Motivation
Since the early days of the DAO, the community has been in pursuit of a physical space to call home. A place to host social events, bring speakers, and hang out to chat about our favorite shitcoins. This is something we set out to accomplish since day one (we literally talked about having a co-working space in our first Medium post) of the DAO and now we have an opportunity to make it a reality.
Through this proposal, I’ll walk you through the opportunity that was presented to us, its costs and challenges and provide ideas on how we can successfully meet the monthly expenses associated with the space.
Opportunity
On March 26th, Kyle Krasicky and I had the opportunity to meet Randall Crowder (COO) and Alan Knitowski (CEO) of Phunware. For those unfamiliar with the company, Phunware is a software and blockchain company founded in Austin TX that produces mobile applications for marketing, advertising and cryptocurrency brand loyalty programs. They are among the few publicly traded companies that are deeply rooted in the industry having successfully designed and implemented a token model (PhunToken, $PHTK) to power their loyalty and rewards ecosystem.
The purpose of the meeting was to speak about a potential partnership between ATX DAO and Phunware to share office space. The relationship is intended to be beneficial for both parties involved. On one hand, Phunware is looking to be close to a vibrant community of crypto professionals and enthusiasts to encourage innovation and accelerate adoption of Web3 technology in the city. On the other hand, ATX DAO benefits from having a physical presence in the city, naturally augmenting our energetic digital footprint. The design and purpose of the space is entirely up to the DAO allowing for a mix of social events, co-working space, thought leadership and networking events, small seminars, VIP events, and product launches. Our imagination is the only limit to what we can do.
Lease and Space Details
Okay, now let's get into the juice of the deal.
The property under discussion is located at 1002 West Avenue. It is a unique building, conveniently located in the historic Judges Hill Neighborhood, in close proximity to both the Travis County Courthouse and the Texas State Capitol. Easy accessibility to major thoroughfares, including Guadalupe Street, N Lamar Blvd, 11th Street, MoPac and IH-35.
The old adage is true: It's all about location, location, location.
Before undergoing renovation, the building’s three-floor layout was designed to meet the needs of a business. The first floor consisted of five private offices, a large office, and a conference room. The second floor had three private offices and one elongated room, suitable for those seeking open office space. In total, the building is 7,458 square feet.
Additionally, The property has a large backyard with outdoor seating areas and tree covers. The property also has on-site parking making it perfect for the DAO to host all sorts of social events.
Randall estimates the lease to be $45K per month for the entire space. Phunware is still in conversations with the landlord ironing out the details of the lease. We will amend the post once we have a clear understanding of these details. In any case, the estimated cost for ATX DAO will be $10,000/month amounting to a $120,000 annual liability. Our goal is to agree on a 1-year lease with the opportunity to renew for an additional year.
Based on our conversations, ATX DAO would be entitled to the third floor of the property, which is estimated to be between 2,000-2,500 square feet of space. Additionally, the DAO will have access to the conference rooms and space on the first and second floor as well as outdoor space for our member-only and community events. Phunware has generously offered to provide some additional desks and help outfit some of our space as well at no additional cost.
While it may seem trivial, one big benefit of subleasing from Phunware instead of pursuing an entire space is maintenance time and costs. Although we will likely be responsible for cleaning up after our social events, the property’s upkeep costs such as security, lawn care, tree trimming, roof repairs, exterior paint jobs, wiring, and plumbing issues will be handled by Phunware. On top of maintenance, commercial leases have to pay operating costs such as property taxes, insurance and other landlord costs totaling an additional fixed cost of $10,000/month. As a whole, this arrangement will vastly reduce the DAO’s obligations to maintain the space.
You can see a walkthrough of the property here and here. Randal provides a vision of what the space will look like when the renovations are complete in the first video. The second video (shot by the one and only Crystal Gravy) shows the outdoor and patio areas of the property.
Financial Model
Alright Roberto, the spot is cool and all but how the hell are we going to afford it?
While still under consideration, this property opens up the opportunity for several revenue-generating endeavors.
Hackathons
Hackathons are the top priority because they tend to be among the most profitable events the DAO can host. If done properly, we estimate the DAO could generate between $50,000 to $100,000 in revenue depending on the size, cash prices and format of the event. While one hackathon per quarter may be unfeasible, the goal would be to host two or three per year.
In addition to covering the DAO’s monthly expenses, hackathons play an important role in the goals of the DAO. Accelerating Web3 adoption in the city will be a direct result of hosting events where individuals can come together to build cool crypto tech.
Sponsored Events
Events such as Austin On-chain and Consensus add an additional revenue stream for the DAO. Historically, these kinds of events have been used to generate buzz around the organization. However, the DAO’s strong network of partners/sponsors and newfound city-wide recognition can be used to turn social events into revenue-generating events. We bring the party to the city and make a quick buck while doing it.
