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The Open Source Business? 297

Posted by Cliff from the applying-open-source-ideas-elsewhere dept.
Ted wonders: "Being an advocate of the open source software movement for some time, I'm wondering how and if the principles of open source software could be applied to a new type of open source business. In a world where people slave away for the sole profit of a board of directors and merciless shareholders, is there room for a new type of organization that throws away the archaic and monolithic organizational structure of today and from there form a company that has its direction dictated by all of the members that run it. An organization where everyone has an equal say in what goes on. There isn't any limit on how many people can be involved (the more the better, in fact) as long as they can be useful. Could this be the way of the future?"
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The Open Source Business? More

The Open Source Business?

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  • hm. (Score:2, Insightful)

    by GregoryD ( 646395 )
    Sounds like communism... heh heh heh.

    • Re:hm. (Score:2, Insightful)

      by surfbass ( 994805 )
      I was just wondering if he was reading the Manifesto...
      • Or, perhaps, the Federalist papers...

        Remember everyone, when everyone takes an equal part in something, it can be Democracy just as much as it can be communism.

        In fact, communism (in theory) makes everyone equal, wheras democracy gives everyone an equal say.

        This seems much more like democratic business, to me. The communism equivalent would probably be something like paying people less and less depending on how wealthy they are...

    • A.K.A.: Employee Buyout of a Corporation (Score:5, Insightful)

      by reporter ( 666905 ) on Saturday August 12, 2006 @10:18PM (#15896553) Homepage
      The article at the top states, "...is there room for a new type of organization that throws away the archaic and monolithic organizational structure of today and from there form a company that has its direction dictated by all of the members that run it."

      Such an organization already exists. It is an employee-owned company [wikipedia.org], which often becomes employee-owned through an employee buyout. There are numerous examples of employee-owned companies [wikipedia.org].

      The most famous example is United Airlines [businessweek.com]. It operated as an employee-owned corporation from 1994 until 2002 [wikipedia.org].

      The lesson here is that sometimes employee-owned companies succeed. Sometimes, they fail. There is nothing magical about being open source or about being a company structured on the open-source process. Such software and such companies are subject to the whims of the marketplace and can succeed or fail -- as determined by the invisible hand of the free market.

    • It's also the way some well respecte groups operate. It's the way the Religous Society of Friends, or Quakers, has been handling their business and making their decisions for close to 400 years and it's worked for them. Granted they aren't a business, but it shows an organization can survive with such an attitude.

    • Re:hm. (Score:2, Interesting)

      by Skythe ( 921438 )
      I've always thought that given the nerdiness ^H^H^H^H^H^H^H linux expertise within slashdot that some people could band together to form their own little linux venture. Given the expense of windows' and other closed source software i think you could make a hell of an impression demoing linux for a corporation and showing them just how much they could save not having to renew their liscence or upgrading to vista. Once they've migrated to linux, this said hypothetical company could provide support thereafter

  • Good luck with that (Score:4, Insightful)

    by nelsonal ( 549144 ) on Saturday August 12, 2006 @09:41PM (#15896447) Journal
    Open source works mostly because the distribution costs are very low relative to the initial costs of creating software. Very few other industries work that way (power generation and distribution are one).
    • Seems like the original question is largely describing WL Gore & Assoc. They work almost exactly this way. Go to gore.com some time and check them out.
    • Very few other industries work that way (power generation and distribution are one).

      is that why the the amount i pay to have a kWh delivered to my house is almost as much as the amount i pay for the actual power? those 150 kV poles didn't grow by themselves you know :)

  • Leadership by committee? Doubtful. (Score:5, Insightful)

    by XorNand ( 517466 ) * on Saturday August 12, 2006 @09:42PM (#15896450)
    One of my network support customers is a tiny township of a few square miles, it's about the smallest form of government in modern-day America. Almost every single decision has to be approved by their board of trustees of about six-seven people. It takes absolutely *forever* to get anything done and is frustrating beyond belief. Yes, it's even worse than corporate America. I can't possibly imagine to run even a small company like that and still remain competitive.
    • Ah, but a leadership by committee approach is quite different than a strict vote-based or thumbsup/thumbsdown approach. Wheras a committee has to argue about everything to no end, a simple vote or approval poll is just that, and can be conducted quite quickly, especially in a company.

      Of course, the big downsides of democracy (uniformed voters, mostly) obviously wouldn't exist in a company, where (presumably) every employee is intelligent, educated about the company, and has a personal and very material stak
      • I am actually looking at building a business out of an open source model. Leadership by committee is not an issue-- you don't organize buisnesses that way. What you do is empower employees to help the business out. THis means less command and control and a more decentralized work model.

