Background

The terms “Sharing Economy” or “Collaborative Economy” have been commonly used in recent years to refer to a proliferation of initiatives, business models and forms of work, from the development of far-reaching corporate digital platforms that have become means of organising cooperative practices, to local, regional and community-led collaborative initiatives in sectors such as housing, tourism, transport, social enterprise, culture and the arts, etc. Researchers from many disciplines are currently conducting ethnographic studies of practices, cultures, socio-technical systems and lived experiences of collaborative economies, producing case studies and data sets documenting these realities and their impacts and implications, as well as developing methodological and epistemological insights and sensibilities about approaching these contexts
ethnographically.

The conference will feature parallel paper presentations, keynote talks and open discussion sessions.

Participation in the conference will be free of charge (but places will be limited).

The conference is supported by the COST Action “From Sharing to Caring: Examining the Socio-Technical Aspects of the Collaborative Economy” ( http://sharingandcaring.eu/), developing a network of actors focusing on the development of collaborative economy models and platforms and on social and technological implications of the collaborative economy through a practice focused approach.

Submission Themes

We are soliciting papers contributing ethnographic accounts and understandings of collaborative economy practices and communities, and therefore contributing to the development of a multi-faceted view on sharing and caring practices. We are also keen on receiving papers focusing on the methodological aspects of studying collaborative economi(es) e.g. collaborative ethnography, participatory action research, co-design etc.

Suggested themes include (but are not limited to):

• Ethnographic accounts of practices and/or of forms of community aggregation in collaborative economy settings
• Ethnographic case studies of collaborative economy initiatives, frameworks and platforms
• Instances of ethnographically-informed design of collaborative systems in support of collaborative economy practices
• Reflections on theoretical, epistemological and methodological challenges of studying the collaborative economy ethnographically

Submission Instructions

• Abstracts should be between 500 and 700 words
• Papers should be between a minimum of 3,000 and a maximum of 4,000 words plus references.
• Papers should be anonymised for submission
• Papers should be formatted according to the requested template.
• Submissions should be made through EasyChair.
• All papers will be peer reviewed by the Scientific Committee, and accepted papers will be included in the conference book of proceedings and invited for presentation at the conference.
• Following the conference, authors of accepted papers will be invited to submit extended versions of their contributions for consideration for inclusion into an edited book.

Important Dates

Abstract Submission Deadline: 15 April 2019

Notifications to Authors: 29 April 2019

Papers Submission Deadline: 19 July 2019

Notifications to Authors: 19 August 2019

Final Versions of Papers Due: 20 September 2019

Conference in Edinburgh: 25th October 2019

Organising Committee

Penny Travlou (University of Edinburgh)

Proferssor Luigina Ciolfi (Sheffield Hallam University)

Scientific Committee

https://ulris.ul.ie/live/[email protected]Gabriela Avram (University of Limerick, IE)

Chiara Bassetti (University of Trento, IT)

Vida Česnuitytė (Mykolas Romeris University, LT)

Professor Luigina Ciolfi (Sheffield Hallam University, UK)

Professor Richard Coyne (University of Edinburgh, UK)

Morgan Currie (University of Edinburgh, UK)

Professor Dimitris Dalakoglou (Vrije University Amsterdam, NL)

Anna Farmaki (Cyprus University of Technology, CY)

Alessandro Gandini (University of Milan, IT)

Karen Gregory (University of Edinburgh, UK)

Athina Karatzogianni (University of Leicester, UK)

Cindy Kohtala (Aaalto University, FI)

Airi Lampinen (Stockholm University, SE)

Cristina Miguel (Leeds Beckett University, UK)

Maria Partalidou (Aristotle University of Thessaloniki, GR)

Chiara Rossitto (Stockholm University, SE)

Mariacristina Sciannamblo (Madeira Interactive Technologies Institute, PT)

Professor Chris Speed (University of Edinburgh, UK)

James Stewart (University of Edinburgh, UK)

Özge Subaşi (Koç University, TR)

Penny Travlou (University of Edinburgh, UK)

For further information about the conference and/or CFP, please email us here: [email protected] [email protected]

The post CfP: “Ethnographies of Collaborative Economi(es) Conference” – University of Edinburgh, 25 October, 2019 appeared first on P2P Foundation.

As a more recent Enspiral member based in Europe, they asked me to write about the larger landscape I saw a network such as Enspiral being part of. I had gotten to know this space quite well and from a different perspective, by being in the midst of the global Ouishare community since 2012. I liked the prompt, and said yes.

A global movement with no name

My essay in Better Work Together, Welcome to the age of participation, puts forward a question: are organizations like Enspiral and Ouishare isolated phenomena, or are they part of a larger, emerging movement? If this is a movement, what are its characteristics? What are the key themes and commonalities? Who is part of it? What could be its’ impact on the world?

In reflecting on my experiences over the past 8 years in various countries, communities and (many) gatherings, the conclusion I reach is no — these are not isolated phenomena. They are part of a growing movement. This left me with a challenge: how do I describe a movement that my intuition tells me exists, but that has no name or quantitative measure? In my essay, I put words to my experiences to draw out the common patterns and themes I can see.

There is a movement on the rise that it is leveraging the power of community, networks, and participation to work on systemic challenges.

Here is how I describe this global movement: a movement that it is leveraging technology and the power of community to connect local and global action and form networks to work on systemic challenges. This not only exists conceptually, but is a tangible reality with a growing number of projects scattered across the globe. The organizations that are part of it come from a broad range of sectors — from environment, to agriculture, to education, to health, to business, to politics. This diversity makes it harder for them to recognize each other. Yet, while their areas of work may differ, their modes of operating are similar. They are aware that their work is a contribution — not a complete solution — to the challenge they aim to solve, and that it is a piece in a much larger puzzle (of global wicked problems).

To understand the facets of this movement more clearly, I identified five main fields (not the only ones) it spans across:

1. The Sharing & Collaborative Economy
2. Circular Economy & Ecological Activism
3. Social Entrepreneurship & Impact
4. Open Source & Decentralization
5. Digital Nomadism & Freelancer collectives

As broad and different as these fields may seem, many of the people and organizations working in them share an ethos, a culture, and many common values. In my essay I paint a colorful picture of this culture and those who are championing it.

Its’ stars are not famous figureheads, but the communities as a whole.

Here is a snapshot of some of the organizations I alone have encountered throughout my work, whom I see as part of this culture (and which are mentioned as examples in the book):

Amanitas Collective, B-Corp, Civic Wise, Commons Network, Edmund Hillary Fellowship, Fab City, Holochain, Impact Hub Network, MakeSense, Malt, Open Collective, Open Food Network, Ouishare, Platform Coop, P2P Foundation, Remotive, Scuttlebut, Shareable, Transition Towns Network, Wemind, Zero Waste Network.

And there are so many more.

Moving from connecting to collective action

This movement has matured a lot since I entered it in 2011, from a fuzzy niche to gradually becoming more defined. The level of connections between the people and organizations within this ecosystem has been increasing, but that is just the first step.

We can all be different and united in action.

Cross-community initiatives like Neotribes, Human Networks, and Dgov Foundation are demonstrating the value of working beyond your own community and networking the networks. Now it’s time we use the fabric we have been weaving between us to move from connecting to collective action. If this movement is to achieve the impact the world needs right now, we need to recognize: we can all be different while united in action.

Read the full essay in Enspiral’s first book, Better Work Together!

Better Work Together reflects on 7+ years of learnings from the Enspiral community through short essays, practical guides, toolkits and personal reflections. It covers different facets of the future of work, including self management, collective structures, cultural processes and tools to deliver a global perspective on how embracing new ways of working together can transform how we do businesses — with practical examples from real world learning.

If you liked this article, I appreciate your claps, following me on Medium and twitter.

Follow the organizations mentioned above on Medium: OpenCollectiveHolochain Design OpenFoodFrance B Corporation B Lab UK BCorpSpainRemotive Malt Shareable TransitionTown Media Fab City Global InitiativeImpact Hub makesense

Thank you Kate Beecroft for the edits and Joshua Vial for the title inspiration!Some rights reserved

The post Better Work Together: Reflections from a nascent movement appeared first on P2P Foundation.

The ExO Foundation’s MTP (Massive Transformational Purpose) is Migrating Society to Abundance. Michalski explores exactly what abundance means in that context.

Jerry Michalski is the former managing editor of Release 1.0, a technology newsletter. He is the founder of Sociate.com and ReX (Relationship Economy eXpedition).

The post Jerry Michalski ponders ‘abundance’ in the face of artificial scarcity appeared first on P2P Foundation.

I’ve spent most of the past 2 years travelling with my partner Nati, trying to discover what is the most strategic & wise action to take in a world that seems to be accelerating towards collapse. After an enormous amount of consideration, I have a strategy that feels good enough to engage my will and commitment. This document is a statement of intention. All going well, it’s where I want to invest my productive energy for the next 7 years or so.

I’m developing this plan in three phases:

• Phase 1 is a lot of conversation and contemplation.
• Phase 2 is this writing and re-writing process. Writing in public forces me to fill in the gaps in the argument, and to make my assumptions explicit.
• Phase 3 is where you come in as a reader and collaborator. If you feel struck by this proposal, I’d love for you to improve my thinking with your feedback. The best possible response will be for other people to run related experiments in parallel.

The proposal is very simple. But this is, I hope, the simplicity on the far side of complexity. The design elements come from 7 years of thinking & doing in the Loomio Cooperative and Enspiral Network.

I intend to start a new community as a sibling or cousin of Enspiral: about 30 to 200 people supporting each other to do more meaningful work. Our method will focus on getting people into “crews”, small groups of 3-8 people that start with emotional intimacy and get to economic intimacy. There’s a sequence from psychological safety to shared ownership of productive assets. The larger community functions mostly as a dating pool for people to find their crew-mates. The crews support the personal development of their members while doing useful things like providing housing, establishing circular-economy startups, growing food, making revolutionary art, or whatever activity seems meaningful to their members.

That’s the short version: form small groups, share feelings, then share money. In the following few thousand words I spell out the long version. I think modular and open source strategy is much more valuable than charismatic leadership, so I’m documenting my strategy as thoroughly and accessibly as I can. Because it is open source, you can copy it, modify it, and help me to spot bugs.

