, in this particular case, engaged commitment to a for-profit organization:
"Daito's pitch goes like this: when the DeStore app is launched this fall, anyone will be able to buy a blockchain-based token that represents ownership in the store, and join the community's server on Discord, a chat app similar to Slack that includes many elements of more traditional social media platforms. The greater the value of the tokens participants own, the greater their share of voting power. As the store gets up and running, token holders will be able to vote on what brands to stock and sell at the location, what furniture to buy, and even who will work there. What happens to any revenue the store may generate will also be up to a vote."
Buy-in from the local part of that community, is clearly essential:
"A big test of this idea will be whether people actually want to spend their free time running a store in Hayes Valley, or have the expertise to do so successfully. Ideally, Daito says, 200 people will be part of the DAO. … Part-owners can choose to staff the store themselves, or hire outside employees, or even conscript Daito himself to operate the register."
The idea was partly motivated by those who predict the downfall of retail in the aftermath of the COVID-19 pandemic:
"Within the wreckage, Daito sees opportunity. 'During the pandemic, online shopping is getting bigger, of course. But offline shopping is getting bigger as well, if they provide offline-only value,' he said. 'Like a community experience; like a touch-and-feel experience.'"
What also makes the experiment interesting, though, is how the investors will chose to utilize any profits generated:
"Still, there's no clear return on investment from the store itself, given the fact that owners will have to agree on whether to divide up profits amongst the DAO or put the money back into new products. It's a gamble partners in a traditional LLC — or part-owners in a small business — make all the time, according to Parrott. In a DAO, there are just a lot more cooks in the kitchen. Or, as he puts it, more 'wisdom of the crowd' to go around."
Either way, what is clear is that the potential for blockchain technology is only just becoming apparent and will present opportunities to reshape the business world.
Take care
David
David Chandler
Strategic Corporate Social Responsibility: Sustainable Value Creation (6e)
© Sage Publications, 2023
Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/
This Entrepreneur is Betting the Future of Retail Runs on the Blockchain and Discord
By Sarah Holder
August 9, 2022
Bloomberg CityLab
