Web Site Design and Development

The customary joke for an off-key vocalist or a corny jokester is “don’t quit your day job”.

I had lunch with a friend a few days ago, who’s response to my trial organizational charter was that there was nothing original in it to attract investors except for the organizational structure.

It seems to me he missed the point of an employee owned company.  We don’t have investors, except the employees who invest their time and talent.  And to be sure, nothing in what I’ve proposed so far amounts to the invention of the World Wide Web or the discovery of a way to turn discarded laptop batteries into crude oil.  So as entrepreneurs go I’m a total drudge. 

Even the organizational structure is old hat.  They even have a sort of chamber of commerce you can join, which as far as I can tell from their like benefits page is like most chambers of commerce.  For a couple of hundred bucks a year, they’ll  take you’re money and send you a newsletter.  Nice work if you can get it.

(Now, now.  Nobody wants to own a business with a smartass, John).

“So”, I might have asked my friend at lunch, “what’s your idea?”

If you guessed "he didn’t have one”, you win a Nobel Prize for guessing.  But it doesn’t come with a stipend like a real Nobel Prize, so don’t quit your day job.

Mostly we talked about my friends position vis a vis capitalists past and future, so I wasn’t able to wrest the blueprints for the Wheel-less Seque or the Kindle Bottle-opener from him before lunch ended.

I probably shouldn’t dwell so much on the dark side.  I got a nice note from Jason Mott over at Ronin offering to help me get ParticleWave off the ground, and I got a comment from Dave.

Heck, we’re practically Edison’s lab already, and thank God we’re not in New Jersey.

I’m going to just go along as though I were an employee owned company already, since if you have one guy, the difference between one guy and an employee owned collective works out to be simply a matter of emphasis.

It changes the to-do list a bit, but not by much.  I downloaded Skype so I could work remotely with people who aren’t in my company yet, in case they should end up existing.  I may upgrade my Unfuddle Account.  There may be a spreadsheet or a new bank account involved, to show the newcomers how many hours I’ve worked and how much I’ve capitalized so far.

Who can turn the world on with her smile?
Who can take a nothing day, and suddenly make it all seem worthwhile?
Well it’s you girl, and you should know it
With each glance and every little movement you show it
Love is all around, no need to waste it
You can have a town, why don’t you take it
You’re gonna make it after all
You’re gonna make it after all.

I hope you’ve enjoyed this musical interlude as much as I have.  I know, I know:  don’t quit your day job.

I have a few conservative friends. I can’t help it. I live in El Dorado County, not Berkeley. One of my conservative friends who I haven’t seen in a few years used to say that his quarrel with liberals was that they had a lot of knee-jerk ideas. A search for "knee jerk liberal" returns 431,000 Google results, while "knee jerk conservative" returns only 408,000, which proves (scientifically, of course) that liberals have 5.6% more knees than conservatives.

Our abundance of knees is why conservatives less often have a leg to stand on. Unfortunately, this also means we liberals have 5.6% more jerks, so don’t rest on your laurels just yet.

What Has Liberalism to Do With Open Source?

Nothing.

Surprised?  You may find one of your mental knees trying to jerk as we speak.  People seem to innately associate open source with Barrack Obama, gay marriage, and the rest of the rebel alliance, while of course when we think closed source, we generally think of Microsoft, which conjures up Darth Vader, Dick Cheney, and the tanks at Tiananmen Square.

Hey, don’t blame me.  I didn’t make up your mental categories.

I do however find this very interesting.  I was beginning to think about this as I started to notice that everywhere I turned when starting to think about creating an Employee Owned Software Collective, I found that the companies out there were all open source companies.  The first company I came across was the Ronin Tech Collective, who describe themselves thus:

We are a worker-owned and operated technology collective, focused on workplace democracy and promoting a democratic society while supporting progressive businesses, non-profits, and cooperatives by providing open-source website development and consulting.