This article is long, so let’s start with a map:

Part 1. I start by briefly setting context, giving a name to the metacrisis I believe is threatening society as we know it.

Part 2. Then there’s a chunky piece of theory to explain how I think about groups, and groups of groups.

Part 3. With that background established, I can spell out my “microsolidarity” proposal in more detail.

Part 4. Then we get to the counter-intuitive part. I’m intentionally contradicting a lot of received wisdom from progressive and radical politics, so I want to do that explicitly, in the hopes that we can learn from each other.

Okay, let’s go!

Part 1. Collapse

I won’t spend a lot of time on this point because it is a downer, but it deserves a mention: we are well into a major collapse of our biological life support systems. Oops!

Just one data point: the population of wild animals on Earth has halved in my lifetime (source). This is not new information, but we are mostly in denial. Extinction Rebellion, a new climate action movement from the UK, remind us that we’ve known this at least since 2006 when the United Nations (UN) warned us that “humans have provoked the worst spate of extinctions since the dinosaurs were wiped out 65 million years ago”. Yet our response is still piecemeal, uncoordinated and counter-productive.

While the biological substrate for life is disintegrating, so is our social fabric. Democratic populations are electing dictators and buffoons. Fascism is resurgent. Our ability to make meaning is dissolving. Across the political spectrum, people respond to this existential dread by retreating into anxious certainties. Political conversations feel brittle and explosive, one wrong word can trigger an artillery of shaming tactics to shut down the heresy.

This is how I set the design criteria: assuming we are in a major collapse, what is an appropriate action to take? How do we repair our damaged biological and social ecosystems? How do we plan for a future with much less peace, much less food, much less stable governance? What kind of action plan is fit for purpose in the last decade of the Anthropocene?

See, I told you this section would be a downer. But I promise from this point on it’s all optimistic and constructive.

Design criteria for action amid collapse

First criteria: we need enormous courage to persist without a guarantee of a positive outcome. Because I’m plugged into a renewable source of courage, I am a very hopeful optimistic confident person. So where does courage come from?

Second criteria: we need resilient methods for making meaning in the midst of chaos. The shortcomings of the old institutional media and the new networked media are collaborating to produce a freak wave of collective insanity. The popular votes for Brexit, Trump, Boaty McBoatface and Bolsonaro all illustrate the magnificent failures of our sense-making apparatus.

Third criteria: people with life-supporting values need to grow our power to influence the distribution of resources. Just 100 individual CEO’s are responsible for 70% of the world’s greenhouse gas emissions (source). The oligarchs are killing us. We need to get our hands on power of that magnitude, but it needs to be much more widely distributed and much more accountable.

So my humble proposal needs to produce limitless courage, make meaning from chaos, and grow enough power to counterbalance the suicidal oligarchs currently in charge. No big deal

Finally, I believe that the core of this bio/socio/psycho/spiritual collapse is a metacrisis of relationship, it’s about how I relate to the different parts of myself, to other people, and to all the other creatures, life, spirit, etc on this planet. If that’s true, then my response must be relational first. This article is written in the first person singular: it’s all I, I, I. That’s a stylistic choice for creative freedom. However, that language obscures the reality that all of this action is conducted in the first person plural: there is always a “we” acting together, me and others.

So that brings us to my theory of groups, which you can read in Microsolidarity Part 2: a Theory of Groups and Groups of Groups. //

Microsolidarity Part 2: a Theory of Groups and Groups of Groups

Definition of terms

For me to explain my theory, I need to invent some language. Unfortunately in English, we are missing words for different kinds of group. When I say “group of people” I could mean 3 people, or 300, or 3 million. These missing words are symptomatic of missing ideas.

So I’m going to propose some new words, to access new ideas. I’m not attached to the specific terms, and this is not a comprehensive map of all the different kinds of group, it’s just a subset of terms that will be useful for this argument.

1: the Self

The first group has only one person, it’s Me (or You). In this article, when I say “Self” I’m thinking of a tight network of overlapping identities who share custody of this body we call Me. Viewing my Self this way invites me to treat all my parts as worthy of respect and compassion. We’re all lifetime members of the consciousness called Richard D. Bartlett, even the ones I try to disown and shut down.

For more on this, Emmi’s article on consent and autonomy is a good introduction to the idea of a “networked self” and it’s implication for your relationships.

2: the Dyad

A Dyad is a relationship of two. If you can forgive the tremendous oversimplification: let’s imaegine society is an enormous Lego structure, but the only building blocks we have are Dyads. And now let’s say a Dyad can only be in one of two states: Domination or Partnership. Domination is imbalance, coercion, abuse, colonialism, the most controlling parent of the most acquiescent child. Partnership is like the balanced and consenting intimacy of two interdependent adults. Could also be a best friend, sibling, therapist, mentor, imaginary friend, spirit guide, etc. Because we learn so much through mimicry, an intentional Partnership Dyad is the best method I know for growth, healing, and development of the Self.

If you want to follow this logic that domination relationships are the root of all injustice, and partnership relationships are the root of all freedom, here are some juicy links: check out ‘NO! Against Adult Supremacy’, an anthology of zines available online & in print; Transactional Analysis is a therapeutic method for understanding interpersonal behaviour as parent-, child- or adult-like; and Aphro-ism is a Black vegan feminist argument that all oppression can be understood through the human-subhuman divide.

I reckon if the old domination society is finally disintegrating, let’s grow the next one around partnerships. I’m talking adult-to-adult, not parent-child relationships, from home to school to work to community to government. Are! You! With! Me!

3: the Crew

A Crew is a group that is small enough to fit around a single dinner table, around 3-8 people. This is about the same size as a nuclear family, but without the parent-child power dynamics. This is a long-term set of relationships with singular purpose, like a co-op, shared house, or affinity group. The size is important, because it is small enough to stay highly coordinated with minimal explicit rules & roles, and large enough that your enhanced impact is worth the cost of collaborating. If you observe many interactions in a Crew, you get many opportunities to learn about different ways of being a Self and being in a Partnership.

4: the Congregation

There’s another crucial size somewhere between 30 and 200 people: small enough that most of the members can know each other’s name, big enough to support many Crews to coalesce. Coordinated impact at this scale requires some formal rules & roles, but mostly you can hold coherence just by putting a bit of extra effort into the relationships. In my experience the best way to find your Crew is to spend some time in a Congregation. Coordination gets a lot more complicated beyond this point.

If you use my language for a second, you can think of Enspiral as a Congregation of Crews. We fluctuate around 200 people, all supporting each other to do more meaningful work. We have a big annual gathering, a coworking space, a participatory budget, and many experiments in developing systems for mutual aid. Loomio is one of about 10 or 20 stable Crews in the network, each one focussed on a specific purpose, like fixing the diversity problem in the tech sector, or providing accounting services to social enterprises, or building an intergalactic communications network.

The Crews and Congregation are in reciprocal co-development. I can absolutely say Loomio wouldn’t exist without Enspiral, and Loomio’s success has made major contributions to the development of other Crews. So my proposal is to work at both of these scales simultaneously.

5: the Crowd

There’s probably a couple more useful distinctions beyond 200 people, but for the purpose of this map, all human groups bigger than Dunbar’s Number get lumped into this one category: the Crowd. This includes corporations, neighbourhoods, regions, nations, multitudes, swarms, and many different kinds of networks, conferences, festivals, etc. All of these groups share some important characteristics. Only a minority of people can expect to be recognised in a Crowd. To develop and maintain trust, peace, coordination & coherence over time requires a lot of infrastructure: formal articulation of rules and roles, enforcement of norms, and checks and balances to ensure the just application of that enforcement.

There’s an empty space between Self and Crowd

From where I’m standing, it looks like contemporary neoliberal urban westernised society is mostly designed for Selves and Crowds. There’s a little space for Dyads, and almost no room for Crews and Congregations.

Anywhere you look: government policy, media narratives, conferences, employee performance management, UX design, the healthcare system… in all these different fields you will usually hear people being treated as either individuals or anonymous mass populations. Check any story in today’s newspaper and you’ll see what I mean. Climate change will be fixed by “you recycling” or “government policy” or “a social movement”.

That’s what individualism looks like: the vast majority of our conversations are about individual people (you, me, a public figure, your boss or lover), or about very large groups (Americans, progressives, women, programmers), which are so populous that the individuals have lost their distinct identity. Individualism is a metaphysical virus that allows us to only see trees, never the forest. This virus leaves us poorly equipped to work in groups.

Over the past 7 years of working with people who are trying to make the world a safer, fairer, healthier place, I’ve concluded that membership in a good Crew is a critical success factor. People enmeshed in really great Crews are most resilient to the psychological cost of doing social change work, and therefore the most able to think and act strategically. It’s at this small scale that we decontaminate each other, recover from the individualist virus, and start to learn a new way of being together.

So this brings is the core of my experiment: can we create the conditions for many excellent Crews to coalesce?

Read all about it in Microsolidarity Part 3: The Reciprocity Game…

Microsolidarity Part 3: The Reciprocity Game

Crews: when they’re good they’re really very good

Around ~5-8 people is a sweet spot of high impact and low coordination cost. Our little Loomio co-op is one example: we’ve raised more than $1M in ethical financing and supported 1000s of groups to be more inclusive and more effective in their governance. This is a scale of impact that I cannot possibly have on my own.

A good Crew is not only super efficient. It can also be a potent site for personal development. In a Crew you can experience human difference as a resource, which is our best antidote to bigoted tribalism. It’s a place to practice multiple Partnerships simultaneously, a rich source of belonging, acceptance, recognition, and accountability, a place to start coming out of my traumatised patterns of behaviour. My Crew is where my values gain nuance and complexity. One example: I only learned the crucial distinction between fairness and sameness by practicing a tonne of collective decision making around money.

In my original design criteria I said I want to work in a way that produces courage and meaning. You begin to see how Crews play such an important role when you view courage and meaning as social phenomena.

Simply, I believe courage is developed when we encourage each other, with our enthusiastic listening, praising, challenging, cuddling, gazing, regarding, acknowledging and reminding. It’s a fucking discouraging world out there! I need almost constant deposits of encouragement to maintain a positive balance in the courage account.

