What is a Modular Company ?
A MC is a fairly loose collection of individuals and possibly other corporations that collaborate on a variety of projects. Projects are usually commercial, initially the accent will be on 'online' businesses and usually have a number of elements in common:
- there is no formal 'office'
- most collaboration takes place online
- work is distributed in a fine-grained manner
- there is a 'market' for tasks that need doing
- during the development phase the work is done for 'stakes' rather than for actual money, but once cash is generated the stakeholder relationship will be used to determine payout, there is a fluid transition between developement and operations.
- the 'currently active' cast of the modular company can (and usually does) change over time
- Projects are usually of a commercial nature (in contrast with for instance open source development)
- Nobody is the 'boss', there is a large sense of consensus and freedom.
- The administration is completely transparent to all project contributors
Modular Companies vs INC, BV, GMBH, LLC
When compared with more traditional corporate models the MC has a number of advantages.
- Normally when a number of individuals decides that they want to collaborate on a project they will each lay out an initial sum of money that they use to buy shares with, and they make an agreement on who will do what. This nails down the various relationships right from day one, whereas in practice it is often desireable to keep the relationship fluid to be able to accommodate changes in circumstances or plans.
- If there is a conflict in a traditional corporation it usually ends in front of a judge, in a modular company any change of stakeholdership is usually limited in scope so a conflict will be easier to resolve in an amicable way.
- Traditional corporate structures have formal governance rules, a MC will have a more merits based and democratic leadership.
- In case of non-performance in a traditional corporation it is very difficult to remedy the situation, usually corporations that contain subversive elements severely suffer from this. In a MC context a non-performing member will find themselves marginalized over time by the continued performance of the other members.
Why take part in a Modular Company
A Modular Company project allows you to contribute risk free to a collaborative effort with a minimum of responsibility and a maximum reward potential. Basically the only thing at risk is your reputation within the Modular Company. You don't need to cancel your day job, mortgage your house or sell your kids.
Earning a living
Most career related decisions in life are a balance between risk and opportunity, and the Modular Company is no exception to this. To reduce the entry barrier we have spent a lot of time concentrating on how to make it easy to make the step from being employed to being self employed without any 'critical' decision points. This absence of make-or-break decisions make it possible to start piecemeal on contributing to MCP's and slowly wean yourself from a paycheck or other source of income. If at some future point in time you find yourself the recipient of recurring income from MCP's you can always decide that you've seen enough of your boss." (http://themodularcompany.com/content/background+and+primer.html)
- Kostakis, V. (2019). How to Reap the Benefits of the “Digital Revolution”? Modularity and the Commons. Halduskultuur: The Estonian Journal of Administrative Culture and Digital Governance, 20 (1): 4-19. URL = http://halduskultuur.eu/journal/index.php/HKAC/article/view/228/177