We estimate a $40,000 to $50,000 profit for large events such as SXSW and Consensus moving forward.
To be clear, this property will not be used to host events the size of SXSW and Consensus. The purpose of this section is to highlight a revenue source that can be used to maintain the space. Community events like Luster Pearl and our Government event are the kinds gatherings we will be able to host in the property. Anything greater than 100-120 people will be hosted in a different venue.
Subscription Service
The last source of revenue is through a subscription model. We proposed two tiers that will allow ATX DAO members to access the space during office hours (8AM to 4PM) as well as other benefits outlined below.
ATX DAO HQ Founder Tier
This is OG of OGs when it comes to ATX DAO HQ. The cost of this tier is $4000 and will provide the following benefits:
- 1. Full access to the co-working space and ATX DAO HQ
- Name on the wall as founding contributor
- Recognition for creating the first ever Web3 centric co-working/social space in Austin
- If there are any exclusive events happening in the venue (speakers, HH, networking sessions) founders will be the first ones to register/sign-up given the space constraints
- Full design control over what to do with the space
- A predetermined amount of REP tokens defined by a DAO proposal
- ATX DAO Founder HQ NFT
Quarterly Tier
The second tier available to members will be Quarterly Tier. The cost of this tier is $750 and will come with the following benefits:
- 3-month all access to the co-working space and ATX DAO HQ
- First access to all exclusive events in ATX DAO HQ while pass is valid
Both Founder and Quarterly tiers will only be available to official ATX DAO members. NFT holders that are not part of the Founder or Quarterly groups will be able to come to the space after 4PM at no cost. Non-NFT holders will have to pay a fee to enter the space.
The motivation behind the ATX DAO HQ Founder tier is to bootstrap the initial capital required to meet the monthly expenses during the early days of the co-working space.
In an ideal world, we would like to find 20-25 community members that would be willing to participate in the Founder round so the DAO can have enough capital to operate the space for the majority of the lease. If done correctly, the revenue generated from Consensus and our first hackathon should provide enough cushion to cover the entire liability. Kyle Krasicky, Malcolm Navarro, Jon Gregis and myself will be the first ones to contribute to this cause. If you would like to participate, please fill out this quick google form so we can get in touch with you when finalizing the details of the lease.
As part of the proposal, the community needs to agree to use all the revenue generated from hackathons and social events towards maintaining ATX DAO HQ. Once all liabilities are met, the DAO may choose to use the remaining funds as the community sees fit.
For more information on the financials of the property, you can check out the property’s financial model and revenue assumptions here. Huge shoutout to Scott Wilcox for helping us crunch the numbers!
Closing Thoughts
ATX DAO HQ is by far the biggest endeavor this community has faced. This opportunity is filled with uncertainty and will require lots of coordinated work to make it happen. However, this is not the first time our community faces this kind of challenge. The entire history of the DAO is peppered with situations like this one.
My earliest memory of being in this position was during the launch of the Genesis round NFT. We created a vision of what we wanted to accomplish and managed to convince 25 incredible individuals to drink our ATX DAO Kool-Aid. I am a little embarrassed to say this now, but back then we had nothing. No art, no NFT smart contract, no Discord, no Snapshot, no Gnosis Safe. Literally nothing.
Nevertheless, with only one week to deliver on our promises, we managed to find an artist, write our first NFT contract (ask Jon G. or Malcom M. at the next HH about this, It was messed up) and set up the basic tooling to run the DAO.
Fast forward a couple months later and we found ourselves in a similar situation but this time at a bigger scale while planning Austin On-chain. Even though the event turned out to be one of the most epic and successful events ATX DAO has hosted, it was quite the bumpy ride. In short, we had promised to throw one of the biggest crypto parties SXSW had ever seen. To pull this off, we needed to find a sick venue, incredible panelists, professional DJs, and convince a lot of companies to give a random DAO in Austin (ATX DAO who?) a shit ton of money to pay for the party. The bill was north of $100,000 and I am not exaggerating when I tell you that we were missing roughly $80,000 three weeks before the event (ask Kyle K. if you don't believe me). We were literally NGMI.
Despite the uncertainty, our incredible Partnerships, Events and Marketing teams (massive shoutout to Kyle, Mason, Mitch, Grady, Ellie, Jesse and Nick for pulling off the impossible) decided that WGMI and set out to tackle all the challenges, one by one, to create the event that put ATX DAO in everyone’s radar.
The point I am trying to make is that if we hadn't set out to accomplish these lofty goals we wouldn't be the organization we are today. Taking on this new challenge is a bet on our ability to execute and do the work needed to make things work. I know we can do it because we have done it over and over again in the past. This time will be no different.