      • Re:Leadership by committee? Doubtful. (Score:5, Insightful)

        by shmlco ( 594907 ) on Sunday August 13, 2006 @02:08AM (#15897265) Homepage
        "...where (presumably) every employee is intelligent, educated about the company, and has a personal and very material stake in the company."

        Anyone remember the story of the kids who found a cat and when asked the sex, immediately voted that he was male and his name was Johnny? Two weeks later "Johnny" had kittens.

        Unfortunately, too many people think they have a equal and valid opinion on any subject. Even when there are in fact educated in a given field, they think that makes them an "expert" in other, non-related fields. Do I really want, for example, a technology company in which the janitors have an equal vote with the engineers? No disrespect, but in all likelyhood if the janitors were intelligent and educated... they wouldn't be janitors.

        Look at all of the companies where the workers voted themselves higher and higher wages and more benefits... and then went bankrupt or out of business because they were no longer competitive. Heck, most people can't even run a lemonade stand successfully, much less a large organization.

        Now, I do think companies, CEOs, and boards need a higher level of accountability. But IMHO, counting runny noses is probably one of the worst ways possible to run a company. Heck, more than six people can't even decide where to have lunch.
        • Can you name some examples of companies that went out of business because the employees had too much say in how the company was run? You say "Look at all of the companies..." but frankly most of the people who are nodding their heads in agreement with you probably couldn't name one company organized this way, much less one that follows the pattern you describe.

          Also, I take issue with your "runny noses" barb. Frankly, this smacks of the same sort of paternalism that neo-cons are constantly accusing liberal
        • Look at all of the companies where the workers voted themselves higher and higher wages and more benefits... and then went bankrupt or out of business because they were no longer competitive.

          I sure do--that would be guys [wikipedia.org] like [wikipedia.org] these [wikipedia.org], right?

          Offhand, though, I can't think of a single case where a worker-run company [blogspot.com] has suffered anything comparable. Certainly not in the last few decades.

          Corporate governance is about monkey psychology, which in practical terms means the tendency for arrogant idiots to rise to t
    • One of the problems mentioned above is the difficulty of making decisions. But another problem is deciding who gets paid. If people can join and leave willy-nilly, how do you make sure that people who are working hard get paid for their work, and people who only join to get a share of the profits are thwarted? It is hard enough to deal with employee leeches in a real company (think of the perpetual spare employee who leeches off of everybody else). Having an "open source company" would be a nightmare for th

    • Re:Leadership by committee? Doubtful. (Score:4, Insightful)

      by ignavus ( 213578 ) on Sunday August 13, 2006 @07:32AM (#15897751)
      (begin sarcasm)
      Yeah, I mean America would never work if everyone had a vote for the legislature and for the national president.

      Only the rich people, who own a share of the country, can really run the country. And the richest should get even more votes than the others.
      (end sarcasm)

      Um ... how is it that huge nations (and India is much bigger than the US) can be run democratically, but a firm with only a fraction of the size of the nation's population on its workforce could not run democratically?

      Why not just change the corporate law: instead of stockholders voting for the board of directors, let the workforce vote for the board of directors, one person one vote?

      At the moment, democratic governments are faced with a plethora of non-democratic institutions (business corporations) with enormous powers. The corporations are governed the same way that America (and England, etc) were governed long ago: those with property had a vote (and those with the most property, the aristocrats, were represented in person in the English Parliament); those without property had no vote. This system is called plutocracy - rule by the wealthy. We got rid of it in politics ... but now it is time to get rid of it in the economic world. America campaigned against decisions (like taxation) being made without the Americans being represented in the decision-making body. Why should employees - the owners of human capital - take second place to those who only invest financial capital in the business? The "human capitalist" (the employee) has more at stake in the business - usually their whole human capital is invested in the one business - it is hard to work in more than two or three businesses at the same time. But the financial capitalist (stockholder) can split their money capital up among hundreds of companies at the same time, to hedge against something going wrong in one company.

      Business requires money and human effort. How come those who contribute the money control the business; and those who contribute the effort get no say? Does that sound fair or democratic? Isn't it putting money above people? Isn't it contrary to the whole basis of a democratic society?

      • Re:Leadership by committee? Doubtful. (Score:4, Insightful)

        by bhmit1 ( 2270 ) on Sunday August 13, 2006 @10:08AM (#15898013) Homepage
        Business requires money and human effort. How come those who contribute the money control the business; and those who contribute the effort get no say? Does that sound fair or democratic? Isn't it putting money above people? Isn't it contrary to the whole basis of a democratic society?
        If you contribute human effort without getting paid, you should be given a share of the company or a partnership. Otherwise, I think it's considered slavery or really really bad negotiating skills. Or were you hoping that you would get rewarded when the business does well and still get paid when it doesn't?