Meaning, too. I make sense of a phenomenon by considering how my peers respond to it. If I know them very well, and I know myself well, I can interpolate the meaning of an event from the scattered data of my peers’ reactions. My stable membership in a few Crews gives me great confidence in my ability to make sense of this chaotic world.

Unfortunately, Crews are often dysfunctional

Because we’re infected with individualism, we lack the techniques, behaviours, language, beliefs, ideas, tools, and nuanced values required to thrive in multiplicity. As a result, many small groups suffer common ailments: mini dictatorship, hidden hierarchy, too much consensus, not enough consensus, toxic culture, unresolved conflict, repetitive trauma, equal power dogma… We can easily get stuck in the triangular domination patterns, or the circular design-by-committee patterns.

Nati and I have spent the past 2 years helping groups to recover from some of these dysfunctions. I’m writing a book of practical solutions for the common failure patterns of collaborative groups. Hopefully these ideas can help a little, but what’s needed most of all is practice.

I’m curious what happens when we start new groups, already inoculated against the most common strains of the individualism virus. So in 2019 I plan to start a bunch more Crews so I can learn how to start them well. Here’s the first draft of the experiment I intend to run. I’m already looking forward to coming back here in a year to discover which ideas were totally misguided. Yay, practice!

A Sequence to Crystallise new Crews

The first step is to start a Congregation localised to one geographic region (I’m starting in Western Europe). Nati and I will invite about 20 or 30 trusted people to a first gathering where we can co-design the minimum viable structure to govern our community.

As a starting point I suggest our purpose could be something like “people supporting each other to do more meaningful work”. That is, peers mobilising our diverse strengths to look after our peers, not institutional, paternalistic, or condescending support. “Meaningful work” is intentionally subjective, inviting a complicated amalgam of different purposes: planting trees, raising kids, writing software; if it is truly meaningful to you, it’s probably worth doing. And “more” is ambiguous in a good way: maybe you need more meaning in your work, or you’ve already found your meaningful work but you want to do more of it, or maybe you want to shift the whole global system of work to be more meaningful. All the options are good!

If the 20-30 people subsequently invite 1 or 2 more, we’ll have a first cohort of up to 90 people, which should be a big enough dating pool for complementary Crew-mates to find each other. Hopefully we can immediately launch a handful of new Crews and run many micro-experiments in parallel.

I suspect the first thing to do within a Crew is to establish psychological safety, a space where all the parts of your networked Self are welcome to show up. From there, the job is just to respond to the needs in the group.

Most of the people we plan to invite have already got a sense of what work is most meaningful to them, but almost all of us are financially precarious. So I’m interested in moving quite rapidly from emotional intimacy to economics. An easy place to start would be to disrupt the money taboo and expose our financial parts to each other: how much income do you earn? Where does it come from? What lifestyle would support you to be at your best? How much does that cost? If you need to earn more, are there some creative new tactics you can try? If you already earn enough, are there opportunities for you to get the same money with less compromise in your values, or more freedom in your time, or with more social impact? If you have a surplus, what needs to be true for you to want to share it with your crewmates?

Personally I’m interested in building economic solidarity, because I think we can do more good when we’re in a position to be generous. But maybe the rest of the Congregation will have different priorities. Mostly I’m interested in experiments that produce deep deep trust.

The Reciprocity Game

Building trust is not rocket science. It’s mostly about reciprocity i.e. building a track record of doing each other favours. Here are some versions of the reciprocity game I’ve tried. If you know some more, please share ‘em!

Level 1: Listening

Sit in a circle. One at a time, someone says something that is true for them right now, e.g. “I’m excited about x” or “I feel sad because Y”. All you have to do is pay attention, listen to each person in turn, then eventually you say something that is true for you. If everyone listens to everyone, congratulations, you all just earned 1 reciprocity point.

Level 2: Money

One person talks about (A) the work they do for money, and (B) the work that is most meaningful to them. Discuss together how they might bring A and B into closer alignment. Now, anyone can make a small gesture to help make this happen, e.g. share a new perspective, offer a design process or productivity improvement, make an introduction, encourage them to keep trying even though it is hard. If you offer something: hooray, 5 points for you. If you asked for something you need, hey! 5 points for you too! And BONUS! you both get an extra point for talking and listening with mutual respect and positive regard.

Level 3: Consistency

It’s pretty easy to do something nice one time and have a momentary surge of good feelings. If you really want to excel at the reciprocity game though, focus on consistency.

Either in a Partnership (2 people) or in a Crew (up to 8), practice meeting once a month (virtually or in person). Reflect on where you’ve been and envision where you might go next. (You can do this during or before the meeting.) Take turns to share your reflections.

Everyone gets 1 point for the first meeting, 3 for the second, and 5 points for every meeting after that. 5 points deducted for missing a meeting.

If you want a little more structure, here are some documented processes you can try:

• Feelz Circle (3 processes for sharing emotional care between friends/ comrades/ lovers)
• Care Pod (personal-and-professional development in small groups, a new practice in development at Enspiral, based on Intentional Change Theory)
• Stewardship (peer support system for Partnerships)
• The Elephants (long term personal development for Crews)

Level 4: Conflict

Now we’re getting into the harder levels. Conflict is a great way to strengthen ties. It goes like this: you do something thoughtless, or miscommunicate in a way that upsets somebody you care about. They get hurt. Then you apologise, take responsibility, and attempt to make amends. They listen and forgive. Woohoo! You transformed your conflict into greater connection: 10 reciprocity points each! Careful with this one though, because you lose 20 points each if you don’t find a mutually agreeable resolution.

Level 5: Co-owners

After you’ve played a few rounds of the earlier levels, you might be ready to play Co-owners. Start with an idea, maybe it’s a new tech platform or a community project or a commune. Maybe it’s a savings pool or lending circle or livelihood pod for sharing credit, income or savings with your trusted peers. Whatever the idea, find some people who want to work on it with you. Now, when you formally incorporate as a company or an association or co-op, whatever, share the legal ownership with a few people. Congratulations, 100 reciprocity points! Whatever happens, this relationship is going to form a part of your life story.

Okay that is all fun and cool and optimistic, but if you’re reading with a critical eye you’ll notice that there are some parts of this proposal that run against the grain of a lot of progressive and radical thinking about social change. In the next part of this article, I’ll name some of the ways this recipe is unorthodox. Then y’all can help me discover if I’m the good kind of heretic, or the very very bad kind.

On to Part 4. An Unorthodox Recipe For Social Change…

Microsolidarity Part 4. An Unorthodox Recipe For Social Change

There are many components of the microsolidarity proposal that are out of step with the prevailing currents of progressive and radical thought. I’ll name five of those attributes here. I intend to acknowledge the risk of travelling off piste, and start the process of building accountability. This is a very exposing piece of writing, so please assume positive intent and check in with me if something triggers you.

1. Exclusivity

One of the most striking counter-intuitive parts about the microsolidarity proposal is that, if you’re reading this and we don’t know each other personally, you’re not invited. I invite you to start your own Congregation, but you’re not invited to join mine. That’s a bit shocking, eh!

Most progressive social change actions start with inclusion as one of the top priorities. For this action though, we’re prioritising trust far ahead of inclusion. Actually there could be two barriers to inclusion: first to join the Congregation, then an even higher threshold to join a Crew.

I want to look around the circle at our first gathering and see 20 or 30 people with a specific set of traits. I’m thinking of people I can count on to contribute to the psychological safety of others, people with high emotional intelligence and good boundaries. We’re going into experimental and challenging territory, so folks need to be extra-tolerant, open to different ways of knowing, being and doing. My people know how to DIY (Do It Yourself) and DIWO (Do It With Others). We call each other to develop the highest parts of our Selves and to embrace our incomplete parts.

All of this exclusion is necessarily going to select for people with specific privileges, so it’s not a comprehensive plan to erase oppression and injustice in the world. Our collective has many responsibilities to the commons, beyond our own artificial borders. It’s critical that we use our increased resilience, resources, and opportunities to serve the needs of people outside of our tight circle. As a minimal gesture, I commit to continue doing the work of documentation, translating everything I learn into terms that make sense for people outside of my context.

But I’ve learned from long exhausting experience that there is no such thing as complete inclusion: the more permissive your entry criteria, the more you include people whose behaviour excludes others. So the question is not “should we exclude people?” but “which people should we exclude?”

2. Not for profit but with profit

Here’s another zinger: we’re going to deal with money, so that means we’re going to have to deal with people’s money traumas. I’m hoping Tom Nixon can join us at least in the early days, to help us renegotiate our relationships with money.

Most of us are clenched when it comes to money, because of the stories and experiences attached to it. This seems to be especially true of people who are committed to making positive social impact with their work (me, for instance). We see the harm done by wealth inequality and corruption, so we conflate the wealth with the inequality. Anticapitalists conflate the marketplace with capitalism. We treat money as if it were dirty: I handle cash with my left hand while my right hand pinches my nose shut against the dreadful smell. It’s as if money is a pernicious acid that is just waiting to dissolve my values. Taboos prevent us talking about it, asking for what we need, and offering to help when we can.

I’ve tried being broke, and I’ve tried having enough to be generous, and I know which one is better for the planet.

When I was 21, after reading Small Is Beautiful, E.F. Schumacher’s powerful short book on meaningful work, I immediately wrote a blog post publicly declaring my rejection of bullshit jobs (if you follow that link, pls don’t read anything else on that blog because it’s super embarrassing ). I didn’t grow up with easy access to capital, so it took another 7 or 8 years before I started to earn a minimal wage on my own terms. (Note: this is not a “bootstraps” story though, as I certainly did enjoy the privilege of New Zealand’s social welfare system to pay my rent when I couldn’t.) Now I’ve co-founded two small worker-owned businesses which pay me to do my most meaningful work (Loomio & The Hum), and pay to taxes so the state can do things like running the social welfare system.

These companies are not built for profit, but with profit. Generating our own income means we have the freedom to chart our own course. I think it takes money to do something ambitious, and it takes freedom to do something radical. So I want to be in community with people who are growing their financial resilience and co-investing in each others’ commons-building companies. I know the marketplace can be distasteful, but the situation is urgent, we need to be super effective.

