This is very inspiring stuff and very exciting that YC is backing it! A key thing that Pia said in her TED talk: technology is only a tool here, cultural change and reinvention is necessary. I haven't had a chance to play with DemocracyOS yet, but the focus does somewhat seem to be on "direct democracy" (as opposed to "representative"), and as others have pointed out, that's fraught with problems.

But I hope and believe this is just a first, experimental step. And I hope that next steps will be informed by the rich tradition of experimentation in "participatory, deliberative democracy". This includes things like citizen assemblies, citizen juries, participatory budgeting, wisdom councils, etc. What these approaches have in common is a blending of citizen participation with informed deliberation, often including a random sampling (of citizens).

As two superb examples of this, I would point to the Citizen's Assembly on Electoral Reform (British Columbia, Canada, 2004) and the Dialogue with the City (Perth, Australia, 2003). Some really useful books: Tao of Democracy (Tom Atlee), Deliberative Democracy Handbook (Gastil & Levine), Deliberative Democracy in America (Ethan Leib).