I’ve been away round the UK visiting friends and family last week and the start of this, and have just got back. This evening I met up with Stuart and Graham in London for a planning meeting on Ghana. We leave early Saturday morning.

I’ve read all the instructions on my digital camera (thanks everyone from Creature Labs for giving it to me!), have a spare set of batteries, so perhaps I can upload some pictures here from Accra, or else I’ll do a proper write-up afterwards.

Last Wednesday I went to visit Microrobotics as part of my research into co-operative businesses. This one being particularly relevant to me as it is high tech. Their website describes it as “employee-owned”, which is accurate, although there is lots of interesting history to this. Karl kindly explained it to me, and there are some much more gritty lessons than I got from the CCDA the week before.

A summary and some interesting things:

• The business first took on a co-operative structure about 7 years ago, when it was in dept to the tune of �50,000. The events which give companies the opportunity to become co-operatives are important to me. There aren’t very many co-operatively owned companies, so the process of becoming one is too hard at the moment. In this case there was a political culture inside the company supportive of the change, and the existing owner had nothing financial to lose by giving it away.
• They chose to incorporate as a Friendly Society. The CCDA had advised me that these are no good, as proved to be the case (see below). So some learning is going on in the co-op movement.
• It took about a year of paperwork and decisions to carry out, and shortly after the Managing Director (MD; for young people and Americans, that’s the old British word for CEO) left. It’s not clear how much this was a deliberate get-out plan, how much he found he didn’t like losing overall control, and how much it was for other reasons.
• At this point they lost two software engineers, most likely because everyone in the company was being paid the same. IT was really picking up in Cambridge at this time, so they would easily have found better paid jobs.
• After a while, it was clear that the new structure was no good. There were three main reasons:
  
  1. They needed a differential pay structure. Otherwise they couldn’t hire and retain staff, and they didn’t make enough money to pay everyone the highest rates. This seems plain as a pikestaff to me; they were being a little idealistic to think that they could pay everyone the same.
     
  2. Sales had an unusual difficulty. Friendly societies appear in a different section on the Companies House register. This meant that other companies didn’t trust Microrobotics. They would search for them as they would search for another company, and wouldn’t find them.
     
  3. There’s no sense of ownership in a friendly society (I think nobody owns anything). There was also a feeling that new people shouldn’t have as much say as longer serving staff. Personally, I don’t see that as a problem, however it does depend very much on the size of a company.

• So they reformed the structure again! This took two years and was costly in time and legal fees. Microrobotics is now a normal private company with an unusual ownership structure. Everyone gets given shares proportionate to the number of years they’ve worked there. To my surprise, when you leave you still own your shares, and you are forced to sell them to the company. This is why “employee-owned” is a better description than “co-operative”. Needless to say, this structure doesn’t quite work, as it is almost an incentive to leave in order to claim value from your shares.

Apart from the ownership, the company is run with a fairly conventional management structure.

• Conflict resolution occurs within this management structure. It really is not much different from shareholder owned companies, in both cases the technocracy runs things.
• They had an MD who left recently, so top level decisions are made by the 3 directors while they find a new one.
• The best aspect is that they have no finance, no external ownership, so they are totally independent. This means they are free to make decisions.
• Over the last 16 years, the company has varied in size from about 3 people to about 15.
• Up to 6 people you all work closely together. Above that number there is a phase change, and you need management meetings. There seems to be another phase change at about 30 people, when everyone doesn’t know everything that is going on. I’ve seen either side of this at Creature Labs, and it is also the size that St Lukes, the advertising agencies which is a co-op, uses for its autonomous subdivisions.
• The ownership structure is still quite new, and the power of ownership hasn’t been used much. My thoughts are that it doesn’t necessarily ever need to be – very rarely do shareholders actually exert any power. Just the fact that employees own a company will change it.
• Customers like the quality of Microrobotics work.

The key lesson seems to be that you can waste a lot of time with this stuff when you should be trying to run your business. Trying to invent novel new structures is difficult, and error prone, even with lots of care and attention. Mistakes are costly.

The lesson is to get a standard structure from ICOM.

Last night the Think Twice nameservers and DNS transferred from Easily (where it was inelegantly forwarding to part of some Demon webpages) to a new account at Pepperfish. This means we can have mailing lists and things, when Daniel sorts them out (thanks Daniel!). Pepperfish rules.

Think Twice was a really good conference this year, and I recommend you go if you’re in Cambridge next spring. OK, even if you’re not. Mark was busily making some flyers for fresher’s fair this week. The conference date is Saturday 22 March 2003, and it’s on the general topic of social justice. What that actually means is that it’s about social injustice, and more importantly about what anyone can do about it. Rather than just whinging.

OK, I’ve decided not to write up my visit to Windhorse Trading as I don’t have enough of a journalistic angle on it, and the trail has gone cold. It’s a Buddhist warehouse business on the outskirts of Cambridge which I had a tour of a couple of weeks ago.

I am interested in it because it is a different form of ethical business. The ethics here comes direct from religious need and experience; in many ways the place is more of a monastry than part of the capitalist system. There are no laws to the ethics of Windhorse, instead they have belief which informs the taking of right-action in the world.

It’s interesting that despite this different basis the ethics of Windhorse (and their shops branded Evolution, such as the one on Fitzroy Street in Cambridge) overlap with those of fair trade, which charities like Oxfam promote. The CEO of Windhorse has recently talked to Oxfam; they were surprised/pleased at this common ground, and perhaps something will come of it.

One other interesting thing, the distraction of sex. Windhorse staff are segregated by gender, the women work upstairs in finance, and in the shops. The men work downstairs on sales, and in the warehouse on picking and packing. This is because sex distracts from what they say you are really meant to be concentratingon; that is the contemplation of the awe of life, and the meditation that leads to enlightenment.