3. Do Better Than Good

A lot of political strategy aims to change people’s behaviour because it is the right thing to do. If you want to be a “good” person, you’ll recycle, give to charity, and stop saying sexist things.

I’m more interested in strategies that can outcompete the “bad” option. I’m a feminist not because it’s the “good” thing to do, but because my quality of life improves as my relationships come out of patriarchal patterns. I absolutely believe we’ll all be better off without patriarchy, it’s not a tradeoff between winners and losers.

So I propose to outcompete individualistic consumerism with microsolidarity. I mean, how hard can it be to do a better job of meeting people’s psychological and material needs than this shitty 21st century gig economy? How many people have I met in the past few years who lack meaning and stability in their work, or who lack a sense of belonging? That’s our opportunity! Belonging is not a binary, like “yes” you’re connected or “no” you’re isolated. Belonging is a fractal: I have distinct needs for connection at each scale, from my Self, to my Partnerships, up to my Crew, Congregation and beyond. So do like the Emotional Anarchists do, and find freedom in the interpersonal.

4. Decentralised governance with not a blockchain in sight.

‘Nuff said.

5. Design for smallness.

In a world obsessed with big and fast, I’m designing for small and slow.

If our Congregation gets much bigger than 100 people, it’ll be time to start thinking about how to split in two. I’m starting “an independent sibling” of Enspiral rather than growing Enspiral to include more people, because I think the size is a critical success factor. I expect to be in this project for years before we see great returns.

In the past few years I’ve learned another important reason why “small is beautiful”, beyond what Schumacher wrote: our intimate peer-to-peer relationships have an extraordinary capacity for ambiguity and complexity. A high trust group can be very coherent and effective even with very low levels of explicit agreement about our state, direction and norms. It’s impossible to maintain this level of trust and connection beyond one or two hundred people. As organisations grow in size, they are governed less by interpersonal relationships and more by formal written policies, procedures, and explicit agreements. The written word is intolerant of ambiguity, and can only ever capture a tiny subset of reality, so groups that are governed by text are much less able to cope with complexity.

If you want to be agile and adaptive in a complex and rapidly changing environment, you must move as much decision-making power as possible into groups that are small enough to be governed by spoken dialogue, not written policy.

(For more on this theme, see my article The Vibes Theory of Organisational Design. If you want to go deep into the difference between written and spoken records see also Walter Ong’s Orality and Literacy. For case studies demonstrating the relationship between performance and small-scale autonomy across many different industries, see Reinventing Organisations by Frederic Laloux and Team of Teams by General Stanley McChrystal.)

Ok, there are a bunch of other reasons why the microsolidarity proposal could cause alarm, but I’m feeling sufficiently exposed now so I’m ready to see what I learn from pressing “publish”. One last thought before I do:

The Assembly of Congregations: A Decentralised Autonomous U.N.?

For now I’m going to stay focussed on starting this 2nd Congregation, but it’s fun to imagine what might happen at the next order of magnitude. Here’s a fun metaphor, which I gratefully borrow from my Enspiral-mate Ants Cabraal, after he shared it on Douglas Rushkoff’s Team Human podcast:

The United Nations (U.N.) is currently our best effort at global governance. There’s 190-something nation states chipping in to fund a staff of about 40,000 people trying to make the world safer and fairer. Imagine if we mobilised another 40,000 people to work on global challenges, but instead of the traditional centralised organisational structure of the U.N., with its hierarchies, department and managers, imagine if we were organised in small, decentralised, self-managing, commons-oriented, future-proof, complexity-capable networks. After all, 40,000 people is just 200 Congregations of 200…

Are! You! With! Me!

Postscript

It’s been a couple days since I finished this major writing effort. For a moment I felt ecstatic: one part of my Self enthusiastically congratulating the other parts of my Self for being so confident, articulate and clever. But before I got a chance to publish, some of my other parts started speaking up. My confidence disintegrated as I listened to the voices of my uncertain, disoriented and timid Selves. They’re quick to point out that this essay is far too X or it’s not nearly Y enough. I think I’ve reached the limit of how long I can hold a monologue before I reconnect with my crewmates, check in, and add their sensemaking to mine. So I’m looking forward to improving this proposal with the thoughtful consideration and spirited dissent of my peers. Time to leap and trust the net will appear.

I’ll keep documenting what I learn along the way. Follow the #microsolidarity hashtag if you want to stay up to date, and support my Patreon if you want to free up more of my time for writing like this.

The post Courage Before Hope: A Proposal to Weave Emotional and Economic Microsolidarity appeared first on P2P Foundation.

The idea of a rising ‘sharing economy’ is currently a hot topic in an international debate that builds on the emergence of peer-to-peer network exchanges that rely more on access than on property, on relations more than an appropriation,to call into question the sociological understanding of the relationship between the society and the market that goes back to authors such as Polanyi, Marx and Sombart.

The aim of this monograph is therefore to bring together a selection of contributions that will help identify the analytical categories and indicators needed to interpret this phenomenon from a sociological perspective on a global scale. Through a collection of original empirical research on this topic, from Western and non-Western contexts, by both established and junior scholars and experts, this monograph will make a pivotal contribution to the study of what themes, methods and issues characterise the rise of ‘sharing’ as a socio-economic model and a new frontier of sociological research. In particular, this monograph aims to answer the following questions: what do we mean with ‘sharing economy’? What kind of positive innovations or possible criticalities might this socio-economic model bring? Does ‘sharing’ really represent an alternative to capitalism, or an example of its transformation? In which areas, and how, is the way of doing business in society changing as a result of the diffusion of ‘sharing economies’?

Photo by Burns Library, Boston College

The post Essay of the Day: Unboxing the Sharing Economy appeared first on P2P Foundation.

Last week, Katherine Maher, the executive director of the Wikimedia Foundation, published a rather surprising article on the Wired site entitled: “Facebook and Google must do more to support Wikipedia”. The starting point of her reasoning was to point out that Wikipedia content is increasingly being used by digital giants, such as Facebook or Google:

You may not realise how ubiquitous Wikipedia is in your everyday life, but its open, collaboratively-curated data is used across semantic, search and structured data platforms  on the web. Voice assistants such as Siri, Alexa and Google Home source Wikipedia articles for general knowledge questions; Google’s knowledge panel features Wikipedia content for snippets and essential facts; Quora contributes to and utilises the Wikidata open data project to connect topics and improve user recommendations.

More recently, YouTube and Facebook have turned to Wikipedia for a new reason: to address their issues around fake news and conspiracy theories. YouTube said that they would begin linking to Wikipedia articles from conspiracy videos, in order to give users additional – often corrective – information about the topic of the video. And Facebook rolled out a feature using Wikipedia’s content to give users more information about the publication source of articles appearing in their feeds.

With Wikipedia being solicited more and more by these big players, Katherine Maher believes that they should contribute in return to help the project to guarantee its sustainability:

But this work isn’t free. If Wikipedia is being asked to help hold back the ugliest parts of the internet, from conspiracy theories to propaganda, then the commons needs sustained, long-term support – and that support should come from those with the biggest monetary stake in the health of our shared digital networks.

The companies which rely on the standards we develop, the libraries we maintain, and the knowledge we curate should invest back. And they should do so with significant, long-term commitments that are commensurate with our value we create. After all, it’s good business: the long-term stability of the commons means we’ll be around for continued use for many years to come.

As the non-profits that make the internet possible, we already know how to advocate for our values. We shouldn’t be afraid to stand up for our value.

An image that makes fun of a famous quote by Bill Gates who had described the Linux project as “communist”. But today, it is Capital that produces or recovers digital Commons – starting with Linux – and maybe that shouldn’t make us laugh..

Digital commons: the problem of sustainability

There is something strange about the director of the Wikimedia Foundation saying this kind of thing. Wikipedia is in fact a project anchored in the philosophy of Free Software and placed under a license (CC-BY-SA) that allows commercial reuse, without discriminating between small and large players. The “SA”, for Share Alike, implies that derivative works made from Wikipedia content are licensed under the same license, but does not prohibit commercial reuse. For Wikidata data, things go even further since this project is licensed under CC0 and does not impose any conditions on reuse, not even mentioning the source.

So, if we stick strictly to the legal plan, players like Facebook or Google are entitled to draw from the content and data of Wikimedia projects to reuse them for their own purposes, without having to contribute financially in return. If they do, it can only be on a purely voluntary basis and that is the only thing Katherine Maher can hope for with her platform: that these companies become patrons by donating money to the Wikimedia Foundation. Google has already done so in the past, with a donation of $2 million in 2010 and another $1 million last year. Facebook, Apple, Microsoft and Google have also put in place a policy whereby these companies pledge to pay the Wikimedia Foundation the same amount as their individual employees donate.

Should digital giants do more and significantly address the long-term sustainability of the Digital Commons that Wikipedia represents? This question refers to reciprocity for the Commons, which is both absolutely essential and very ambivalent. If we broaden the perspective to free software, it is clear that these Commons have become an essential infrastructure without which the Internet could no longer function today (90% of the world’s servers run on Linux, 25% of websites use WordPress, etc.) But many of these projects suffer from maintenance and financing problems, because their development depends on communities whose means are unrelated to the size of the resources they make available to the whole world. This is shown very well in the book, “What are our digital infrastructures based on? The invisible work of web makers”, by Nadia Eghbal:

Today, almost all commonly used software depends on open source code, created and maintained by communities of developers and other talents. This code can be taken up, modified and used by anyone, company or individual, to create their own software. Shared, this code thus constitutes the digital infrastructure of today’s society…whose foundations threaten, however, to yield under demand!

Indeed, in a world governed by technology, whether Fortune 500 companies, governments, large software companies or startups, we are increasing the burden on those who produce and maintain this shared infrastructure. However, as these communities are quite discreet, it has taken a long time for users to become aware of this.

Like physical infrastructure, however, digital infrastructure requires regular maintenance and servicing. Faced with unprecedented demand, if we do not support this infrastructure, the consequences will be many.