        People who put money into a business are investors that know there's a risk they won't see that money again. They are rewarded for that risk with a share of the company that goes up in value when the company does well. The bigger the risk they take, the more that share should be valued if the company actually succeeds.

        Employees, on the other hand, take absolutely no risk. If you work, you get paid. If you go working for a startup, they often give you options to reward you for taking the risk that you'll be out of a job in a year and may not have a huge starting salary.

        Gordon Gekko said it best, greed is good (up to a point). If you're upset by all those CEO's and business owners that are making all the money, then start your own business or become a CEO (unless you have connections, you're better off trying the former). If you choose to stay an employee, then you get exactly what the company offered in exchange for your services and nothing more.
  • organization runs you.

  • Cooperative (Score:5, Insightful)

    by John Hasler ( 414242 ) on Saturday August 12, 2006 @09:43PM (#15896453) Homepage
    This is called a "cooperative". These have been common in the US for over a hundred years.

    • Re:Cooperative (Score:5, Insightful)

      by plopez ( 54068 ) on Saturday August 12, 2006 @10:14PM (#15896542) Journal
      I wish I could mod you up. To expand on the topic, coops are very common, some examples include:
      -Credit unions
      -Insurance compaines
      -Religous communes
      -Rural coops, including telephone, electric, water and sewer coops.
      -Mutual benefit corps. such as fraternal organizations.

      What is blowing the minds of many of the posters is the concept that there is no strict heirarchy of control. There seems be be a propensity of some people to disbelieve that anything can get done without a strict military/fascist type table of order.

      And yet very successful examples are all around us.

      • Re:Cooperative (Score:5, Insightful)

        by John Hasler ( 414242 ) on Saturday August 12, 2006 @10:24PM (#15896574) Homepage
        > What is blowing the minds of many of the posters is the concept that there is
        > no strict heirarchy of control. There seems be be a propensity of some people
        > to disbelieve that anything can get done without a strict military/fascist
        > type table of order.

        There does not exist a human organization in which everyone is equal (though some groups try to pretend).

        • There does not exist a human organization in which everyone is equal (though some groups try to pretend).

          However, the style of cooperatives and consensus-driven organizations is that you don't institutionalize power differences. Just because people aren't equal doesn't mean that we must create and enforce a one-dimensional ranking.

          • Even in cooperatives power is generally doled out according to who put in the most capital. In that sense they are run just like any other corporation. The folks fronting the money get to make the decisions. Any sort of business endeavor that is organized differently is doomed to failure. After all, why would I put my capital into a business, especially a risky small business, if some dork that doesn't put in as much capital as I do gets just as much say in how the business is run.

            • > why would I put my capital into a business, especially a risky small business, if some dork that doesn't put in as much capital as I do gets just as much say in how the business is run. ...well, because you realise that other people may know better than you.
        • Sure, and a non-profit is different from a for-profit business in terms of organization.

          Some businesses such as Gore and Associates do a pretty good job of avoiding institutionalized command and control hierarchies. Hierarchies still exist based on a number of criteria of course, but they are based on persuasion rather than delegated power.

          Personally I am looking into hybrid structures somewhere between your traiditonal C&C system and the lattice system that Gore has pioneered.
          • "... but they are based on persuasion rather than delegated power..."

            So the slick con man with no skills other than the power of persuasion is now in control? Isn't that how we got GWB?
            • You're blaming the persuasive person for the gulibility of the persuaded.
              • No blame, just an illustration of how such a system can and would be abused.
              • You're blaming the persuasive person for the gulibility [sic] of the persuaded.
                No, he's blaming him for exploiting that gullibility, which is wrong no matter how gullible the victim may be. Being gullible does not give anyone the right to take advantage of your gullibility, it merely makes their job easier. Nice "blame the victim" argument ya got there.
                • ...but you're assuming some bad intend on the part of the persuader.

                  If the persuader thinks he is correct, and all he needs to do is convince someone, then is it really his responsibility to enforce some kind of, "Now that's just what I think. I'm certain I'm right, but you should come to your own opinion on this and vote your own way." Actually, that'd probably work better, since it displays some kind of balance and sensitivity.

      • Re:Cooperative (Score:5, Insightful)

        by markdavis ( 642305 ) on Saturday August 12, 2006 @10:45PM (#15896643)
        Generally, co-ops only work well with a relatively homogeneous collection of people. In a business, it is less likely that all the employees will be in such equal mindsets.

        I wouldn't think that co-ops would scale well. It is not all that hard to get 2 to 5 people to agree on a course of action. Much harder , but still doable with 10. But it is nearly impossible with 100 or 1,000. So it will just be a "majority rules".

