Cabin is building a network of modern villages for families and friends. As we consider business models for Cabin, there are a few key questions to ask:
- Is this a core pain point that people have a burning need to solve?
- Are we offering a solution much better than alternatives?
- Who will pay for this, and what will they pay for?
Is this a core pain point that people have a burning need to solve?
Yes. As weāve described in the vision doc, we have a strong belief that local neighborhood building is the clearest practical answer to some of the biggest problems people are facing right now: increasing isolation and decreasing standard of living are making it difficult to make friends & raise families. This is a core burning problem felt by a large enough portion of the population that it has been declared an epidemic by the US Surgeon General.
This is especially true for families. We have repeatedly heard from families (and personally experienced!) the burning need for community to make parenting easier. We are increasingly hearing from community members without children that raising kids in a community-centric environment is a pre-requisite to having kids in the first place.
Are we offering a solution much better than alternatives?
While some local communities are already flourishing, we believe most are not. For most people, particularly Americans, there are simply not great options for local community engagement.
Churches, fraternal orders, and other social clubs that once served this need have been in rapid decline for decades. They do not speak to the values of younger generations. Traditional consumer products canāt fill the gap very effectively because real connection isnāt a product you can buy. In a sense, itās pricelessāthe result of the hard work of bottom-up community building.
Cabin does not yet have a perfect solution for most people and most places. But we are seeing the first examples of what a 10x better solution can look like vs. the average neighborhood. This is a long gameāyou can see the results from Shani, Graham, Radish, and Fractal who have invested years into neighborhood building. If we are able to replicate these models, we can creates a solution that is fundamentally transformative for peopleās lives.
So, goal #1 is keep burn low and stay alive long enough to get to transformational outcomes. Given we currently have 5+ years of runway, we are on track here. The primary goal is to find and create a critical mass of quality neighborhoods ā none of these monetization paths are viable without that fundamental piece in place, which will take time.
Who will pay for this, and what will they pay for?
Our greatest strength for solving the problem (approaching it in a bottom-up community-centric way) is perhaps the greatest weakness for creating financial sustainability for the network. Monetizing ācommunityā itself is a notoriously difficult and sometimes pernicious exercise, because communities are built on reciprocity economies instead of financial ones. Peer-to-peer relationships are what make communities successful, and also make it difficult for the network to capture any of the value being created.
Butāif we are able to dramatically improve peopleās lives and reshape the way they live, there should be ways to make it financially viable. So, who benefits from the formation of neighborhoods, and how might Cabin recoup some of the value it creates in building these neighborhoods?
Hereās a list of possible customers and offeringsāincluding how they could work, revenue potential, and how we are starting to experiment with themāroughly ordered from shorter-term/lower value to longer-term/higher value:
Neighborhood Stewards
Neighborhood Accelerator
How it could work
The Neighborhood Accelerator program is how we onboard new neighborhood stewards and kickstart new neighborhoods. The primary value of this program is the creation of neighborhoods, not the direct monetization of the program itself. That said, we will charge money for the cohort-based program because we believe that participants demonstrating skin-in-the-game creates a sense of commitment to the program.
Revenue potential
We do not expect the revenue from accelerator program fees to be a primary driver of overall revenue for the DAO. For example, 20 cohort participants * $400 * 4 cohorts per years = $32,000 / year. Possible that we can increase participants per cohort, cohorts per year, and revenue per participantābut itās clear that this program at best breaks even.
Experiments
We intend to charge $400 per neighborhood for participation in the Fall cohort of the accelerator.
Neighborhood Residents
People moving to Cabin neighborhoods
How it could work
As the City Directory grows, it will become a more valuable place for people seeking the Cabin lifestyle to find a place to live. There are at least 3 ways Cabin can create revenue from helping people find places to live:
- Create a marketplace for rental openings in neighborhoods
- Become a real estate brokerage for home purchases
- Work with corporate customers to provide a white glove experience for relocating new hires to desirable neighborhoods
Revenue potential
There is a lot of revenue potential and a relatively straightforward business model that already exists for both rentals and purchases.
For rentals: the standard commission for 1 year leases is first months rent, which means something like ~$1-3k per referral. If we could facilitate 10 of these a month, that is something on the order of $250k / year in revenue.
For purchases: the broker commission of 1% on a $1M home purchase is $10,000. A buyerās agent fee of 3% nets $30,000 per $1M home (though the regulations around these rates are changing).
Experiments
We have our first request from a current accelerator cohort participant to help us fill a housing spot. We are going to try to help with this and see if it makes sense operationally.
Third places in Cabin neighborhoods
How it could work
Community third places, which offer a gathering place and community amenities for a membership fee, can be profitable endeavors. In particular, we think there is a growing market for family-oriented third places that combine a social club, childcare, and co-working amenities. This model is still pretty nascent, but most major cities (at least in the US) now have at least a few options.
Revenue potential
Depends on the model:
-
Full-on traditional daycares with a coworking space attached. For many people, the daycare is the #1 priority and the coworking space is secondary. Seems like this model is particularly appealing for moms who are breastfeeding and working full time. Becoming a licensed daycare is a huge pain in the US and has lots of regulations, but they can charge a lot of money (thousands per kid per month).
-
Coworking spaces with a limited option to drop off your kids for 1-3 hours at a time (which often has different & less difficult licensing requirements than full time daycare). The operations of these places depends a lot on state regulations, but they are oriented towards people who have primary care plans for their kids but occasionally need a place where they can leave the kids while they take calls, etc.
