3 Things: Modern Livestrong Bands, Nanny Share Platform, Comp Tools for DAOs

Happy Sunday and a very warm welcome to all the new subscribers! I’m thrilled and honored to have you as readers and truly appreciate your thoughts and feedback 🙏. Each edition of 3 Things will contain a dive into 3 rabbit holes I’ve found myself going down recently. Subscribe to get each week’s edition straight to your inbox and if you enjoy it, please share (I suck at self-promotion so can use your help)! This past week I’ve been thinking a lot about:

• Modern Livestrong Bands

• Nanny Share Platform

• Comp Tools for DAOs

1. Modern Livestrong Bands

In 1997, the Livestrong Foundation was formed as a non-profit in Austin Texas by former professional cyclist Lance Armstrong to support people affected by cancer. The name became famous in 2004 when they launched a bright yellow silicone wristband in partnership with Nike. The yellow color was a reference to the Tour de France where the leader traditionally wears a yellow jersey. Within a few years, the bracelets had become a phenomenon and over 80 million of the bands were sold. They became a cultural symbol and a must-have accessory; you couldn’t go anywhere without seeing people wearing some version of them. Knock-offs started popping up left and right with various colors and words, representing different types of affinity groups and personalities. There were even sites that enabled you to make-your-own band for $5+ a pop. After the scandal with Lance Armstrong broke in 2012, the foundation distanced itself from the athlete and the bands have pretty much ceased to exist.

As our lives and communities shift more and more online, you can create avatars and digital personas that have certain levels of reputation and clout. Maybe you’re a member of FWB (Friends with Benefits) or maybe you own a few Bored Apes or Cryptopunks. Maybe you’re an engineer that has 10k stars on GitHub or you’re a writer with 30k readers on Substack. You might have 100k followers on Twitter and be verified with the blue check. When you’re online, people know who you are, but in the physical world, there is no way to signal certain levels of status or your membership to an exclusive group. I think there is an opportunity to take the concept of the Livestrong bracelet and create a physical representation of digital status or community. It doesn’t need to take the form of a silicone wristband but needs to be something simple, cheap, and easily customizable. It also needs to be highly visible and recognizable when you are out in public or go to various conferences or meetups.

2. Nanny Share Platform

The US is notoriously horrible when it comes to all things parental leave and childcare. America is one of only 6 countries in the world that does NOT offer national paid leave. In 1993 the Family and Medical Leave Act was passed which provides protection for parents to take up to 12 weeks of *unpaid* leave after the birth of a child or adoption (a few states do replace a portion of employee wages but it’s still pretty minimal). The Biden administration recently proposed changing the federal laws to provide 12 weeks of paid leave as part of the “Build Back Better” plan, but that got pared down already to 4 weeks and has not been passed by the Senate. Not only does the US lag when it comes to providing family leave, when it comes to finding childcare, most options are both extremely expensive and also hard to find and secure. In 2020, the national average rate for a nanny came out to $612/week for a single child. That’s ~$32k a year which is 50% of the median household income! If you’re in a major city, you can easily expect to pay up to 2-3x that rate. Daycare is a more affordable option costing the average family $340/week which is still $17,680 annually and requires all of the logistics of getting your kid to and from the daycare along with all of their stuff.

Historically, hiring a nanny (or au pair) or sending your child to daycare were the options on the table if one parent wasn’t staying home full time and you didn’t have a family member who could provide childcare. Recently, a new option is gaining popularity called a nanny share where 2 (or more) families share a nanny for their children. Sometimes one family is always the host and sometimes they trade off either certain days of the week or every other week where the kids and nanny are at their house vs the other family’s house. This route offers the attention and care of a nanny but allows 2 families to share the cost, which typically comes out to be around the cost of a nanny for a family with 2 kids (or slightly more). While a nanny share sounds great theoretically, there are a ton of things that have to line up to make it work. First, you have to find another family whose parenting styles align with yours and who you generally get along with. They also need to live in very close proximity for logistical purposes. Next, you need to find a nanny who is open to doing a nanny share. Then, you have to agree on logistics and costs (is one family hosting? are both? who is providing the cribs and toys? are you splitting the cost evening or is one family paying more?) and finally, you have to create the contract and get the nanny set up on payroll that is coming from 2 accounts. Companies like Care.com, Nannylane, and Otter help families find childcare, but none of them handle all of the complexities of doing a nanny share. A company could focus solely on nanny shares, offering match-making services, nanny placements, contract templates, payroll, and lots of content/guidance on handling the logistics and other nuances of having multiple families share a nanny. The business model could be a monthly fee or just set rate to access the platform and find your nanny share pod and then the platform would take a small percentage of payroll which is where most of the money would come from and which also creates stickiness and a hedge against disintermediation.

3. Comp Tools for DAOs (aka Pave for DAOs)

In today’s cutthroat battle for top talent, one of the most challenging pieces of winning a candidate and retaining your best people is putting together the right compensation plans. Most companies historically relied on either 3rd party HR consultancies who would come in and help build out custom comp plans and/or purchased data from Radford (an Aon product) and OptionImpact (a Shareworks product owned by Morgan Stanley). While better than nothing, the data isn’t real-time and also doesn’t take into consideration the company’s historical 1st party candidate data which is often more important than pooled, generic data. Over the last 3 years, more than a handful of startups have entered the compensation benchmarking space and have raised a significant amount of money like Pave, Welcome, and Pequity. These companies promise to provide significantly better ways to benchmark and communicate real-time compensation data and have been gaining significant traction among tech companies.

In the web3 space, DAOs provide a new and unique situation when it comes to compensation. As opposed to hierarchical corporate ladders with leveling and comp bands, DAOs typically place emphasis on meritocratic contributions. When DAOs are formed, governance structures are put into place that decide how and when members are compensated. The unique thing about web3 companies is that, if they are truly decentralized, almost everything should be visible on a blockchain, including how each member is compensated. A company could create benchmarking data and smart contract templates for DAOs who are trying to figure out how to compensate contributors. On top of that they should handle the payroll/distributions to create a sticky product that has ongoing utility. The closest thing I’ve seen to date is Coordinape which came out of the yearn DAO when they ran into challenges with trying to do governance weighted salaries where salaries were literally granted based on community proposals that contributor X should receive Y payment on a monthly basis. You can see how this would have major issues scaling. Coordinape provides DAOs with tools to compensate contributors and incentivize participation, but it’s more like community-driven spot bonuses than true compensation frameworks and tools. I think the wedge here could be similar to Pave with providing compensation data and benchmarks. Since DAOs are extremely new and still figuring things like compensation out, I’d imagine that this will evolve rapidly over the next few years and a trusted platform could become the go-to place for this data, just as Dune Analytics has become the go-to place for Dapp data and DeFi Pulse has become a source of truth for DeFi protocols.

That’s all for today! If you have thoughts, comments, or want to get in touch, find me on Twitter at @ezelby and if you enjoyed this, please share with a friend or two!

~ Elaine