Social Business thoughts

A month or two ago I came across an amazing piece by Muhammad Yunus, where he introduces the ‘Social Business’. I do hope the meme builds momentum, and I’m hoping my ‘dot-org‘ concept can grow to be the technological sector of the social business world. It’s a great narrowing of the term ‘Social Enterprise‘, which I feel has almost been too broadly adopted so as to become less meaningful. I’m looking for a more narrow focus – entities that are fundamentally both in service of a mission and operated to draw income from the market, not from charity. He articulates this better than I’ve seen before, with his full cost recovery social business – leaving behind the dependency of a charity, one enters the business world with ‘limitless possibilities’.

I especially liked his points about a Social Stock Market, that it needs to be a set of separate concepts, with different measures and media outlets. But I find his ideas on how to get there a bit weak – having a design competition that rewards the best ones with funding. He also suggests that someone soon could just hatch a Social Stock Market, and a little research found that Rockefeller is already moving to fund one. But I’m fearful that it’s too much too soon, and that a bunch of not so great social enterprises will give it a bad name.

Though maybe it would just be a sector of the Social Stock Market over time, one thing I’ve been thinking about, especially as OpenGeo progresses towards full cost recovery, is making it so money generated by social businesses is viral. The current thought with OpenGeo is that relatively soon we’ll spin it off in to its own company, fully owned by the foundation (TOPP), just like the Mozilla Corporation. Most profit will then go back to TOPP (with a portion towards employee profit sharing), which is a not for profit and by definition has to reinvest the money back in service of its mission. We’ve been thinking about what ‘outside investment’ might look like, and I’m pretty sure we’d want it to operate like the money our funder is putting in now – all returns must go back in service of our mission. But I’m thinking that outside investors could then have control over which TOPP initiatives their returns could go towards, and could choose to direct a new project, leveraging a team of programmers and designers from TOPP. If there was a social stock market, however, it would make perfect sense that their returns could go to other ventures that also guarantee to put their returns back on the alternate market.

Thus money would operate like source code with the GPL – it only helps those who agree to the same set of principles, towards a commons that can be used by others with the same values. I like this because I think it cuts a nice middle ground between non-profit charity giving and the social enterprise investment now that has little way of knowing how much investors actually do care about the profit bottom line. I suppose the money could also go back in to non-profits that are more geared towards charity. This would help foundations allow to make their endowments work for good, instead of just having the capital in traditional investments. But I’d hope that instead of just returning back to foundation endowments it boot straps social venture capital firms and incubators and more capital in service of social businesses. And thus shares in the social stock market (or at least sector thereof) is a real alternative with teeth, where success breeds further capital for more success, instead of just a nice idea.

I have not read any wider literature on these things, so this may be very naive, or an idea already tried, but it sounds potentially cool to me, and it’s really just trying to extend the proto-model we have at TOPP. But I hope to read more on where things are at with social enterprise and where they can move forward, as we’ve mostly been operating in a vacuum.

I work for a dot-org

So back in May I wrote a post that touched on the need for a name the kinds of hybrid organization that don’t fit nicely in to the non-profit vs. for-profit binary view of the world. The best we came up with was ‘non-corporation’, which still suffers from the problem of being defined by what it’s not, not by what it is. Since then I’ve heard ‘for-benefit’, which I liked a bit more, but am not in love with. And when introducing TOPP I generally just say ‘high tech non-profit’. But I think I’ve finally come upon the name to use, and it was sitting right under my nose all along.

‘I work for a dot-org’.

Try it out, let me know what you think. It’s obviously a play on the ‘dot-com‘ – which has been well established as something other than working for a big corporation (even though many of them have since become big corporations). It is not a narrow definition, which I like, as I think it’s far too soon to define what a ‘dot-org’ is, and what isn’t one. This parallels the ‘dot-com’, which seemed to be any company that was doing internet stuff. I like that it softly emphasizes a high tech nature, but the only real criteria is that the organization classifies itself online with a .org top level domain name. But I do think that non-profits doing the traditional non-profit thing should not be considered ‘dot-orgs’, just like citibank didn’t become a ‘dot-com’ when they put up a site at citibank.com.

