

The Hacking Business Model - subsystem
http://hackingbusinessmodel.info/

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jzd131
Its an interesting concept. However, it may never work for one simple reason
"risk". When my partners and I started our company the risk that we took was
astronomical, leaving our high-paid jobs, masters, phd's to start a company.
This risk needs to be rewarded and it is via equity. Building a company that
is there only for its employees does not provide the founders with enough
reward to warrant the risk.

This does not include the stress it takes to start and run a company, that
stress should be equally as rewarded.

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marcus_holmes
I've played around with co-operative business structures for this sort of
thing, and if the shares are awarded to each employee as a straight split each
year (so year 1 creates 100 shares, which are split 50% to the 2 founders,
then year 2 creates 100 shares which are split 33% each to 2 founders and 1
employee, and so on) then the founders tend to end up with an outsize lump of
shares, and the early employees do well too.

It ends up rewarding early employees more than the normal company structure,
but I think that's a good thing; they normally have to go through a lot of
disruption (and a fair amount of risk; the chances of the startup not being
able to make payroll occasionally are high) and are a key element to the
success of the organisation anyway.

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swombat
A lot of this stuff sounds interesting - in the same ballpark as what we're
already doing at GrantTree, but some bits are jarringly wrong. For example:

> _The Company is primarily created to generate bonuses for the employees (not
> to get sold)._

Ugh. What an uninspiring company mission statement. Surely the company should
exist to do something worthwhile for its customers first. If it does no good
to the rest of the world, generating bonuses for its employees is... lame.

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ringdabell
That's a bit too cynical...

I read that more as a "company should seek to provide sustainable financial
prosperity for the employees". What's wrong with that? It's hard to provide
for your customers if you and your employees are struggling.

> If it does no good to the rest of the world, generating bonuses for its
> employees is... lame.

I don't know. Not every business produces world-saving value. And that's fine.

You shouldn't need kool-aid level propaganda to validate your business and
motivate your employees...

A primary motivation for me and my business, is creating an institution that
enriches the lives of those part of it. I want to create the type of company
where everyone has some say, where the mission is bigger than any one
individual, and whose employees feel empowered and respected. I've worked too
many bigco jobs that wore and ground people down. My first job out of school
was at a management consultancy. The pay was excellent, the projects were
interesting (and truly made an impact), but the culture of the
industry/company was such that people were ground down to the point that they
became extremely jaded, materialist, negative, etc.

For my older co-workers and bosses that were married and had kids, I always
wondered how that impacted their lives at home and how they treated their love
ones, and in turn the ripple effect that would have.

From reading your blog, I know you have a similar background, so I think you
know what I'm talking about.

The startupbro culture sneers at these "lifestyle business" sentiments, but
there is no shame in a more modest (and I think, balanced) approach.

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swombat
I certainly do know what you're talking about, and definitely agree that that
should be one of the primary objectives of a company... But I think if it's
the only one, then something's wrong.

The company should have an objective to do something good and worthwhile for
people outside of the business. Even "lifestyle businesses", whatever they may
be, should.

All three are fundamentally necessary, sine-qua-non: making money, doing
something worthwhile, and doing it in a way that builds people up rather than
grinding them down.

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ringdabell
Fair enough. This is where I'm the cynical one in the sense that I don't see
the point of having a visionary mission statement if you have to resort to
spin and propaganda tactics to convince your employees to buy into it.

The qualification of "worthwhile" is really subjective to the point where
unless you're literally doing something truly impactful (which I define as
value + massive scale, e.g., cure to cancer, etc.), your value is at best a
surface scratch and at worst a fad.

Consumer oriented startups like Snapchat spring to mind, which seems to have
both a questionable mission statement + a shameless pursuit of founder
enrichment. Not judging (I'm jelly), but I do think it serves the greater
point I'm trying to make.

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swombat
To give you a tangible example, GrantTree's mission has been, from day one, to
help UK startups, by being one of the better players in the UK startup
ecosystem. It's a tangible positive difference which we can all feel we're
making.

Of course, making money is also important, if only because money allows us to
hire better people and do a better job, and it was also a primary reason of
starting GrantTree... but it's not a good enough reason to put all the energy
to grow it past the stage where it is an extremely profitable hobby, to the
stage where it is a genuine business.

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jorde
With the background of coming from Finland and now living in San Francisco, I
have to say that I'm a supporter of the "Default Employee Rules" section when
it comes to working hours and fixed vacation time. While unlimited vacation
policy is common among SF/SV startups it drives people to work all the time
and not actually take holidays (or you're working on your holiday). No matter
how much time you spend at the office people need rest.

The second author of the model is Michael Widenius, a Finn and co-founder of
MySQL.

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marcus_holmes
I like it, except for the democracy bit. Voting sucks as a method of making
decisions. For quick unimportant decisions, sure, vote. But for important
decisions either involve everyone and make it a consensus (i.e. unanimous,
everyone has to agree) or give the authority and responsibility to one person.

Voting gives every vote the same weight, but some people are more
knowledgeable than others and in a better place to know the right course (this
is not 'some people are better than others' but 'some people have more
information than others'). Voting also disables unpopular-but-necessary
decisions, which will kill the company eventually.

I would replace it by either:

\- all decisions are made by one person (not the same person for each
decision). The management team select three appropriate employees to make the
decision, and an all-company vote selects which one will make the decision.

or:

\- the management team will make all decisions, but must provide post a
written explanation of the reasoning behind the decision to the rest of the
company, and any decision may be further discussed at a company meeting.

But that's just my thoughts after 5 mins thinking about it... someone else
probably has better ideas :)

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Halfwake
This is not good. Almost everything, if not everything, in this document is
either specific nitpicking or uselessly vague.

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

That's meaningless if a way of determining what can and can't be made open
isn't included. Here's one of the "concrete tools" that's supposed to help the
company be transparent.

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

This is not helpful.

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

Companies don't strive to make working less fun. This doesn't help.

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

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

The hardware allowances are just fixed numbers that don't take into account
different currencies, job positions, or how the price of parts may change over
time and differ by location. This is brittle.

> The Company should budget for at least 3 traveling 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.

It's possible that all employees don't require travel budgets. It's possible
that no employees require travel budgets.

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_lex
I might be drinking crazy juice, but I see everything EXCEPT a business model.
How does this company make money? How do you attract customers? How do you
reach scale? What you've written down is a bunch of ways to spend money - not
a business. Most businesses do spend money, and some may even benefit from
some of the ideas presented, but please don't call it a business model.

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viniciusspader
The spanish link is broken.

Would do you want help to translate it to portuguese?

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sharemywin
Sounds like this would work for a marketplace like ebay.

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czbond
This is fantastic.

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maerF0x0
anyone know a list of companies following such model?