        Without some type of heiarachy, decision making can be much too slow in an "everyone is equal" environment. You need specialization and sub-grouping to focus on particular issues in depth. And some specialization will, inevitably, put some employees on different authority levels than others. For example, hiring and firing... with 1000 employees, there is no way that such an on-going staffing task could be done by "majority rules".

        Another example is financing. How many of those employees will really understand finance enough to participate in the voting/control of the spending? Buying? Information Systems? Marketing? Etc.

        • Re:Cooperative (Score:3, Insightful)

          by davmoo ( 63521 )
          Besides sales, marketing, IT, etc, there is also the other end of the scale...how many of those employees will volunteer to clean the toilets and empty the trash cans every day. Sooner or later, every "we're all equal" business is going to have trouble with the proverbial (and now politically incorrect way to say it) too many chiefs and not enough indians. Nobody aspires to be a grunt.

          • Re:Cooperative (Score:3, Interesting)

            by siriuskase ( 679431 )
            They can contract out the janitorial work, just like most other companies.

            • Re:Cooperative (Score:3, Insightful)

              by shmlco ( 594907 )
              So? In any organization there are "scut" jobs that no one wants. Look at the problems Open Source often has with maintenance and bug fixes, as most developers would rather be implementing new features than fixing old ones.

        • Re:Cooperative (Score:4, Insightful)

          by automatix ( 664568 ) on Saturday August 12, 2006 @11:45PM (#15896868) Homepage
          Fonterra [fonterra.com] is the world's largest dairy company, and its a producer's co-operative. Now, the producers (farmers) own 100% of the Fonterra shares, and they're also the company's suppliers. A co-operative doesn't neccessarily mean everyone is equal, just that everyone is an owner/stakeholder and that the company acts in their collective interests. In which case co-op's can scale.

  • With a vote? (Score:4, Insightful)

    by MarkByers ( 770551 ) on Saturday August 12, 2006 @09:43PM (#15896455) Homepage Journal
    You mean a direct democracy? In a democracy the majority tries to take privileges away from the minorities for their own advantage. This works OK for countries where it is very difficult to leave but it's hardly a good way to run a company. A company is supposed to be a team that works together. The people that get taken advantage of can easily quit and then you end up with a smaller company with the same problem.

    • Re:With a vote? (Score:3, Insightful)

      by Billly Gates ( 198444 )
      Then if the upper guys quit (The ones the average worker will take advantage of) then it will no longer serve the average employee and it would hurt them.

      Unless of course you think the average worker is not qualified to make such decisions and they can shoot themselves in the foot?

      Yeah your supposed to work together as a team but guys with clipboards and 4 function calculators have no bussiness telling MBA educated CEO's and board of directors business decisions. Apearently this is whats happening and many

      • Re:With a vote? (Score:3, Insightful)

        by shmlco ( 594907 )
        "... wall street punishing Sun..."

        Oh please. The people at Sun made decisions as to what products they wanted to make, how they were going to develop and market them, and what price points they were going to hit. Tens of thousands of people in other companies examined those decisions and decided if those products and that direction was right for them, and purchased accordingly.

        Know what? They guessed wrong. People didn't want expensive, proprietary OS's (Solaris) and expensive, proprietary hardware (Sparc)
  • I'm trying to start off from as simple as possible(hence the plain webpage).

    Five bucks says he used Vi to make the whole thing.

  • Who's neck? (Score:2, Interesting)

    by karearea ( 234997 )
    It would take a big shift. Too many people think in terms of who's neck is on the line, they like to think of the board of directors or the CEO or the team manager.

    Let's not knock communism, like all political ideologies it has it's faults, and the common flaw with most systems is the abuse of power. Even democracy has it's abuses .. the 'great democracy of the west' has what seems to be leaders passing jobs to friends, companies providing campaign contributions to ensure that demcoracy works.

    • Re:Who's neck? (Score:2, Informative)

      by thethibs ( 882667 )

      We don't need to knock communism—it does a great job of knocking itself.

      I know they don't teach history in CS streams, but look it up. Communism has failed everywhere it has been tried, in spite of using force to keep everybody inside. You don't see a whole lot of American refugees lining up to become Cuban citizens. Ask your parents about the Aquarian 60's and the thousands of communes that formed in the US and Canada and lasted about two weeks before the cooperative spirit waned.