I have an email out to them, because that’s all good.  (I’m not religious about languages – good socialist that I am, I’m atheistic about them).  My point, again, though is that the assumption is that progressivism and open source go together.  Check out the United Federation of Worker Cooperative’s welcome of their newest member, which I’ll reprint here since ultimately they’ll end up with a still newer member and the link would be no good:

Welcome to our newest member! Passionate about sustainability,this web design and custom application developer has deep roots in Seattle’s progressive communities.

Now if you navigate to the company in question, you’ll find that they “[serve] sustainability-driven businesses and organizations with professional Internet expertise.  We build highly interactive websites with open source software to help you achieve your goals.”

Of course, if you’re going to “support progressive businesses” or serve “sustainability-driven businesses”, you need to be open source, right? 

Why?  For the same reason “stark” doesn’t go with “hungry”.  Nobody’s stark hungry, though we know stark means completely.  If you’re stark, then by golly, we all know you’re stark naked.

When I mentioned to my wife that I was thinking about starting an employee owned collective, fine wife as she is, she didn’t say, “What, are you crazy?  You have a good job, you’ll go broke.”  What she said was:  “You should look into Open Source.”

Is There Anything Wrong With This?

So what’s wrong with a company using Open Source and being Progressive?  Nothing at all.  Here are a few ideas though:

1. Don’t Limit Your Customer Base
   Yes, there are a lot of companies who are building curly light-bulbs or selling low cruelty mochas, but why should we as an employee run business sell only to them?  What if the National Rifle Association wants a web site?  Do we turn them down? 
2. Serve Your Employees
   I just talked to a friend I’ve known for some forty-nine years or so, when our mom’s used to stick us in the same playpen so they could talk.  He told me the story of how a bank he used to work for as a DBA wanted to switch from SQL Server to PostgreSQL, and his initial reaction was:  “I don’t want that on my resume.”  He went on to tell how he met some folks at a PostgreSql conference who told him the story of how they were travelling in a van and concerned that if the Van crashed, there’d be no more PostgreSQL support.   Programmers want to work in a place where there skills are transferrable.  This is so they can take their marbles and go home if your project gets too stupid.  Try this:  go up on Dice and search for “Ruby on Rails”, then search for “ASP.NET”.  I will wait here for you.
3. Open Source is Good Because It’s Free
   Well, this is partially true.  I’m always amazed at how many blogs about ASP.NET are running on Wordpress or Blogspot or another non-ASP platform.  At the same time, I see the fact that open source Application Service Provider companies don’t offer an upgrade and consulting path for medium to large businesses who want a Microsoft hosted platform to be hosted in house to be a huge opportunity. 

   Moreover, as a programmer, free software is not good.  Software that I own (in whole or in part) and can sell is good.  Does that mean I’m going to do a bad job or not offer my clients a fair price?  No, it just means I’m not working for free.

   Labor union organizers had a word for people who did things cheaply for the bosses.  They called them scabs.  Of course, in the course of things, labor unions and socialism gave way to liberalism.  (Love me, love me, love me, I’m a Liberal).  Today we who are afraid to be called liberals are known as progressives, and we lament the fate of workers around the world while refusing steadfastly to pay for music, software, or anything else of artistic value.

Win-Win or Don’t Play

The problem of course with working as a programmer for a big company is that you’ don’t have a say in how the software is created.  Working open source, you can do whatever you want for free, and then try to sell that to people who by definition don’t pay for things.  Working as an employee-owner in a closed source shop, you can build your skills and own the software that is sold and forms the basis of the consulting business –  the “means of production”, if you will.  Your clients will benefit from your longevity to the company and the dedication with which you take a long term view to create outstanding software.  Everybody wins.  And nobody gets run over by a tank.

ParticleWave is currently being organized as startup employee owned cooperative, owned and controlled exclusively by its employees.

This document is a DRAFT of how that might look – based on one founder’s take on how we might be organized and do business.  If others are interested and committed to this idea, then we should probably get together weekly or something and go through this process.

This document consists of the following sections.