This situation corresponds to a form of tragedy of the Commons, but of a different nature from that which can strike material resources. Indeed, intangible resources, such as software or data, cannot by definition be over-exploited and they even increase in value as they are used more and more. But tragedy can strike the communities that participate in the development and maintenance of these digital commons. When the core of individual contributors shrinks and their strengths are exhausted, information resources lose quality and can eventually wither away.

The progression of the “Capital Commons”

Market players are well aware of this problem, and when their activity depends on a Digital Commons, they usually end up contributing to its maintenance in return. The best known example of this is Linux software, often correctly cited as one of the most beautiful achievements of FOSS. As the cornerstone of the digital environment, the Linux operating system was eventually integrated into the strategies of large companies such as IBM, Samsung, Intel, RedHat, Oracle and many others (including today Microsoft, Google, Amazon and Facebook). Originally developed as a community project based on contributions from volunteer developers, Linux has profoundly changed in nature over time. Today, more than 90% of the contributions to the software are made by professional developers, paid by companies. The Tragedy of the Commons “by exhaustion” that threatens many Open Source projects has therefore been averted with regard to Linux, but only by “re-internalizing” contributors in the form of employees (a movement that is symmetrically opposite to that of uberization).

Main contributors to Linux in 2017. Individual volunteer contributors (none) now represent only 7.7% of project participants…

However, this situation is sometimes denounced as a degeneration of contributing projects that, over time, would become “Commons of capital” or “pseudo-Commons of capital”. For example, as Christian Laval explained in a forum:

Large companies create communities of users or consumers to obtain opinions, opinions, suggestions and technical improvements. This is what we call the “pseudo-commons of capital”. Capital is capable of organizing forms of cooperation and sharing for its benefit. In a way, this is indirect and paradoxical proof of the fertility of the common, of its creative and productive capacity. It is a bit the same thing that allowed industrial take-off in the 19th century, when capitalism organised workers’ cooperation in factories and exploited it to its advantage.

If this criticism can quite legitimately be addressed to actors like Uber or AirBnB who divert and capture collaborative dynamics for their own interests, it is more difficult to formulate against a project like Linux. Because large companies that contribute to software development via their employees have not changed the license (GNU-GPL) under which the resource is placed, they can never claim exclusivity. This would call into question the shared usage rights allowing any actor, commercial or not, to use Linux. Thus, there is literally no appropriation of the Common or return to enclosure, even if the use of the software by these companies participates in the accumulation of Capital.

On the other hand, it is obvious that a project which depends more than 90% on the contributions of salaried developers working for large companies is no longer “self-governed” as understood in Commons theory. Admittedly, project governance always formally belongs to the community of developers relying on the Linux Foundation, but you can imagine that the weight of the corporations’ interests must be felt, if only through the ties of subordination weighing on salaried developers. This structural state of economic dependence on these firms does make Linux a “common capital”, although not completely captured and retaining a certain relative autonomy.

How to guarantee the independence of digital Commons?

For a project like Wikipedia, things would probably be different if firms like Google or Facebook answered the call launched by Katherine Maher. The Wikipedia community has strict rules in place regarding paid contributions, which means that you would probably never see 90% of the content produced by employees. Company contributions would likely be in the form of cash payments to the Wikimedia Foundation. However, economic dependence would be no less strong; until now, Wikipedia has ensured its independence basically by relying on individual donations to cover the costs associated with maintaining the project’s infrastructure. This economic dependence would no doubt quickly become a political dependence – which, by the way, the Wikimedia Foundation has already been criticised for, regarding a large number of personalities with direct or indirect links with Google included on its board, to the point of generating strong tensions with the community. The Mozilla Foundation, behind the Firefox browser, has sometimes received similar criticism. Their dependence on Google funding may have attracted rather virulent reproach and doubts about some of its strategic choices.

In the end, this question of the digital Commons’ state of economic dependence is relatively widespread. There are, in reality, very few free projects having reached a significant scale that have not become more or less “Capital Commons”. This progressive satellite-isation is likely to be further exacerbated by the fact that free software communities have placed themselves in a fragile situation by coordinating with infrastructures that can easily be captured by Capital. This is precisely what just happened with Microsoft’s $7.5 billion acquisition of GitHub. Some may have welcomed the fact that this acquisition reflected a real evolution of Microsoft’s strategy towards Open Source, even that it could be a sign that “free software has won”, as we sometimes hear.

Microsoft was already the firm that devotes the most salaried jobs to Open Source software development (ahead of Facebook…)

But, we can seriously doubt it. Although free software has acquired an infrastructural dimension today – to the point that even a landmark player in proprietary software like Microsoft can no longer ignore it – the developer communities still lack the means of their independence, whether individually (developers employed by large companies are in the majority) or collectively (a lot of free software depends on centralized platforms like GitHub for development). Paradoxically, Microsoft has taken seriously Platform Cooperativism’s watchwords, which emphasize the importance of becoming the owner of the means of production in the digital environment in order to be able to create real alternatives. Over time, Microsoft has become one of the main users of GitHub for developing its own code; logically, it bought the platform to become its master. Meanwhile – and this is something of a grating irony – Trebor Scholz – one of the initiators, along with Nathan Schneider, of the Platform Cooperativism movement – has accepted one million dollars in funding from Google to develop his projects. This amounts to immediately making oneself dependent on one of the main actors of surveillance capitalism, seriously compromising any hope of building real alternatives.

One may wonder if Microsoft has not better understood the principles of Platform Cooperativism than Trebor Scholtz himself, who is its creator!

For now, Wikipedia’s infrastructure is solidly resilient, because the Wikimedia Foundation only manages the servers that host the collaborative encyclopedia’s contents. They have no title to them, because of the free license under which they are placed. GitHub could be bought because it was a classic commercial enterprise, whereas the Wikimedia Foundation would not be able to resell itself, even if players like Google or Apple made an offer. The fact remains that Katherine Maher’s appeal for Google or Facebook funding risks weakening Wikipedia more than anything else, and I find it difficult to see something positive for the Commons. In a way, I would even say that this kind of discourse contributes to the gradual dilution of the notion of Commons that we sometimes see today. We saw it recently with the “Tech For Good” summit organized in Paris by Emmanuel Macron, where actors like Facebook and Uber were invited to discuss their contribution “to the common good”. In the end, this approach is not so different from Katherine Maher’s, who asks that Facebook or Google participate in financing the Wikipedia project, while in no way being able to impose it on them. In both cases, what is very disturbing is that we are regressing to the era of industrial paternalism, as it was at the end of the 19th century, when the big capitalists launched “good works” on a purely voluntary basis to compensate for the human and social damage caused by an unbridled market economy through philanthropy.

Making it possible to impose reciprocity for the Commons on Capital

The Commons are doomed to become nothing more than “Commons of Capital” if they do not give themselves the means to reproduce autonomously without depending on the calculated generosity of large companies who will always find a way to instrumentalize and void them of their capacity to constitute a real alternative. An association like Framasoft has clearly understood that after its program “Dégooglisons Internet”, aimed at creating tools to enable Internet users to break their dependence on GAFAMs, has continued with the Contributopia campaign. This aims to raise public awareness of the need to create a contribution ecosystem that guarantees conditions of long-term sustainability for both individual contributors and collective projects. This is visible now, for example, with the participatory fundraising campaign organized to boost the development of PeerTube, a software allowing the implementation of a distributed architecture for video distribution that could eventually constitute a credible alternative to YouTube.

But with all due respect to Framasoft, it seems to me that the classic “libriste” (free culture activist) approach remains mired in serious contradictions, of which Katherine Maher’s article is also a manifestation. How can we launch a programme such as “Internet Negotiations” that thrashes the model of Surveillance Capitalism, and at the same time continue to defend licences that do not discriminate according to the nature of the actors who reuse resources developed by communities as common goods? There is a schizophrenia here due to a certain form of blindness that has always marked the philosophy of the Libre regarding its apprehension of economic issues. This in turn explains Katherine Maher’s – partly understandable – uneasiness at seeing Wikipedia’s content and data reused by players like Facebook or Google who are at the origin of the centralization and commodification of the Internet.

To escape these increasingly problematic contradictions, we must give ourselves the means to defend the digital Commons sphere on a firmer basis than free licenses allow today. This is what actors who promote “enhanced reciprocity licensing” are trying to achieve, which would prohibit lucrative commercial entities from reusing common resources, or impose funding on them in return. We see this type of proposal in a project like CoopCycle for example, an alternative to Deliveroo; or Uber Eats, which refuses to allow its software to be reused by commercial entities that do not respect the social values it stands for. The aim of this new approach, defended in particular by Michel Bauwens, is to protect an “Economy of the Commons” by enabling it to defend its economic independence and prevent it from gradually being colonised and recovered into “Commons of Capital”.

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With a project like CHATONS, an actor like Framasoft is no longer so far from embracing such an approach, because to develop its network of alternative hosts, a charter has been drawn up including conditions relating to the social purpose of the companies participating in the operation. It is a first step in the reconciliation between the Free and the SSE, also taking shape through a project like “Plateformes en Communs”, aiming to create a coalition of actors that recognize themselves in both Platform Cooperativism and the Commons. There has to be a way to make these reconciliations stronger, and lead to a clarification of the contradictions still affecting Free Software.

Make no mistake: I am not saying that players like Facebook or Google should not pay to participate in the development of free projects. But unlike Katherine Maher, I think that this should not be done on a voluntary basis, because these donations will only reinforce the power of the large centralized platforms by hastening the transformation of the digital Commons into “Capital Commons”. If Google and Facebook are to pay, they must be obliged to do so, just as industrial capitalists have come to be obliged to contribute to the financing of the social state through compulsory contributions. This model must be reinvented today, and we could imagine states – or better still the European Union – subjecting major platforms to taxation in order to finance a social right to the contribution open to individuals. It would be a step towards this “society of contribution” Framasoft calls for, by giving itself the means to create one beyond surveillance capitalism, which otherwise knows full well how to submit the Commons to its own logic and neutralize their emancipatory potential.

Photo by Elf-8

The post Are the Digital Commons condemned to become “Capital Commons”? appeared first on P2P Foundation.

First, we need to go back in time more than a hundred years.