      Business organi

      • The approving of management's proposals sounds an awful lot like what stockholders of privately held companies do too. Communism is great, if (and only if) all the members have a strong sense of loyalty to the unit. Families, some religious organizations, and a few small corporations operate very successfully in a communistic environment. Scaling it up to anything larger usually results in chaos and loss.
  • Isn't this called a publicly traded company?
    • except the way most corp. charters read it make a mockery of shareholding as ownership. Usually the board can have their way with the stock holders and screw them in a legally acceptable manner.
      • It's not so much the corporate charters, as the ambivolence of most shareholders of their holdings. Most mutual fund holders have no idea what companies they hold and as a result don't even realize that they (collectivly) could have substantial influence on management. Happily in a market based society, everything usually works like a pendulum so you'll likely see an era similar to the 1980s where corporate raiders send poor management teams packing. Ironic that the bad boys of the 80s were usually doing
      • Then it is wise not to invest in those companies.

  • Use OS as byline.. free pass.. (Score:5, Insightful)

    by Tracer_Bullet82 ( 766262 ) on Saturday August 12, 2006 @09:47PM (#15896467)
    If you're asking for an organiztion where everyone has "equal" say that's just running for disaster.

    There's a valid and powerful reason for hierachy and divison of power(yeah, yeah I know it can get corrupted and all, that does not detract from my point!), because if everyone can go on willy nilly and do whatever they want, then what's to ensure something or heck anything get's done. It's get thing done.

    Anyways OP's analogy is flawed, when is in a OS project everyone has equal say?

    The project manager certainly has more say than a contributor, and there's nothing wrong with that.

    And as much as I love OS and the prevailing spirit here.. can we stop granting aticles based on it just using /bots favourite flavor of the weak?
    • Sometimes there are legal reasons for some hierarchy-- I don;t think a corporation can effectively operate without officers, for example.

      But if you have ever worked at a large company, imagine how much more productive you could be and how productive the company would be if the political issues could be avoided. Indeed at some large companies I have worked for, politics was the single largest area where energy was spent (sometimes even more than the main productivity goals).

      The political problem is the main
    • Anyways OP's analogy is flawed, when is in a OS project everyone has equal say?

      You accidentally stumbled upon the key issue.

      Open-source projects are not democracies, but meritocracies. Participants who contribute better results naturally arise as leaders and therefore enjoy playing a larger role in decisions. The things a participant needs to do to move up the chain are perfectly aligned with the results the project needs to deliver to succeed. You don't get leaders who are more interested in their succe

  • It's called a co-op (Score:3, Interesting)

    by qbzzt ( 11136 ) on Saturday August 12, 2006 @09:48PM (#15896470)
    This form of an employee owned and managed business is called a worker's cooperative http://en.wikipedia.org/wiki/Worker_cooperative [wikipedia.org]. It's a pretty old idea, which has its advantages and disadvantages.

    Many open source projects work because of

    1. A charismatic leader, such as Linus.

    2. The fact that if said leader misbehaves it's easy for even a small group of competent programmers to fork the project. This forces leaders to strive for consensus.

    #1 can happen in a co-op (or a regular business). #2 is a lot harder in a business.

  • Employee Owned Corporation (Score:3, Insightful)

    by xplenumx ( 703804 ) on Saturday August 12, 2006 @09:49PM (#15896471)
    I was under the impression that 'open source' meant that the code was freely available - not that the project had no leader or organizational structure. What I think you're dancing around though is the concept of an employee owned [wikipedia.org] company - where, in theory, the employees become the 'merciless shareholders.

  • I doubt it (Score:4, Interesting)

    by dazilla ( 647166 ) on Saturday August 12, 2006 @09:54PM (#15896483)
    Strangely enough, we tried this type of concept in running our WoW guild. It was nice at first, but as we increased in visibility, we needed people to take on specific roles, and be able to make snap decisions without consulting others. A hierarchical power structure ended up materializing despite our best efforts to keep it decentralized. Also, when we tried decision-making by polling everyone on every single issue, the decisions would take insanely long to determine. In the end, while in a perfect world an "Open-Source Business" should be implementable, I would need major convincing to believe that it could be done and maintained in our world.

  • Wars aren't won by armies praticing democracy... (Score:3, Interesting)

    by Silicon_Knight ( 66140 ) on Saturday August 12, 2006 @09:54PM (#15896484)
    Obligatory Movie Quotes:

    "Business is War" - Rising Sun
    - and -
    "We are here to preserve democracy, not to pratice it" - Crimson Tide

    I've had some pretty shitty bosses in my career, and I'm now in the process of starting my own companies. One's bringing money in, the other will get there soon.

    This is my comment(s):

    In my current 9-5 job, whenever the democratic approach, people tend to debate things over until there's nothing left to be debated. Everyone in an organization fullfills different tasks, have different qualifications and skillsets as a result. If you were to run an org with true democracy, NOTHING will get done. You would have to A) make sure that EVERYONE understands WTF that they are voting on, B) you'd get so many different variants of ideas and sorting them through and then doing voting would be a nightmare, and C) there won't be any time left over from voting and hearing everyone's ideas.