• Business Activities
• DRAFT Organizational Structure
• Related Resources / Reading

Business Activities

ParticleWave owners will create multiple lines of business that will, in our consensus opinion, be rewarding to the membership both as people who need to eat and as creative software developers.  Some potential business activities include:

• Application Service Provider Model Applications
  We will create commercial web applications using ASP.NET MVC or other web development environments that will compete directly and favorably with solutions developed by companies like 37 Signals (a Ruby on Rails shop).  Unlike 37 Signals, however, we will also offer these applications as licensed solutions sold with or without an associated consulting engagement.   [My own preference is to see this grow into our core business model].
• Consulting and Contract Programming and Web Development
  In addition to creating long term value through service applications owned by the company, we will also create software to be owned by clients.

DRAFT organizational structure.

The word owner is used throughout as a synonym for owner-employee.  Although we may from time to time hire employees who are not asked to stay on as owners (temp workers, contractors, or potential owners on probation), the company will be 100% owned by active employees.  (The only exception to this rule is outlined below in “Legacy Ownership”).  There is therefore no stock sold outside the company.  Also, as much as possible, we will try to have work performed by employee owners, so temporary workers should be the exception and not the rule.  It is not our intent to create a core of “senior partners” who benefit from the work of others, but a true cooperative system.

Company Shares

All owners receive one ownership share for every hour of work contributed that is either billable outside the company or contributes to the goals of the company as laid down by the voting owners.  A share is a percentage of the yearly profit payout if the company is profitable, with the downside risk that the hour could have been better spent playing World of Warcraft or eating a hamburger.   This is not a stock option, which we all know often turns out to be valueless toilet paper, but a full ownership share, which may also turn out to be valueless toilet paper.

We will create a mechanism for tracking hours that the members can use.  The current number of shares, amount of capitalization, and other income and expense information will be available to all members.

Company shares may not be transferred or sold.

Voting Members

Owners who are skilled enough to work billable hours and who wish to help direct the affairs of the company and make a more significant contribution may, with the approval of the existing voting members.  Voting members will capitalize the company.  The capitalization requirements are $4,800, payable as either:

• Twenty-four monthly payments of $200.
• Forty-eight monthly payments of $100.

Voting members expect to work for the company full time, either now or as soon as practicable.

Management

The company is managed by the informed consensus of all voting owners.

A Board of Directors consisting of not more than five owners will be elected every six months.  Their responsibilities will be limited to the following areas of concern:

• Ensuring compliance with Federal, State, and Local laws and tax requirements.
• (Annually) setting the ratio of gross receipts to be allocated to the general fund versus the membership fund.  The general fund should consist of the no more than the amount needed to cover the expenses of the business, plus a prudent reserve.
• Working with those outside the company (sales, managing vendors etc). Working with the ownership at large to reach a consensus on any and all hiring or firing decisions.

Members of the board will make the same compensation as anyone else, assuming anyone else does.  Also, the board should be mindful that it’s purpose is to serve the owners collectively.  Shares of ownership and the corresponding dividend payments will always be equal among Non-Voting Members, Voting Members, and the Board.  There are no preferred shares, and the rule is one hour of work, one share.

All other company affairs will be decided at a company meeting to be held at regular intervals.   This document naturally can’t cover everything we do.  Initially, the meetings will be held weekly.  Any matter may be raised by any voting owner, with the outcome to be decided by as much as possible by a consensus.   In the event a consensus cannot be reached, the outcome will be decided by a simple majority.

Legacy Ownership

• Capital shares must be transacted within 90 days of an owner’s termination of their employment.
• Work shares are retained according to the work share formula described in the section “Ownership Share Formula.”

Further Reading

What is an Employee Owned Cooperative.
This article is an excellent introduction to how Employee Owned Cooperatives may be structured.

U.S. Federation of Worker Cooperatives
Organization consisting of member companies organized as cooperatives.

The Rochdale Prinicples
A core set of principles and values that many co-op organizations follow.

California Center for Cooperative Development
State analog to the US Federation of Worker Cooperatives.  There’s a lot of good information here including an introduction to Worker Owned Co-Operatives.

National Center for Employee Ownership
A detailed resource of information we may need going forward.

Ronin Tech Collective.
A Vermont web development software company organized as an Employee Owned Cooperative