History of steward-ownership

Steward-ownership is relatively new as a term, but the underlying concept is almost as old as limited liability corporations, the structure adopted by most modern companies. The original steward-ownership model was invented by Ernst Abbe, co-owner of the successful German optics manufacturing company ZEISS, founded in 1846. Abbe had worked as a professor at the university of the city of Jena, where he invented the technology behind ZEISS’s success. This likely led him to the insight that the value and the profits created by ZEISS did not belong just to him, but to everyone working at the company and society at large.

After the company’s founder Carl Zeiss died in 1888, Abbe created the Carl Zeiss foundation, which has owned ZEISS ever since. The foundation ensures that the company cannot be sold and profits are either reinvested or donated to the common good. Abbe then introduced several important rights for the workers, amongst them a health and pension insurance for the workers and an 8-hour workday. He also instituted a principle that the highest salary of any ZEISS employee cannot be higher than 12 times the lowest salary a worker gets after being at the company for two years.

Today, more than hundred years later, ZEISS is thriving. Its business consists of manufacturing optical systems, industrial measurements, and medical devices. Its annual revenue exceeds 5 billion euros and annual profits 600 million euros. Charitable donations from ZEISS are an important source of funding for the university of Jena, where its technology was originally created.

Since then, several other major companies have adopted similar structures. The most well-known ones include German engineering and electronics company Bosch (revenue 78 billion euros and profit 5.3 billion euros in 2017) and British department store chain John Lewis (revenue 2015 11 billion pounds and profits more than 400 million pounds).

Professor Steen Thomsen, the chairman of the Center for Corporate Governance at Copenhagen Business School (CBS), has studied companies with comparable ownership structures extensively. His research shows that such companies:

1. Are more profitable than other companies in the medium term
2. Live longer — survival probability is 600% higher after 40 years
3. Are trusted more by their customers
4. Offer their employees better pay
5. Have better employee retention

In addition to all this, these companies typically generate many kinds of societal benefits that extend beyond their owners and customers. Charitable donations by ZEISS are a great example of this. Bosch, meanwhile, has been a pioneer in investing in environmentally friendly technology.

The term “steward-ownership” was coined by Purpose Network, a German organization that is researching this model, developing it further, and helping organizations transform into it. The team behind the organization also operates an impact fund called Purpose Ventures, which invests exclusively in steward-owned companies. Purpose Network works for a paradigm shift in the economy, with the goal of transforming it from profit maximization to purpose maximisation.

Based on the research Purpose Network has conducted, the following two key principles apply to all steward-owned companies.

Principle 1: Profits are a means to an end

Traditionally, a for-profit company exists to maximize returns for its shareholders. In many national legislations, it is stated that unless changed in the bylaws of the company, shareholder profit should be the north star guiding the decisions of its management.

For steward-owned companies, profits are a means to an end, not an end in themselves. In most legislations, it’s possible to make this official by changing the company’s purpose in its official articles of association. After this change, if the company’s management sees a way to increase its profits that is in conflict with the purpose of the company, it is no longer bound to choose profits over purpose.

Sharetribe’s new articles of association (which you can download from the “Documents” section of our equity crowdfunding campaign page) state the following: “The purpose of the company is to democratize the sharing economy. The company aims to foster an economy where resources are utilized efficiently, created value is distributed fairly, and people have control over the conditions of their work.”

What practical implications does this change have? Let’s take a concrete example. Based on a thorough analysis of the market situation of online marketplace technology, Sharetribe’s management might come to the conclusion that if the company focuses its efforts solely on building steeply priced proprietary marketplace technology that helps big organizations create marketplaces where retailers can sell their products to consumers more efficiently, it could increase its profits significantly. This approach would be in conflict with the company’s purpose in several ways. First of all, if our technology is accessible only to wealthy people or big organizations, we’re not moving towards our purpose of democratizing the sharing economy. Second, the company would be contributing to the increased consumption of new goods instead of decreasing it, which would be in conflict with the goal of more efficient utilization of resources. Thus, in such a situation, management would be incentivized to choose a business focus more aligned with the company’s purpose and ethics.

It should be noted that a company’s purpose is something that should be able to evolve. For instance, ten years from now, the term “sharing economy” might no longer be used. Because of this, steward-ownership allows the company to make changes to its official purpose statement. At Sharetribe, such a change can be made if people holding two-thirds of the company’s shares agree with it.

This raises the question whether a steward-owned company could initially be purpose-driven but later change its ways by redefining its purpose to profit maximization. And even if its purpose is not officially changed, these types of definitions are relatively fuzzy — they alone are not enough to guarantee that the company doesn’t end up creating an incentive structure that focuses on profits if free profit distribution to shareholders is allowed. To remedy these issues, steward-owned companies often cap the returns they offer to shareholders. We’ll return to this aspect a bit later. First, let’s examine the second principle of steward-ownership.

Principle 2: Ownership equals entrepreneurship

The second principle of steward-ownership states that the company should be in control of people who hold active roles in it. Sometimes steward-ownership is also referred to as “self-ownership”: steward-owned companies are ultimately governed by the people working in them. This guarantees that the decisions conducted by the management of the company will be in the best interest of its employees and all other stakeholders.

Typically, this principle is achieved by restricting the ownership of shares with voting rights so that these can only be held by people who have an active role in the organization. As an example, at Sharetribe, we have several different share classes. Only A-shares and B-shares have voting rights, while only C-shares and D-shares have profit sharing rights. Our articles of association contain the following statements:

“Any acquisition of the company’s A, B or D Shares shall require a prior consent of the board except in a situation where D Shares are acquired by an existing holder of D Shares. As to A Shares, the consent can be given only to a person who is either in employment or in a service relationship with the company or one of its affiliates.”

In practice, this statement prevents the company from being sold to an outside buyer since such a buyer cannot achieve decision-making power in the company. It also means a steward-owned company cannot be taken public in a traditional way. If a person holding voting shares decides to quit active participation in the company, they need to give up their voting shares for a nominal cost (in our case, it’s one cent per share as Finnish legislation doesn’t allow share redemption without payment).

Steward-ownership doesn’t prescribe how the voting shares should be distributed among the team members. Currently, all of the members of our team hold some voting shares or options for them, but me and my co-founder Antti still hold the majority. The topic of how a steward-owned company should be governed is an interesting one. It’s beyond the scope of this post, but we hope to return to it later.

Reliable returns to investors: Redeemable shares

Like a traditionally structured company, a steward-owned company might also encounter a situation where its business would benefit from an outside investment. This means that it needs to be able to offer attractive return prospects to its investors.

In the world of technology startups, the most common source of funding is venture capital. VC firms typically expect their returns to come via a company sale or an IPO. They make high-risk investments and typically expect that one out of every ten companies they invest in will be able to generate enough returns to justify all the other nine investments (which end up returning nothing). In his excellent article, venture capitalist Homan Yuen explains why a venture firm investing $1M in a startup valued $10 million needs to believe the company has the potential to produce an exit with a valuation of $1B-$2B within the lifetime of the fund (typically 10 years) to justify its investment. This explains why venture capitalists are so obsessed with “unicorns” (startups that exceed $1B in valuation).

While steward-owned companies can’t generate such returns to their investors (as they won’t sell or go public), this doesn’t mean they can’t be attractive investment targets if the investment instruments are structured in a different way. After all, as Yuen notes, venture capital funds’ target returns to their investors (“limited partners”) that are typically between 2x and 4x in ten years, which translates to 6–15% per annum. The only reason VC funds have such high return expectations per company is the high failure rate of VC-funded companies.

As experienced impact investor Aner Ben-Ami of Candide Group points out, venture capital should have never become the default way of funding companies. It definitely has its place in building truly disruptive, capital-intensive businesses — if you’re building rockets or electric cars, for instance — but for many businesses, striving to become a unicorn can be detrimental: the increased burn rate causes the company to rapidly run out of cash before finding a sustainable business model.

What’s more, Ben-Ami notes that the traditional VC model is not even that great for the venture capitalists themselves:

“In general, only the elite ‘top quartile’ venture funds have generated what is often referred to as “venture returns” for their investors. Unicorn hunting is a tough business!”

Perhaps companies, investors, and society at large would be better off if, instead of focusing so much of their energy on the small group of potential unicorns, more investors would fund a large amount of profitable, medium-sized businesses that can become profitable early on. This is the investment thesis of Indie.vc, a US-based venture fund started by experienced venture capitalist Bryce Roberts. On their homepage, they state:

“At Indie.vc, we believe that companies with a focus on making a product customers love and selling it at a profit from the very beginning have a distinct long-term advantage over those who don’t. We’ll trade slower, thoughtful, compounding growth over scaling fast and failing fast every time.”

Such a focus also requires a new kind of funding instrument. Indie.vc, Candide Group, Purpose Ventures, and other pioneering investors have started investing with instruments based on profit-sharing instead of focusing on an exit.

Imagine a fund that still invests in ten companies and expects a return of 3x over a period of ten years. Instead of asking these companies to exit, it could require them to buy back its shares at a 5x price over that same period. This requires a much larger portion of these companies to succeed in generating the desired return (six out of ten), but on the other hand, they can do so without selling the company and their growth doesn’t need to be enormous. Ben-Ami presents a concrete scenario where the company has annual revenue of $1M and is not yet profitable at the time of the investment. After seven years, the company is generating $10M in revenue with an EBITDA of $1.5M. That sounds like a reasonable estimate. Ben-Ami’s calculations show that such growth — which would never attract a traditional venture capitalist — would be enough to provide investors with returns comparable to those of venture capital funds.

For Sharetribe, a profit-sharing model is a natural fit. In our current funding round, we offer investors redeemable shares for the price of 20 euros per piece. In the shareholder agreement, it is stated that our company uses 40% of its annual profits to redeem back these shares for 100 euros apiece until they have been fully redeemed. Our model has been inspired by a debt vehicle called Demand Dividends, which was designed to create reliable returns in impact investing, but our model uses redeemable shares instead of debt royalties.

In our projections, we expect faster growth than in Ben-Ami’s scenario — while the target we agreed upon with our investors is ten years, we hope to be able to redeem all the investors’ shares within six to seven years. If these projections fail, Ben-Ami’s calculations show how even a relatively modest annual growth would be enough to provide a sufficient return in the target timeline.