    What works best is soliciting a few ideas (have ideas bubble up to the top) then discussing a select few ideas that made it, and then having a decision made. A good leader would also justify why that decision is made (ie, I think this has merit, I"m aware of options X, Y and Z, but I'm chosing option D because of blah blah blah) and a good team should learn to stand behind the leader's decision. This of course goes both ways and assume a competant leader (which my current 9-5 job lacks, hence me heading off and starting my own business in the other 8 hours a day).

    - SK
  • Open source doesn't mean equal say in anything. I certainly don't have equal say with the kernel developers over what's going into the next version of linux, for example.
  • What you are describing is a way that businesses might *start* out, with VC money, but eventually, everyone needs to make money. Google found a way, RedHat is finding a way, SuSe is finding a way, but they are no longer "equal" once they start making a profit.

    I *do* think there is a lot to learn from the system, however. Where I work (not computer related, luxury good sales) there is no hierarchy at all. Everyone is on the same level. I *ask* to get things done, I can't order anyone. Everyone either is

  • This "article" is 40 years too late [wikipedia.org].

    You can't run a progressive business via commitee - there has to be management vision and clear direction. Even with collaborative software projects, the popular ones have some kind of management layered over them before the masses get what they come for - Wikipedia, Linux, Debian - whilst collaborative, they're all at the top level controlled by a small group of people. I'd be interested if someone could name one truly popular, non-trivial, and actively developed Open S

  • A few businesses could work something like this...rural electric and farm cooperatives, for instance. The problem is, once you grow beyond a certain size, you do need some sort of leadership to make the tough decisions.

    It's a classic catch-22. If no one is in power, nothing gets decided. If the leaders rule with an iron fist and absolutely refuse to listen to the underlings, they can run the business into the ground. I think the best compromise is to keep businesses small. I've worked mainly for very large
  • When I think about possible economic and resource sharing agreements between monkeys, and I hear about all the capitalism, communism, and all the other isms, it strikes me that we actually have a truly different resource sharing agreement structure -- the family unit. You don't bill your son/daughter/wife/husband for the food you dole out to them.

    The hippies tried to replicate the family structure -- and that didn't work. The communists tried to do what families do -- and that didn't work. Churches try t

  • I'm not saying this to be snarky. If you haven't already been involved in starting a business with three or more people, do that first. I think it will provide a lot of insight into why it is very difficult to make distributed decisionmaking work in a for profit environment. I'm not saying that it can't be done, but there are reasons why such entities have not risen to the top of the economic heap.

  • They called it anarcho-syndicalism http://en.wikipedia.org/wiki/Anarchosyndicalism [wikipedia.org] and it was successfully done in Spain until the fascists crushed them during the spanish civil war. Also a variation was/is used in Israel on kibbutzes http://en.wikipedia.org/wiki/Kibbutz [wikipedia.org].
    • Since you went there...

      "While the kibbutzim lasted for several generations as utopian communities, most of today's kibbutzim are scarcely different from the capitalist enterprises and regular towns to which the kibbutzim were originally supposed to be alternatives."

  • Yes, but you have to RTFM (Score:4, Interesting)

    by delirium of disorder ( 701392 ) on Saturday August 12, 2006 @10:42PM (#15896629) Homepage Journal
    As other posters have mentioned, cooperatives and collectives are one option for a more free business model; there are many others. You may be interested in Anarcho-Syndicalism [wikipedia.org]. Syndicalists see labor unions as a force for revolutionary social change, replacing capitalism and the State with a new society democratically self-managed by workers. Millions of human hours have been spent thinking about and articulating radically free economic paradigms. Your idea for an open source business is interesting, but doesn't go into much detail. You just say that it would be web based, have startup costs, and will go in whatever direction the workers want. It's not a bad idea, but if you and anyone who reads your "plan" are serious, then you should look at the history of nonhierarchical organizations and learn from the theories, failures, and successes of the past. After you develop stronger ideas about how to create democracy in the workplace, you should create a more concrete plan.
    • While no one can discount the successes and progress early labor unions gained their workers, all too many of those unions became power structures in their own right, and are devoted primarily to maintaining that power base. Unfortunately, maintaining that power, and ensuring the collection of "dues", requires that they continue to justify their existence, usually in the form of demanding ever higher saleries and benefits for their members.

      The problem, of course, is that you can only vote yourselves bread a

  • Name an open source project run this way (Score:4, Interesting)

    by clymere ( 605769 ) on Saturday August 12, 2006 @10:42PM (#15896631) Homepage

    It says something that the most succesful open source projects tend to be run on a model almost identical to a typical corporation. I believe Linus refers to it as the "benevolent dictator" model.

