Open Company Models

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Foo Associates model

Proposed by Monty at http://zak.greant.com/hacking-business-models/

Purpose

Create a sustainable business model that can be adopted and adapted by others.

Create a fair and democratic company that is owned by the workers.

Have long-term, trustworthy and meaningful relationships with our staff and customers.


Principles

Egalitarian: The belief that all people should be treated equally. This includes equality, non-discrimination and inclusivity.

Sustainable: We have a long-term view on our business. We watch our profits & spend wisely, we take care of each other, we support the things we depend on.

Transparent: We communicate in an honest and genuine way. Any information or process that can be made open, will be made open.

Fun: Create a workplace where people can have fun and want to work.

Agile: Be flexible, receptive & adaptive, especially when dealing with staff and customers.


Methods

Concrete tools for helping us live according to our principles, including:

Consensus-based decision making.

Corporate transparency - any information or process that can be made open, should be made open.

Licensing that helps benefit our company, our staff, our customers, our partners and society at large.

Profit-sharing with staff, contributors and worthy causes.

Don’t try to change people. Focus on getting the best from their strengths. Develop ways to work around their weaknesses. Prefer to work with people who share our values.

Work against patents and other legislation that harms individual rights.


Monty’s amendments

  • Subscribe to the Open Source philosophy and support the Open Source community.
  • Be a virtual company, networking with others.
  • The company or its individual business units should not grow until they are

unmanagable by the chosen methods. If this happens, then the company needs to be split up or re-organized into largely independent business units.

Default Employee Rules

Some employee roles may have different requirements - for example, someone working on customer support may need to have regular hours. Of course, any differences need to be noted explicitly in the employees contract in a section that clearly details any differences from the standard agreement.

- The Employee works in distributed company and may work from anywhere.

- 75 working hours per two weeks. Ideally, employees should work schedules that are kind to them and to others.

- Equal free (vacation) time; Everyone has 35 free days a year + Saturday & Sundays. (This is basicly Finnish 5 week vacation + 10 (avg) weekday holidays). Note that this means that one should use a free day if one wants not work any Monday-Friday even if it’s a public holiday in your country!

Up to 25 free days will roll over to next year (ie, the vacation part not the public holiday part); If the employee quits or is let go all saved vacation money will be paid out. One earns 25/47 vacation days / week of active work (This is used for the first and last year of employment).

- Vacation money (”Lomalta paluu raha”). When you go on vacation that is more than 3 weeks (or have used more than 3 weeks of your vacation for the year) you get an extra 1/2 month of salary. If you don’t keep your vacation the vacation money is payed at the end of the year under ‘get a life’ bonus plan.

- The employee will get a shared copyright to all code and documentation he/she produces according to the spirit of the Sun’s JCA license agreement.

- 80 / 20 rule

80 % of the time the employee should work on scheduled task, 20 % he/she can work on any task of his/her choice, as long a it’s will generate revenue makes employees more efficent or enhances company recognition in a 2 year window. The 20% tasks needs to be approved to ensure it follows the above guidelines.

- 2000 Euro hardware allowance at start of position (for laptop, desktop etc).

- 1000 Euro/year hardware allowance for everyone that require new hardware to be be able to do their work.

- The equipment bought with the hardware allowances (and any other negotiated equipment) will be transfered to the employee after 5 years.

- The salary should be competitive in the area where the employee is located. The bonus plan is not depending on where employee is living.

- If an employee has been of significant help in getting and delivering in a customer order he is entitled to a bonus for this work. Everyone in doing the sales will share 5% in the ‘price - cost of sales’ part of the sale (in proportion of their involvement) and everyone part of the delivery will share another 5%. This payed bonus will however be deducted from their part of the end of year bonus (if the company was profitable).

- Each employee will be assigned a VIP number of 1-5 (5 highest) to describe his importance for the company. This number is used to calculate the end of year bonuses and ’sell-shares’. The VIP number will be adjusted each year as part of a employee review.

VIP Number discussion

? Who sets the VIP number?

? How does the VIP number change over time?

? How do we stop people from feeling bad about their VIP number?

- The employee must be able to communicate fluently in English (at least in written form). If necessary company will sponsor English classes for employees that wants to learn speak better English.

- The employee is assumed to be cost efficient. This means he/she should prefer to use:

- Cost efficient communication tools like Skype and VOIP. - Economy travelling tickets. - Medium priced hotels, rented cars and restaurants. - When travelling he should strive to stay over at his fellow employees places and/or share rooms with his fellow employees. (This item can be override with a ‘good cause’ by his manager) - If the employee wants better hotel, food, travelling arrangements, working equipment etc this can be arranged, but the difference should be reduced from his salary, contract money or bonus.

- When hired, the employee will during the 3 first months be ‘on trial’ basis. After the trial period the Company and the employee will decide if things seams to work out and either hire the employee or contract him under similar terms as if he would be employed.

- If people are not working up to expectations they will first get warned about this. If they don’t correct this within one Month they will be moved to ‘on trial basis’. After 3 months the Company and the Employee will have a discussion of how things are going and decide if it’s better that the Employee leaves the company with immediate effect.