If we don’t meet the 10-year target, we would need to either redeem back the remaining shares immediately from our free cash flow, figure out a refinancing option, or continue using 100% of our EBITDA in the following years for redemptions until all investor shares are bought back. This condition ensures that it is also in the best interest of the company to redeem all the shares on time.

In our specific model, there’s an aspect that gives the management of the company a personal financial incentive to ensure the investors will get their shares redeemed: there will be a “delayed compensation” waiting for them once the investor shares have been redeemed in full.

Rewarding founders and early employees: Delayed compensation

Starting a technology company is a risky business. It often involves at least some level of personal financial risk from the founders and early employees. Our situation is not an exception. Sharetribe was founded in October 2011, and during the early years of the company, we worked for a relatively low salary (during some periods even without any salary) to get the fledgling business going. Similarly, the first team members to join typically accepted a salary lower than their market rate. To compensate for this, they received stock options that would entitle them to a financial reward in case of a liquidity event in the form of a company sale or an IPO.

Our transition to steward-ownership removes the possibility of such a liquidity event. Thus, we needed to come up with an alternative way to reward the team for their early financial risk. Such incentive structures are important if we want more people to start steward-owned companies and join them. The steward-ownership model didn’t have a standardized way of structuring delayed compensation, so we decided to design our own.

We opted to create one more class of redeemable shares. In our transition, the earlier shares held by founders and early team members were split in two: each old share became one A-share and nine D-shares. A-shares have voting rights but no rights to profit-sharing. D-shares don’t have voting rights, but they have a similar right to a redemption as investor shares. The redemption schedule of D-shares is designed in a way that most of their redemptions will happen only once the C-shares (the shares of the investors) have been redeemed in full.

What, then, is a fair compensation for the early risk? We calculated this by assuming a situation where, instead of founding the company, we would have taken day jobs with the average market rate salary for people with our specific degree. We then calculated how much extra income we would have earned this way compared to our earnings during our time at the company, and used this calculation to give our original investment a monetary value. To this sum, we then applied the same average annual interest rate as what our investors would get in a scenario where all their shares are redeemed. We arrived at roughly 1.9 million euros (before taxes) per founder. A similar calculation was then applied to each team member, but in a way that the compensation each team member would get would be in proportion to the number of shares or options they were holding. We then had conversations with the entire team to calibrate these calculations and figure out a fair level of delayed compensation for everyone.

Beyond the share redemptions, the only other financial compensation team members (including founders) can receive is a salary, which cannot exceed market rates. Sharetribe will never pay dividends as our articles of association prevent that for A and B shares (and holders of C and D shares get their returns via share redemptions). This guarantees that once all the C and D shares have been redeemed, 100% of the company’s profits will be used either to develop the company further or other activities aligned with its purpose, like charitable donations or investments in other steward-owned companies.

After this final piece of the puzzle, all the components of Sharetribe’s steward-ownership structure were in place. There was just one more thing: how can we prevent the management of the company from changing the structure later on?

Safeguarding the structure: Foundation and veto shares

When a company transitions into a steward-ownership structure, it’s important that the transition is permanent. This way, it can give a binding promise to all its stakeholders — employees, customers, investors, and society at large — that it won’t change its ways later on and revert back to profit-maximization, even if there’s a change in the company’s management.

Since ZEISS, steward-owned companies have used foundations to safeguard their structures. The great thing about a foundation is that it can be assigned rules that its board must obey, no matter what their personal preferences.

Creating a new foundation is, of course, expensive and requires quite a lot of work; it wouldn’t make sense for every startup to create their own. Luckily, there’s no need for that: Purpose Network has created a foundation that any steward-owned company can use. The Purpose Foundation is dedicated to helping companies stay independent and mission driven for the long-term through steward-ownership.

In our case, we created one more share class (B-shares) and issued exactly one of these shares, which was then given to the Purpose Foundation. This veto share can only be used to veto any change in the company’s articles of association that would attempt to dismantle the steward-ownership structure. The foundation is bound by its rules to veto any such change, and whoever is on the board of the foundation must respect these unchangeable rules.

In a nutshell: from now on, Sharetribe will always remain a steward-owned company.

Summary: The best of capitalism

Steward-ownership is not only reserved for “impact companies” trying to cure diseases, build technology for renewable energy, or tackling poverty. The model can be applied to any company that is building useful products, like the examples of Bosch, John Lewis and ZEISS show. The purpose of the structure is simply to make sure that our companies are in service of society, not the other way around. If the management of a steward-owned company comes to the conclusion that the company’s net impact is no longer positive due to its negative externalities, the management is incentivized to change the company’s ways.

To me, steward-ownership is a way for our society to get all the benefits of capitalism and free markets while remedying their negative effects. A decentralized market economy is an extremely efficient solution to allocating scarce resources when compared to alternative solutions like central planning. Entrepreneurship is a great way to increase the standard of living of everyone, and capitalism offers good incentives for both entrepreneurs and investors. This system has brought us enormous wealth and prosperity and lifted large amounts of people out of poverty. However, it has also brought enormous inequality and a myriad of environmental problems with it. Steward-ownership is a great example of how, with a few simple changes in how companies are structured and governed, we can get the benefits of capitalism without its downsides. To use Silicon Valley terminology, steward-ownership is capitalism 2.0.

For Sharetribe, there’s another reason why the steward-ownership model is a perfect fit. The goal of our company is to do to the sharing economy what steward-ownership does to capitalism: restructure it in order to get its benefits without the downsides. In the next post, I’m going to discuss how exactly that will happen.

***

If you’re inspired by this story, it is now possible to join us on our journey! We have just launched an equity crowdfunding campaign that is unlike any other crowdfunding round seen before due to our steward-ownership structure. It’s now possible for anyone from around the world to invest in Sharetribe and own shares in our company, for amounts starting from 500 euros. Check out the campaign here.

A mandatory regulatory disclaimer: investments in unlisted companies like Sharetribe always carry a risk of losing capital. Invest responsibly. Because of financial regulations, certain restrictions in terms of who can invest apply to residents of the following countries: United States, Canada, Australia, Hong Kong, Singapore, Japan, New Zealand, and South Africa. You will find more information about this on the investment platform.

The post Steward-ownership is capitalism 2.0 appeared first on P2P Foundation.

In some cases, it can pretty objectively be argued that a company is really making something the world needs; if they’re innovating on renewable energy or a cure for a terminal illness, for instance.

In most situations, assessing whether the company has a net positive impact on society is nonetheless difficult. Some devout defenders of entrepreneurship might argue that any company that creates jobs is already making the world better by default, even if the impact of the company’s products is neutral. This view can, however, be challenged, especially if the employees of the company consist mostly of “scarce resources” like programmers or designers, who are high in demand. Opportunity cost needs to be taken into account.

The Upright Project, a company that measures the net impact of companies, argues that if a company mainly employs people from this group of “scarce resources”, its impact is, by default, negative: if this particular company wouldn’t exist, these people would immediately find jobs elsewhere in companies that might produce something more valuable. In other words: if a company is taking these scarce resources off the job market, it better do something useful with them.

Companies that reach profitability are, of course, providing value to certain stakeholders: their customers, employees and shareholders — and to society in the form of taxes. However, if this value is created by burning fossil fuels or convincing people to smoke cigarettes or buy more things they don’t need, it can be argued that the net value is negative.

I’ve been a tech entrepreneur for almost 7 years. What drives me to startups and for-profit entrepreneurship is the scalability of my impact. If I was a doctor or a teacher, my work would certainly have a high positive impact, but it would only benefit a small group of people. If I build a company that manages to develop a cure for a common disease or create educational technology that helps millions of kids in developing countries learn to read, the impact of my work touches a vastly larger group of people even though the amount of hours I put in is the same. That’s powerful.

During all these years, I’ve struggled when trying to figure out how to make sure that our business — or any business — is truly serving society, not taking more than it’s giving. I’ve come to the conclusion that the answer lies in how the company is structured, and what kinds of incentives it offers its management.

Why being “mission-driven” is not enough

Many modern technology companies are created by teams of young, idealistic founders who truly want to make the world a better place. Their business ideas are often born from a genuine desire to fix a certain societal problem. In an ideal scenario, they can align their purpose and their profits: every dollar they make also advances their cause. Think of a company that produces solar panels or makes an app to buy food that would otherwise go to waste. On the surface, this sounds like a perfect equation: as the company’s business scales, so does its positive impact.

Unfortunately, this genuine willingness to be mission-driven is not enough. The world is complicated. What sounds like a business model that generates a purely positive impact can have surprising negative side effects. As the company grows bigger, it might need to venture into business areas that are no longer aligned with its original mission in order to sustain growth.

If a company is structured in a traditional way, it still needs to ultimately listen to the demands of its stockholders. If the stockholders are primarily interested in maximizing their profits — and this is often the case for any company that is public or has sold more than 50% of its equity to venture capitalists — the company’s management is incentivized to put its social mission on the backburner and focus on profits and growth instead.

Let’s take a few examples to illustrate this problem. My work is in the field of the sharing economy and peer-to-peer marketplaces, so I’m choosing my examples from this industry. I’m picking three companies that seem to have genuinely mission-driven founders who have always heavily emphasized the social impact side of their business: Airbnb, Lyft, and Etsy.

Airbnb

Airbnb is a pioneer of the so-called sharing economy. Their claim has been that we have lots of underutilized space that should be put to better use. If people use the extra space in their homes to turn them into hotels, we will need less new hotels, and the space for hotels can be used for something else.

It sounds great on paper. Unfortunately, reality isn’t quite so straightforward. The hotel industry is seeing more profits than ever. My theory is that instead of decreasing the demand for hotels, Airbnb has simply expanded tourism — because of more affordable places to stay, more people choose to travel. This also means a lot more flights, and with them a lot more emissions. And Airbnb doesn’t even want to disrupt hotels anymore; it just announced that it is now offering its platform to hotels as well, helping them find more guests.

But doesn’t it still mean that Airbnb increases the utilization of existing spaces? Not necessarily. According to some studies, 40% of Airbnb’s revenues come from professional landlords. They have turned the apartments they own, formerly available for permanent rental, into vacation rental homes. This means there are fewer apartments available for people living in a city, all the while vacation rental apartments are empty half of the time during the off-season. Because of this, rental prices have gone up in some cities, pushing less well-off people into the suburbs.