Ok, so now that we’ve got a name the next thing to do is to spread the meme. We probably need some nice manifesto, or at least some concrete definition of what it is, even if it is something broadly inclusive. Then spread it widely, get the organizations that would be obvious dot-orgs to start identifying themselves as such, and then get our friends in the media to start writing up stories. I think success will be when a kid graduating from college can tell her parents that she’s going to work for a dot-org when she graduates, and have them not only know what that is, but be psyched that their daughter is going to be doing something good for the world and will be able to pay off her student loans before she’s 40. Or at least that will be the first success, the final success will be when the standard way to set up a new venture will be something more just and better structured to do good than the corporations running rampant today.

Conversations on what’s next

So this is more of a snapshot in what I feel may be one of the major thought (and indeed praxis) trends in my future. For the blog I've labeled it 'augmenting capitalism', which is a term I've heard and liked, in that it emphasizes that there is something worth saving. But it's not just augmenting, it's also cutting back. So another way to put it would be 'capitalism without the capitalist'. Namely that mythical figure who does nothing for an enterprise except supply money, and in our current system is the most handsomely rewarded. I still want enterprise, I still want a market economy, I just want to make the whole process more efficient. I want 'open source for the world', where improvements to the product don't have to always flow through an artificial barrier that takes a tax and gives it to the person who put up that barrier. I want us cooperating (and competing) to make this world go round.

I had two conversations recently on this topic of 'what comes next', both which helped frame some of my thoughts, and indeed give me more hope. The first was with my friend Dave, who has investigated setting up legal foundations to help the causes he cares about. He recently graduated from law school, and he's actually in love with corporate law. Why? Because in his words 'it's the best law money can buy'. Indeed corporate entities have influenced law makers for awhile now, creating an air-tight system that is built to protect the corporation. Constitutional law is fraught full of holes and interpretations, whereas corporate law is crystal clear, so as to protect the money. The great thing, however, is that anyone can set up a corporation, use it for other purposes, and enjoy all the protections that the law affords. Corporate law was built so that if money was at stake, the corporation loses the money, but individual stakeholders don't lose their houses. He talked about the idea of setting up shell corporations, and going after interesting actions, and in retaliation just the shell corporation can get sued – no one else is liable. We further riffed on the idea of non-profits that make money, and corporations owned by foundations. If we look hard, we can start to see the rise of a new forms of organization. One of the best examples is the Mozilla corporation, which is entirely owned by the Mozilla foundation. They are legally allowed to make money and turn a profit, but by definition it all has to go 'to good', since the foundation is the only shareholder, and the foundation has a mission to promote standards on the web. If something they own happens to make money, well, that money just has to go to furthering the mission. Dave also brought up the ACLU, which has a similar foundation/corporation split. Their lawyers bill $400 an hour, which is pretty standard rate for a good lawyer, which they are. So they actually make money for the ACLU, but it just gets reinvested back in to fighting harder for civil liberties. I imagine there are other similar types organizations emerging as well, a new sort of breed of non-profit.
The thing we need to do is create a meme that represents this new form of organization. It's a hybrid, it's not a traditional non-profit, in that it doesn't just beg for money from rich donors year after year to complete it's mission. And it's not a traditional business, in that it has some unalterable mission to do good written in to its core. And I'm talking something more positive than Google's 'Don't Be Evil'. I applaud the founders for attempting to write it in to their DNA, but I fear that as a publicly traded company it is too easy to hijack at some point (there's many more thoughts about Google in particular, but I'll hold off for now), that it's not bullet proof in the way a non-profit or a corporation owned by a foundation is.