    What the poster is describing is nothing less than mob rule. Theres a certain amount of this to all open source projects, but you'll find almost all have a small group of people ultimately making the decision about what direction to take. And of course if they make enough bad decisions, a portion of their developers can always create a fork

    If anything, its the pirate form of democracy. Everyone gets their say, the captain makes the final decision, and if makes enough bad ones, they vote in a new captain.

    • One big difference is that Free Software developers have a lot more freedom to speak their mind. Whilst one person might make the decisions, discussions can take place that would never be able to take place in a company where people have to be afraid of losing their job.
  • Business Plans improve (mostly) with extra folks.

    Execution fails (mostly, the coop post contains great counter-examples) with extra folks.

    Perhaps the sufficient part of this OS Business concept should be the businss idea and plan itself. We could work out a sustainable business model that would allow for differentiation in services/products or price, and so on.

    An example of a market that can sustain this level of competition is health care. Differentiation in that sector invites regulatory scruntiny. So ho
  • Open Source projects are not based on everybody deciding about everything. They are based on merit. All decisions are done by a handfull of people that proved that they have the skills to do the best decisions. Of course, all of it depends on the project creator(s) being able to share his power and being able to understand which contributors should have a say for the well being of the project. Not much different from a healthy "closed-source" company. And as much as there are unhealthy "closed-source" compa
  • "There isn't any limit on how many people can be involved (the more the better, in fact) as long as they can be useful. Could this be the way of the future?"

    It's not too likely. One reason that corporations in the US and similar economies operate the way they do is that the law structures companies to operate that way at least shareholder held companies - companies that are owned by an individual can operate in all sorts of ways. Of course, you always have the option of forming one of these theoretical "ope
  • Employee owned company

    The largest publicly traded one I know of offhand is SAIC (http://www.saic.com/empown/)
  • ... a company that has its direction dictated by all of the members that run it ...

    Open Source works because it is usually subsidized. Volunteers donating their time, academics who have the freedom to work on what interests them, corporations who sponsor some project, etc. If you can find someone to subsidize your open source firm them you might be successful. Otherwise you will most likely fail like any other poorly run firm. Your post suggest that you do not realize that investors and bosses are roles

    • Open Source works because it is usually subsidized. Volunteers donating their time, academics who have the freedom to work on what interests them, corporations who sponsor some project, etc. If you can find someone to subsidize your open source firm them you might be successful. Otherwise you will most likely fail like any other poorly run firm. Your post suggest that you do not realize that investors and bosses are roles that have developed, evolved, over time because that has proven successful. Business c
  • Despite the (inevitable) flood of naysayer in this thread who will of course say that's impossible for a company to run without the expected overpaid stuffed shirt figureheads, there is in fact at least one very successful example of a democratically run company. The company is called Semco.

    You can read an interview with the man responsible for the companies transformation (Ricardo Semler) on CNN here: http://ask.slashdot.org/comments.pl?threshold=1&mo de=nested&commentsort=3&sid=193884&op= [slashdot.org]
  • It sounds like a wonderful idea.

    As an initial dry run, let me suggest that you get together with 15 of your closest friends and see how long it takes to decide where to have lunch.

    I predict one of two results:

    1. One or two strong personalities take over and make a decision, or

    2. You take longer deciding where to eat lunch than actually eating lunch.

    In contrast, in my company (which I happen to be the boss of) I decide where to have our weekly lunch. It therefore takes 30 seconds. Other people get input
  • Just because orange juice is good at slaking my thirst doesn't make it a good choice for engine coolant. Or blood.

    Having too many people involved in decisions is the best way for a company to kill its self. When you say "There isn't any limit on how many people can be involved (the more the better, in fact)" you destroy yourself. The more people you have, the more input that needs to be processed, and you quickly reach the Productivity Event Horizon where no one can do any work because they're constantly
  • One method for breaking down the formal hierarchy is to decentralize. Bruce Sterling gives an example in Islands In The Net [wikipedia.org]. For a more socialistic example, the 'Aztlan/El Paso' chapter in Strieber and Kunetka's Warday [wikipedia.org].

    A current example is the content production end of the US film industry, where a number of nominally independent contractors pull together to create a film, then break after the wrap, until someone pulls them together for another project. Granted, the components aren't equal (ie. the producer
  • If you have never worked for someone that believed in this, you are excused. It is truely a revelation. This isn't what the original question is asking, but it is close enough to be scary.

    In a management by concensus environment, you sit everyone down for decisions and everyone gets to have their say. Until everyone agrees on a direction, nothing is decided. If a concensus cannot be reached, it must mean that the whole direction is wrong, so you move up a level and look at earlier higher-level decisions
  • "In a world where people slave away for the sole profit of a board of directors and merciless shareholders..."