This is, of course, not what the founders originally intended; it’s simply a side effect of their business model — something economists call an “externality”. But there’s no denying that it’s an important factor when considering whether Airbnb’s impact on society is net positive.

Lyft

For a long time, the Lyft founders have been working towards a noble goal: reducing congestion and car ownership. On the surface, it sounds that Lyft’s business model is doing just that. Who wants to own a car in a city when I can summon a personal driver in a matter of minutes, for a relatively affordable cost? Lyft’s main competitor, Uber, has the same effect, but it’s been Lyft that has made its claim to fame by focusing on this positive aspect of its business model.

However, like Airbnb, Lyft is also causing externalities it probably didn’t expect. Several recent studies show that Uber and Lyft actually increase congestion in cities. Because of their affordability and convenience, they often convert people from biking, walking and public transport. Meanwhile, between rides, Uber and Lyft drivers spend on average 50% of their time alone in their cars, adding to the problem of congestion.

Etsy

Etsy was born as a statement against the world of mass-produced goods, best represented by Amazon. Etsy wanted to get more people to buy hand-crafted goods while providing an income to micro-entrepreneur crafters.

Etsy went further than Airbnb and Lyft to emphasize its position as a company that puts its mission before its profits. It acquired a B Corp certificate, which obliged it to submit annual proof that it meets rigorous standards of social and environmental performance, accountability, and transparency. In a speech to his employees, Etsy CEO Chad Dickerson read the Milton Friedman quote about profit maximization as a sole responsibility of a business, and said: “You’re all free to hiss”. Then he hissed himself, showing his distaste for Friedman’s thinking.

Similarly to Airbnb and Lyft, Etsy decided to raise lots of venture capital to accelerate its growth. Eventually, this meant that Etsy needed to offer investors a way to liquidate their investments, which meant going public in 2015.

In 2017, a hedge fund called Black-and-White Capital saw an opportunity to make profit. It started buying Etsy stock, after which it launched an activist campaign, accusing the company of careless spending and demanding that Dickerson be ousted as a CEO. The company’s board proceeded to fire Dickerson, along with 8% of the company’s staff.

Friedman 1 — Dickerson 0.

Etsy used to have a “Values-Aligned Business” team, which oversaw the company’s social and environmental efforts. The new CEO Josh Silverman dismantled this team. Etsy also gave up its B Corp certificate. Even before going public, it had started allowing the sales of manufactured goods on its platform.

These moves have been applauded by Etsy stockholders: it has tripled its share price within the past year. But Etsy is no longer the same company it used to be.

The ultimate solution: remove the incentive to maximize profits

An attentive reader might have noticed a pattern in the three stories above. All three companies had a clear way to tackle the negative externalities caused by their business models. Airbnb could ban professional landlords and only allow people to rent out the places they themselves live in and their second homes. Lyft could make its services less attractive during peak hours by volunteering to pay a congestion tax that would increase its prices. Etsy could reinstate the B Corp certificate, ban manufactured goods, and monitor the origin of goods sold through its platform more carefully.

In reality, these companies are not in a position to do so because of their company structure. They can’t escape Friedman. The main incentive for their management is to grow the business and maximize shareholder profit. All the proposed solutions are in conflict with this goal as they could have a significant negative impact on revenue and growth for these companies. And that’s why we most likely won’t see them happen.

Their structure. Their incentives. Perhaps therein lies the answer to the original challenge: how to build companies that are a force for good in society.

One can’t argue with Friedman since he is simply stating the facts: this is how companies are structured, and this is what their duty is. But what if we change the structure and duty?

In her excellent 2017 book Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist, economist Kate Raworth explains that we need to build an economy that lifts people out of poverty and brings them well-being while respecting the natural ceiling for growth caused by the limited resources of our planet. She believes that in order to achieve this, we need to make fundamental changes to our society and to our organizations. She writes:

“The most profound act of corporate responsibility for any company today is to rewrite its corporate bylaws or articles of association in order to redefine itself with a living purpose rooted in regenerative and distributive design and then to live and work by it.”

The key insight here is that we don’t need to create companies that maximize profits at all costs. In their articles of association, we can write that their profits are only a means to pursue their social mission, not an end goal in themselves. In some cases, this means that the company might make decisions that deliberately decrease its profits or slow its growth if its management feels that it is the right to do, all things considered.

Such company structures can be created without changing our current legislation, and some pioneering tech startups are already adopting these structures. Kickstarter, the world’s largest crowdfunding platform, paved the way in 2015 by reincorporating as a public benefit corporation, and stating it will never sell or go public. By remaining independent from the control of outside stockholders, it can be sure that its management is forever incentivised to put its mission first.

Putting our money where our mouth is

Our company, Sharetribe, helps entrepreneurs and organizations create their own peer-to-peer marketplace platforms. With our technology, you can essentially create something like Airbnb, Lyft, or Etsy. Like these three companies, we also have a social mission. In our case, it is to democratize the sharing economy by making platform technology accessible to anyone. We truly admire these three companies and the tremendous technological and cultural innovations they’ve made. However, we’re also worried about the negative consequences of their pursuit of even higher growth. Our thinking is that if we make their innovations available to local platforms operated by small businesses, social enterprises, co-operatives, non-profits or even cities, we can reap the benefits of the sharing economy without causing many of the downsides.

When our founders travelled the world telling people about this mission, many asked whether there was a risk that we would become another profit-maximizing platform giant ourselves. What if we started generating unintended negative externalities as well, and our shareholders wouldn’t allow us to do anything about them? At the time, we didn’t have a good answer. After all, we’ve had a traditional startup structure, and we’ve recognized that if we raised any more money with that structure, the final decision would no longer be in our hands. Even if we decided not to raise money, there was no way for us to make a binding commitment to our stakeholders that we wouldn’t do so in the future.

This made us worried and frustrated.

Finally, we decided to do something about it. A few weeks ago, the Finnish Trade Registry approved our new articles of association that officially transition our company into a structure called steward-ownership. We are the first company in Finland and one of the first tech startups in the world to do so. Steward-ownership is a company structure designed to ensure that our company’s profits are purely a means to pursue its mission, and forever removes any personal financial incentive of profit maximization from the company’s management. Unlike B Corp certificates, the steward-ownership structure is protected with a foundation structure and can never be dismantled once introduced.

From now on, it’s in the best interest of our management to put our social mission first, even if that means slowing down our growth. Everyone working in the company is incentivized, first and foremost, to make decisions that benefit not just the owners of the company, but all other stakeholders, the environment, and society at large. After this change, we can finally — confidently — say that our company will always be a force for good in society.

How does our steward-ownership model work in practice? That is the topic of another post.

***

If you’re inspired by this story, it is now possible to join us on our journey! We have just launched an equity crowdfunding campaign that is unlike any other crowdfunding round seen before due to our new structure. It’s now possible for anyone from around the world to invest in Sharetribe and own shares in our company, for amounts starting from 500 euros. Check out the campaign here.

A mandatory regulatory disclaimer: remember that investments in unlisted companies like Sharetribe always carry a risk of losing capital. Invest responsibly. Because of financial regulations, certain restrictions in terms of who can invest apply to residents of the following countries: United States, Canada, Australia, Hong Kong, Singapore, Japan, New Zealand, and South Africa. You will find more information about this on the investment platform.

This post was originally published in Better sharing
Photo by Volkan Olmez on Unsplash

The post How to build companies that are a force for good in society appeared first on P2P Foundation.

Ruby Irene Pratka: Call it “An Inconvenient Truth” for the market economy. In “The Third Industrial Revolution,” American economic and social theorist, business school professor, and policy adviser Jeremy Rifkin lays out a bleak vision of a near-future world devastated by climate change, mass extinctions, slow economic growth, and rising levels of extremism and inequality. “This is no longer imminent; it’s at the door and in the house,” Rifkin says, giving a lecture to an audience of several dozen people at an undisclosed location in Brooklyn, New York, before launching into a Q&A session. “If it were fully explained, our human family would be terrified.”

Over the course of the filmed lecture, Rifkin charts a course out of the quagmire. For Rifkin, creating a more sustainable world within the next two generations is necessary for humankind’s continued survival. This sustainable world, he says, will depend on increasing interconnectedness between people, places, and objects. Youth engagement, the Internet of things, renewable energy, and the sharing economy will play pivotal roles. Together, they will create a network of data hubs in buildings and vehicles, powered by renewable energy, generating data that can be mined by app developers to create useful, shared tools. The end result, Rifkin says, will be a “distributed nervous system that will allow everyone on the planet at low cost to engage directly with each other.”

This model “works best when it’s collaborative and open, and more and more people join the network and contribute our talent,” he says, referring to already-existing examples of open-source knowledge-sharing networks, such as Wikipedia and Massive Open Online Courses. Widening the network would open the door for a “vast, vast expansion of social entrepreneurialism,” he says. “You already spend part of your day in the market economy, and part of it in the sharing economy with car sharing and Wikipedia.” The sharing economy, he says, “as murky as it is now, is the first real new economic system since capitalism and socialism… I don’t think capitalism will disappear, but it will find value by developing a relationship with the sharing economy.”

He posits that the shift in perspective created by the sharing economy — from a focus on owning property to a focus on accessing goods, services, and experiences — will lead to a renewed awareness of the interconnectedness of everything on Earth, and a more sustained response to the troubles the planet is facing.

“We have one generation to lay down biosphere consciousness,” Rifkin says. “No other generation has had this weight, one generation called upon to save the species. We need to join together in the virtual and physical world to make this happen.”

Fittingly, the feature-length documentary itself, distributed by Vice Media, has been made available for free on YouTube. Watch it here.

Header image is a screenshot from the film

The post ‘The Third Industrial Revolution’ explores how sharing creates a sustainable world appeared first on P2P Foundation.

Download the paper here: Sharing Cities for Urban Transformation: Narrative, Policy and Practice

Photo by phedot

The post Sharing Cities for Urban Transformation: Narrative, Policy and Practice appeared first on P2P Foundation.