To create the meme we need a good name for this new hybrid type of organization. The best we came up with was a 'non-corporation'. It's not the profit we don't want, in fact we seek profit, but only to reinvest in further missions to do good. It's just the corporate environment and structure that we abhor, and it's tendency to become a cancerous beast looking to sustain itself on ever more growth and profit. It's a word with enough negative connotations, so it works well. The only problem I have is that it still begs the question, 'well, what are you?'. It's negative in its essence, instead of expressing a positive, which I prefer. But I've got nothing better yet.

The second conversation I had was with my friend Jared, which was interesting because we ended up talking towards the same place. What was most interesting about this to me is that Jared is far from any kind of radical. He's in the Venture Capital industry, he's just wrapped up helping grow a startup, and he's figuring out what to do next. He has lots of offers to become an 'entrepreneur in residence' at a number of VC firms, but he's looking to do something bigger. He wants to get those with money cooperating more with those with ideas in an environment more like the way hollywood works. You find backing and gather a team of people to implement a vision. The way the venture industry currently works is geared towards throwing money at companies often too fast, in the hopes that one of them will blow up. If 1 out of 10 companies funded is a big success, then the VC wins. But the problem is that the other 9 companies suffer. They are often forced to try to grow faster than is necessary or even advisable. I worked for Jared at a company that went through that exactly, where it was a very solid idea, and they had a very bright young team. But instead of letting the young guys learn on their own terms on a smaller scale, the VC's brought aboard a 'senior management' team. Though they had more experience in general, they certainly didn't in the domain, and all they really understood better than the founders was how to take orders from the people who gave them money. The VC's insisted that they grow super fast, extend and over-extend themselves, and that when they ran out of money they'd be sure to get another round of funding. They did exactly what the VC's told them, but at the end of the road there was no additional funding. If the company had been allowed to grow a bit more slowly, building up revenue before spending on credit, then I'm quite sure that it would have been a success.

The takeaway for me is that we both want to change how money works. We want to increase innovation, and to have money more easily flow in to good ideas and things that help the world, instead of pooling around waste and cruft. From very different lenses we see that there must be a better way than the current way. Indeed when we realized we were talking at the same thing, it surprised us that there aren't more people talking about it, since it seems so obvious. Capital is no longer flowing as efficiently as it could, because it gets wrapped up in these corporate structures that are too simplified to distribute it properly. For any single corporate structure it may make sense to pay congress to extend the copyright regime, to put forth a monopoly, to cause cancer to workers. But the system that results is flawed, it's not the 'end of history' and a natural result of the market. Instead it feels more like a temporary wrong turn, that we need to correct in to a more just _and_ more efficient system to build the future. Or at least I hope we can work together to make it temporary, and not a falling off of the edge.

A Foundation of Participation

So a couple weeks ago I had the pleasure of participating in the formation of the new Open Source Geospatial Foundation. I’m quite excited by the possibilities, but as I’m trying to keep this blog more focused on a few ideas instead of a news source or a soapbox for me to stand on, I have left it to others to talk about specifics.

One of the main topics of this writing for me is to play with some ideas on the future of business and production, augmenting capitalism towards something even more just and democratic than our current system. I still have a post bouncing in my brain about the potential of sustainable innovation performed by legal entities that are non-profit by nature, which is what I’m going for with The Open Planning Project. But another potentially interesting hybrid model may be emerging with this new Open Source GeoSpatial Foundation (aka OSGeo).

I believe OSGeo has the potential to be a very unique entity in the world. The closest model that we have is the Apache Foundation, but it soon became obvious that there are several key differences. One is that we already have a number of open source geospatial communities that function very well, and more importantly, function differently from one another. The new foundation must be able to take all in under one umbrella, without forcing any individual project to give up the architectures of participation that they’ve found success with. There is a new infrastructure, that some projects can gain a lot from joining and embracing, but for others it could be a step backwards. There are certainly advantages to having every project on the exact same infrastructure, from a ‘marketing’ perspective, but those may not outweigh sacrifices a project must make in its method of getting things done, the tools that participants use to collaborate. Thankfully all the foundation members involved see the importance of finding the best balance between the two, hopefully utilizing things like a common look and feel, but functioning on different infrastructures.