-
Kitchen-sink all-in-one operations, like All One Thing, Lifetime Fitness, or country clubs ā usually have a place you can drop your kids off part time, and a wide range of amenities like gym, pool, restaurant, coworking space, etc etc. Potentially very high build and operational costs, but can charge a lot of money (some country clubs cost $100k+ per year).
-
Community spaces with combination coworking/kid areas (eg https://www.thedendenver.com/). Usually operate on a monthly membership or punch hole pass-based system. Parents are still responsible for the kids, but can share duties watching them and/or contract their own nanny/nanny share while they are in the space. Tend to be relatively low cost ($60-150/month) and include some kid-themed programming, etc. Tend to be more community oriented.
Experiments
Several neighborhood stewards, including myself and @KathiInPorto are exploring building something like this model in our neighborhoods. Very early stage ā itās unclear to what extent this will materialize into real projects or what Cabinās role would be.
Shared neighborhood resources
How it could work
Cabin could help neighbors band together to access goods and services that become more affordable with pooled local resources. For example:
- Services like lawn care, pool cleaning, etc
- Community goods like emergency preparedness caches
- Insurance pools
Revenue potential
Unclear/needs more research. Shared local services may be hard to manage through the network. Possible we could offer community goods as products. Insurance pools, while complicated and highly regulated, formed the financial basis for the entire fraternal order movement of the last centuryāso there might be something there.
Experiments
@camlindsay and Shirah have been exploring the potential of emergency preparedness caches in their neighborhood in Oakland.
Neighborhood treasuries
How it could work
In theory, it makes sense to have each neighborhood operate as a community org with transparent, multi-player onchain financials. In practice, the crypto onboarding barriers for this are still quite high. That said, you could imagine a future reboot of Citizenship that is more based around local neighborhood treasury contributions, with a portion going back to the Cabin treasury.
Revenue potential
It requires significant scale to produce meaningful revenue from transaction fees. 100 neighborhoods with 50 members each making a $5/month contribution to neighborhood treasuries is $300k / year; a 7% kickback to the DAO would be $21k.
Experiments
Talking with neighborhood accelerator participants to understand where there are actual needs. Some ideas and experiments have been proposed by neighborhood stewards like Shirah, Charmaine, and Matai. Not a clear priority right now, possible potential in the future.
City builders
Popup village events
How it could work
We have seen early signs of PMF from popup villages, particularly in cases where a community partners with a group building a permanent settlement/larger city building project.
Cabin has a couple options here:
- Host our own popup villages & larger conferences/camps
- Host events or programs within other popup villages (particularly for families, which seems to be a gap in the market right now)
Revenue potential
Popup villages are essentially long conference events, and while ticket sales and sponsorships can gross a lot of revenue, they donāt tend to be very profitable endeavors relative to the work they require. For example, see FWB Fest, a highly produced event that grosses >$1M / year but has not been profitable. Similarly, Edge City events aim for break-even economics.
Experiments
We are hosting Network Society Camp in October, a foray into larger group gatherings. The event has already grossed >$100k in revenue, though we donāt expect it to net much money. The potential here is probably in the second-order benefits of these eventsāeg brand building, content, fundraising, and partnerships with city builders. Itās possible the juice may not be worth the squeeze for us to do big events on an ongoing basis.
Cabin neighborhoods as part of larger city projects
How it could work
A helpful analogy for understanding network societies comes from blockchains:
- Layer 1s, like special economic zones and charter cities, are focused on creating regulatory/legal control over a specific physical territory
- Layer 2s, like Cabin, are focused on building strong communities of people
There are a growing number of new city building projects (like Prospera, Braavos, Tipolis, Fumbatown, California Forever, etc) that are making headway on legal autonomy, land, and financingā¦but need to attract communities of people to live in the sandboxes they are building. Thereās the potential for a natural alliance between these groups and communities like Cabin.
Revenue potential
As soon as a charter city is created, finding people to live there becomes the primary existential problem. These tend to be very well resourced organizations that are happy to subsidize early demand, often in the form of land grants that have the potential to massively increase in value (potentially 1000x+ multiples) if the project is successful.
Experiments
We have an agreement with Prospera to give us a free lease on an apartment in the new Duna residential tower, which we are filling with a Cabin neighborhood steward. We are using this as a trial balloon for potential bigger partnerships like this.
Public goods funders
Web3 public goods funding
How it could work
Thereās a common belief in web3 that āpublic goods are goodā, and many individuals and protocols direct substantial donations towards public goods funding. Often, this funding goes towards things like blockchain infrastructure instead of more tangible, real world public goods. As the ReFi movement grows, we expect more web3 public goods funding to search for real world local public goods to fundāand we think Cabin neighborhoods could be a primary place for that funding to be effectively spent.
Revenue potential
Gitcoin alone has directed $60M towards public goods funding since 2019. Other mechanisms like Giveth and Artizen are also distributing millions in funding.
Experiments
We are currently running an experimental match grant program, entirely funded by Artizen, to support projects at Cabin neighborhoods. We are also in early discussions with Vrbs, a Nouns spin-off with a focus on local public goods funding.
Governments and NGOs
How it could work
Existing towns, cities, states, and countriesāand the nonprofits that work on issues at these scalesāwant strong local communities, because there are so many positive knock-on effects for society.
Revenue potential
Unclear, but individual grants from governments and NGOs for these types of projects are often tens to hundreds of thousands of dollars.
Experiments
@savkruger has explored a local Colorado grant program for community building. These types of grants are not a top priority for us right now, but governments and NGOs could become a substantial funder in the future, particularly once we are able to prove the model.
Other optionsā¦
This list is long but not exhaustive. What other business models might make sense for Cabin to reach financial sustainability? How could it work, what is the revenue potential, and what small experiments could we run to test it out?