- When employee is leaving he can buy out any Company equipment bought under the hardware allowance. The price is min(market-price, ‘initial-price’ * max(5 - years_old,0)/5) (Ie, the price of the equipment is reduced by 1/5 each year)


The Rules of the company:

- The Company is created to generate bonus for the employees (not to get sold).

- The Company should make it as fun as possible to work for the Company.

- The Company will be a distributed entity and strive to be small and efficient. If growing too big it will split into several business units or companies.

- Strive for long relationships with employees and customers. (The Company is a family)

- The Company needs to respect the individuality of it’s employees. If the employee has reasonable ‘extra’ demands they need to be seriously considered. (For example when it comes to work on weekends, room sharing, not want to travel etc).

- The Company will employee people based on their merits. They will not be discriminated based on their gender, race, religion, location, married status or who they have married.

- The Company will not require people to work on weekends. Company has the right to ask the employee for working on weekends, but the employee has the right to refuse without any consequences.

- For time critical, high paid, high protifable projects that require double working hours, the Company will pay tree times the salary and/or offer paid vacation days.

- The Company will actively encourage it’s employees to take out their vacation and not save it for later. This is especially imporant for employees that are “burning out”.

- Company needs to be long term cost efficient in it’s daily operation. This should be considered when choosing software, phone usage, equipment etc.

- The Company should budget for at least 3 travelling meetings for every employee to ensure that people can work efficiently and get to know each other. One of the meetings should be an all company meeting.

- The Company will recognise the importance of spouses/family members in a distributed environment and have the following spouse policy:

- The spouse is encouraged to attend the all company meeting. The Company will pay half of the spouses travelling tickets and allow the spouses to share a hotel room (at no extra cost for the Employee). - The spouse is invited to up to 4 dinners/years (if employees are gathered over dinner). - In the above rules another family member can be substituted instead of the spouse.

- Company will actively help and sponsor open source projects (see bonus plan).

- The Company will strive for having as much of it’s plans and information publicly available. All rules of the Company will be made public on it’s web site.

- All software produced by the company will be open/free source (with the exception to classified customer projects). At equal profit company will prefer to do open/free software projects.

- At end of year the profit will be distributed as follows:

- 45 % will be saved for expansion

- 5 % will be donated to open source projects. The project (’s) will be chosen by the employees of the company by voting.

- 5 % will be used to support charities The projects will be chosen by the employees of the company by voting.

- 20 % will be used to pay off existing debts.

- 20-45 % (depending of payed debts) will be given out (as bonus, dividend or some other form) to employees and investors based on their VIP number and the number of working hours.

The bonus for each employee is calculated as follows:

employee_profit_hours = employee_working_hours*VIP.

bonus= profit/(SUM(all employee_profit_hours))*employee_profit_hours

An investor that as invested 100,000 Euro is treated as an employee of VIP level 3 that has 37.5 hours a week for 47 weeks.

- At end of year company will distribute 100,000 ’semi-shares’ to it’s employees and active investors, in proportion to ones ‘employee_profit_hour’. This share does not have any other rights than if the company would get sold then the money paid for the company (minus all costs, investments, loans etc) will be distributed among all semi-share holders.

- At end of year the company should strive to pay of (part of) it’s investors if it doesn’t expect to need the money within 2 years time frame.

Rules of the Company can only be changed if at least 75 % of the company employees doesn’t oppose to the changes.


Decision-making processes

(Note that these are only guidelines and may be changed. However the changes MUST follow the spirit of the original guidelines).

The Company is lead by a CEO. His actions are governed by:

- The advisory board that is a team of external chosen experts.

- An governance team, which is chosen among the employees of the Company and people from the advisory board.

The purpose of the advisory board is to give good advice to the CEO and the employees of the company.

The purpose of the governance team is to give directives (that must be followed) to the CEO and suggest changes to the rules and decisions processes. The governance team have the right to fire and reinstate people (including the CEO).

- Company will be lead in an open and democratic fashion:

- All (not customer classified information) information will be public inside of the company. This includes salaries, bonuses, shares, birthdays etc.

- Decisions will be done in a democratic fashion and all employees should have a chance to have their say in things that matters to them.

- In case of disagreement things should be resolved by voting with the 3 vote rule; ‘Yes, No and Never’. A decision should normally not be taken if there is a single ‘Never’ vote.

In exceptional ‘life and death’ cases, after through discussions have been had and after all other options are exhausted, a decisions can be taken even if there is ‘a few’ ‘Never’ votes, if 50 % of the company will vote yes to the proposal.

- Company should work according to the moto: “Do good decisions fast but be prepared to quickly change course if there is a way to do it” This implies that the following should holds for ‘controversial decision’:

- If requested, the decision makers needs to clearly define the bases for a decisions and give means for proving/disapproving that the decision is in the Company best interest. If a decisions is proved to be wrong, it needs to be reverted and the decision makers need to analyse why it went wrong and put up measures that it shouldn’t happen again.

- Company should learn from it’s mistakes and it’s successes. It should strive to repeat it’s success and avoid it’s mistakes in the future.


Final note:

The owners of 50 % of the voting shares in the Company (initially only the founders) have the definite power to say ‘NO’ to any made decision that doesn’t have 75 % of the employees behind it. They can also propose new decisions that will be be taken if 75 % of the employees stands behind it. This rule can only be changed with 85 % of the voting shares.