The other main difference I see from the Apache Foundation is that we’re looking to do ‘more’. Apache is basically a legal structure so that big corporations who put money and energy in to the code can’t sue each other. It operates on very low overhead, and the majority of the energy of the foundation itself is focused on working out the legalities of their licenses. And it maintains the infrastructure to support one of the most successful architectures of participation, with many incredibly high quality projects. But it does very little marketing, it does not seek to legitimize ‘open source’, that’s much more the function of the Open Source Institute. What we’re looking to do is more cross sectional, but focused on a single domain – GIS, instead of just software in general. And there’s a lot more work to be done than just set up technical infrastructure (indeed few of our projects are really lacking in that), and form a legal entity to hold the code (which is important, for sure, and something none of the os geo projects really have right now, but honestly shouldn’t be too difficult).

The ‘more’ is yet to be fully defined, but there seems to be energy towards many things, including marketing type activities (legitimizing open source in the GIS arena, for example), curriculum development, ushering in academics to open source, supporting local user groups, advocating for more availability of geographic data, cross collaborations between projects on standards and reducing code duplication, and even bringing architectures of participation to geographic data.

This is a lot, and I must admit a part of me fears a foundation with a huge overhead that has to be supported through corporate sponsers year after year (I’ll try to explicate the reasons for this in another post). But if we don’t default in to other models of organization, I think this new foundation has a great potential to form a new sort of entity, which I will call a ‘foundation of participation’. We are blessed with some great start up funding, and I must say I was incredibly impressed by the people from Autodesk, and I came in with a lot of skepticism. The large capital expense on the collabnet software scares me, but Gary Lang had the excellent idea of creating an ‘insurance fund’, where we estimate how much time and money it would take to migrate to a less expensive solution. If we get that in place, then we are free to explore just how far we can take things, making the larger version sustainable, without having to worry about all being lost if things don’t work out as we hope. We can just pull back to a more modest version.

As for creating this foundation of participation, what I think it could be is a hub of all sorts of ideas and energy around open source GIS that are not directly related to code. Many of us are thinking about the same types of things, such as opening geographic data, curriculum development, conferences, local user groups, ect. But there’s no obvious way to start up these things in the way that there is for an open source software project. One can instantly bootstrap with sourceforge, getting all the tools needed, expanding to other infrastructures as needed. And there are many models of how to organize people in software development, from a benevolent dictator model to consensus based decision making, and many hybrids in between. The good code naturally filters to the top, and often software that is better than anything out there is produced.

What I’d like to see is the OSGeo foundation be able to gather a lot of the energy around the ‘other’ tasks. To allow GIS ‘users’ to join and make a difference, to have their ideas filter up, even if they don’t write code. Tyler Mitchell has been raring to go on such things, and I suspect he is not alone. The problem right now is that the barrier to entry is too high. Tyler basically had to write a book, and get a correlated blog on O’Reilly, doing it all himself just because he really wanted to promote the great tools he had come to learn about. I hope the foundation can come up with some ‘best practices’, of how others can write articles, can speak at conferences and the like. Right now we’re replicating lots of work on basic presentations about open source GIS, and many people are relearning the same things about how the tools fit in with one another. My hope is the foundation of participation can reduce that replication of work. Allow anyone to upload the slides that they used, gather good quotes and stats, collaborate on comparisons between the various packages. Good ideas about how to sell an Open Source based system in Brazil should be posted so others can replicate their success. The arguments that work for certain situations, and fail in others. Curriculum development falls in a similar category, as several disparate efforts are making courses based on OS GIS software, but few others know about them. There are many more tasks like this, I’ll leave it to Tyler to gather them all up.