Sounds like Creature Labs to me. Except only Pete Waudby became enlightened, and I have no evidence that the lack of girls assisted.

This week I did some more work at Ravenbrook, and I’m doing more next week. On the shelves there (or perhaps it was Zoonami‘s, who they share an office with) I found an excellent book called Creative Company by Andy Law, about an advertising agency in London which turned into a co-operative, equally owned by everyone who works there.

On Wednesday, Mark organised a planning meeting for next year’s Think Twice conference. Last year’s conference had excellent speakers, and was a brilliant day. However, Mark would like the next one to turn more people into action, to actually assert their democratic power. Rather than just whinging.

While eating pizza nobody came up with anything which actually fitted this. To my surprise, over tea afterwards, the group inexplicably reached a good consensus. The plan is to have a range of activities over an hour and a half at tea time. These vary from workshops and actionful field trips to stalls and just drinking coffee. The idea is to give people a choice of meeting local people who are involved in different issues, and also a choice of the kind of action they might be prepared to do. Hopefully lots of people will do something small but deliberately world changing, who have not done so before.

Yesterday I impulsively decided to go to Ghana with my friend Stuart. He used to work there about six years ago, for Wycliffe the bible translating missionaries. He’s going back for a ceremony to dedicate the completion of the definition of written language for the village that he was in.

I don’t approve of bible translation, because I don’t believe in God or Christianity. However, it’s a great opportunity to see another world, to see Africa, to visit remote and materially poor villages, and meet some people working in development. With a guide who is a good friend and knows the area.

We’re going the first two weeks of November.

Today I showed Sheila at the Harambee Centre how to turn a Word document into a sensible email questionnaire. We just went for copy and paste from Word into an HTML email, then asking people to reply and fill in their answers.

Outlook 2000 has a nice feature that if you type within a reply to an email beyond the end of lines of the replied-to message, then it marks your text with your name and a special colour. This makes it much easier to read the responses!

Computers are still way too hard to use. There’s no easy way of doing a website questionnaire of this form, without coding. Even if there is, it is almost certainly proprietary rather than using standard document formats and protocols.

It was interesting just watching a normal user try to edit an HTML email. It was frustrating, as she quite reasonably expected it to behave exactly as Word. Quite reasonably from a standards and software engineering point of view, it doesn’t. From a usability point of view this sucks.

Some things, like formatting being different, require better standard word processing file formats to use for sending emails. Other things, such as it not having a Word-like spell checker with squiggly red lines built in, are caused by application-focused software.

Software should be document focussed or action focussed. I want to put Word documents in my Outlook folders. I want to make a bookmark in Mozilla which records an entire set of tab pages, including web sites, open instances of Vim, command lines in certain directories, and a Gnumeric spreadsheet.

I want to be able to forward anything to anyone because everything that everyone uses is an international standard.

Went to the Cambridge Co-operative Development Agency (CCDA) today and had a good long chat with Adrian Ashton there.

I am investigating the possibility of persuading someone to start their new software-related business as a co-operative, rather than a more normally structured sort of company limited by guarantee. But that’s just an excuse, as I want to know about it myself anyway. Maybe I will start an open source charity consultancy, and then I’ll need to know.

A few cool/interesting things:

• All businesses have rules, about who the owners, the directors, the management are. About how profit is spent or allocated. About everything. In UK law there is no special definition for a co-op, it is incorporated just as any other business just with different rules.
• Because of this you can invent any laws you like. This is cool. However, you probably want to use an off-the-shelf set of laws as it is cheaper, and they are more likely to work. A bug in your rules could open your company up to a negative destruction that benefits one party, but is overall bad.
• Up until about 20 members co-ops tend to decide things on one person one vote. After that it is too big, and the membership instead appoints directors. This isn’t any different from the currently more common sort of company, where shareholders appoint the directors who appoint the management. Just different people making decisions.
• New co-operatuve businesses have a higher chance of survival than other business structures.
• People are flattered to join a co-op and they show real commitment, as they are running the company. This is a rational economic structure for many business types. I reckon the only reason that it is not more common is social. Given two existing businesses that are quite old, one should expect the co-operative one to do better as it would attract and retain better staff. Certainly, given the choice of two successful software companies, one a co-operative and one not, the co-op would be a more sensible choice for me on a power and (if it is structured right) a financial basis.
• If only one thing could be said about starting a business, it is this. Decide clearly, on your own, what you want from the business. For example, how much and for what reward you are prepared to work, what your goal for the market that the business is in, what exactly is it trying to achieve? When everyone involved has done that, then decide which set of rules suits your purpose the best.
• Founder syndrome. This is where someone does an excellent job of inventing, promoting, pushing and creating a new business. After a few years it is a successful enterprise. Then they cling to it possessively, it is my business. This stifles things, and is bad for the business. The EasyJet chairman recently gave up management to avoid this happening to him.
• Your members (i.e. directors) can be anyone the rules say they are – workers, customers, investors, or a mixture of them all. Having a major customer as a member is oft a good thing, as it cements the relationship and creates loyalty and trust. You need to definte clear rules as to the conditions for membership.
• CCDA partly serves to do for co-ops what organisations like Business Link do for other businesses. However, recently, Business Link have funding specifically for activity relating to co-ops. CCDA are themselves a co-op whose members are its employees, co-ops in Cambridgeshire and local government representatives.
• You can have trigger laws to force wind-up of the company if there is no choice but to break them. This can stop the company escaping too much from its purpose. These rules will usually redistribute assets to charity or to the co-operative movement. I say that in software, it should make it open source.

ICOM are the folk who can help you incorporate your co-operative enterprise. They sell off the shelf rulesets, and provide other support and services.