My point is that these activities should be enabled in the same way the open source software is enabled. Create architectures of participation, which will naturally be different from each other in specifics, but do share a common essence. We should think hard about what tools enable this, and what social structures can contribute to and grow the architecture. And indeed we need a holarchy of participation where the efforts play into and out of one another, building something greater than any constituent parts. Thankfully we have a solid base of open source software projects to build upon – the people in this geospatial arena that most naturally think in a collaboratively way.

If we look at the foundation as a potential architecture of participation, if that’s what we’re trying to do, to allow many more people to collaborate in building a ‘movement’ of sorts around open source geospatial software, then it puts into clear contrast some of the potential worries I’ve had about it. In my previous post I outlined three points as things that enable architectures of participation. One is clearly met, as few would disagree that the things that people want to do with the foundation are useful. Indeed to some extent we are talking about something which is meta-useful, a space of safety and collaboration from which other efforts can grow. The other two I have worries about. One is to lower the barriers to entry as much as possible. The board is working on this, and has made some good strides, but in some ways I think the technical infrastructure of collabnet that makes our core is not actually oriented around architectures of participation. It is great infrastructure for open source software projects themselves, provides all the base tools, but isn’t yet hip to supporting the activities around the software that can be more collaborative. The other is to treat your users as your co-developers. The big worry for me on this front is that we will have a divide between ‘members’ of the foundation, the 45 we decided to start with, and those who didn’t get nominated or elected. We need to think about how to make the foundation inclusive, to have the governance structure really be bottom up. Indeed I’d almost like to see the board make itself obsolete, to have power truly reside in the committees – for software projects and indeed other projects – to have the board as their steward.

As we’re already quite long, I’ll address each of these in its own post. But overall I think the energy of the foundation is really in the right direction towards a very cool inclusive organization, that could accomplish a lot of good. I do believe we need to not default in to other models of how different software foundations work, which is more difficult as it’s easier to just follow what’s come before. We have the potential to do something much bigger than just a place so corporations can’t sue one another. Indeed the software projects already run themselves quite well, and we don’t have much to add there. It’s everything around the software where the foundation can flourish. I think we could make Open Source the standard in the GeoSpatial arena faster than anyone has done in other domains. But that involves much more than just making good software. We just have to figure out how to actually capture a majority of the energy around the software, and get it to just snowball to something far bigger than any of us. If this foundation can accomplish that, then I think we have a bright future indeed.

The profit motive has gone too far

capitalism hasn’t failed, but its hardly succeeded either

it needs augmenting

– from The Headmap Manifesto

I’m not saying that money doesn’t matter – it has way too many meanings and implications in reality to not matter. But I will say that I really don’t like how the field of economics reduces people’s motivations to pure monetary terms. Or rather, I’m fine if they do that within their field, to build interesting models, but I feel that meme has taken over. It reduces humans to mere rational beings, looking to maximize money. But we are far more than our bank account and what we own. I feel the profit motive has gone too far, that it has taken over other, more noble (and just as valid) motives, as the only way of interpreting the world. Some argue that without the protection of patents and the promise of large sums of money, nobody would be motivated to innovate. This is simply not true, it’s like saying that artists would not be motivated to paint if they weren’t going to become rich.

We as humans want to express ourselves, we have innate curiosity and desire to create things in the world. Granted, to build technology, or to make music, or to do anything creative, money is needed to support the effort. But I feel the current model of limited liability corporations and absolute ownership are not the apex of how to best encourage human creativity. I believe another route is being shown with the open source model, where the motivations are varied, but the primary one is not money. Money plays a role, that can not be denied. People have to pay their bills, many (including me) get paid to work on open source projects. But no one has the potential to make millions from their contribution to open source software – they do it for a wide variety of other motivations. I’m very interesting in exploring how to set up and propagate motivation mechanisms that more efficiently encourage human creativity and innovation.

I feel that the current set of motivations as epitomized by the limited liability corporation, have played a huge role in getting us to where we are today, but that they are past their prime. Corporations as their own legal, self propagating entities, are wreaking destruction by their very logic.