    Uber-parent, downmod, flamebait.

  • I am the Sr. Warden of my Episcopal Church. I think we do a better job of following an open source model than you might think. If someone wants to work with the Sunday School or rewrite the policies for the hourly employees, we have a process. That process is not a top-down business process. Our goal is to empower and support anyone who wants to contribute with some safety checks in there before it becomes policy. This seems similar to the way that open source projects are managed.

    We are all volunteers afte

  • Have a look at the Envolution project. The company involved tried to conceal access to both source and binaries for GPL software behind a subscription fee. They're not doing business anymore.

    I think there was an alternative firmware for the Linksys WRT54G that did more-or-less the same thing.

  • If a small tweak to the startup fee structure were made this could be quite lucrative for all us.

    Right now there is a 25 euro signup fee that goes straight into the company coffers. That just doesn't make me feel motivated enough to go out and get the amount of new people to join the venture in order to make it succeed. Now with the following small tweak, we could reward people for signing up coworkers. We will start with a list of 7 unique people.

    nightowl03d
    nightowl
    niteowl
    notnightowl03d
    not really n

  • I agree with many of the above comments. I think it's a good idea on paper, but a business needs to have direction and leadership in order to steer it in some direction. Can you imagine a ship where the navigation was done via majority rule? It wouldn't work.

    I wish the OP luck in his/her business and will gladly admit closed-mindedness should this succeed, however, I predict the business will either quickly move away from this model for core decisions or fail from inertia of having to come to a consensus

  • Yeah, but... (Score:2, Insightful)

    by rickb928 ( 945187 )
    ..TFA makes this assertion:

    "In a world where people slave away for the sole profit of a board of directors and merciless shareholders"

    Um, I work for a large, and very recognizable corporation, and I don't slave away for the sole profit of the board of directors nor merciless shareholders, or even an overpaid criminal CEO.

    I get paid. And after my expenses are paid, I have a modest profit to show for my efforts. So do all of my coworkers, worldwide.

    And most corporations function the same way.

  • Linux (Score:3)

    by Millenniumman ( 924859 ) on Sunday August 13, 2006 @12:26AM (#15897029)
    The Linux project, one of the more important OSS projects, is a "benevolent dictatorship". "An organization where everyone has an equal say in what goes on", indeed.

    That bit about people slaving away for stockholder profits is also nonsense. Unless they are really dedicated, they are doing it for pay and/or their own satisfaction.
  • Read "Ecotopia" by Ernest Callenbach. Carefully. Ignore the insipid embedded love story and concentrate on the socio-political ideas presented in the book. When you're done with it, go back and read it again. Then think of a world where all businesses are employee-owned.

  • Brazil is ahead of the rest of the world... (Score:3, Interesting)

    by Futurepower(R) ( 558542 ) on Sunday August 13, 2006 @01:51AM (#15897235) Homepage
    As usual, Brazil is ahead of the rest of the world in social things. Ricardo Semler has been doing open source business for 20 years, as Chief Happiness Officer. Here's a review [inc.com] of his book, The Seven-Day Weekend: Changing the Way Work Works [amazon.com]. Some people are extremely enthusiastic about Semler's ideas: He's my idol [positivesharing.com].

    Normal CEO's are Chief Unhappiness Officers [motherjones.com]. They steal everything they can, and act out their anger toward everyone they can.

    One of the most important examples of a business run in an adversarial way is Microsoft, of course. After all this time, major media outlets are starting to get it right. Here are quotes from the CNN article Microsoft security--no more second chances? [com.com]:

    "By now, Chertoff's people must be thoroughly frustrated that Microsoft still turns out poorly designed products."

    "Here's something to consider: If bridge builders or airplane designers applied the same standards to their labors, do you believe that the public would so easily forgive the regularity with which bridges would collapse and airliners fall out of the sky?"

    If you like the CNN article, don't forget to D I G G it.
    • As usual, Brazil is ahead of the rest of the world in social things. By this comment, I'm assuming you live in Brazil. I've lived in several countries and find sometimes things can be seen more clearly from a distance. From my outsiders' point of view, Brazil doesn't look like it's ahead of the rest of the world, socially; with a flourishing market in bullet-proof cars, it looks like a bigger mess than I'd ever care to live in.
  • The vast majority of posts seem to accept the premise that the application of open source to other (non-software?) businesses means a non-hierarchical, cooperative type of organization. Open source projects still have some command and control, although anyone (by definition) is free to "fork". And, before anyone flames me, I'm not saying open source projects are organized in the same fashion as large corporate bureaucracies.

    But the non-software analogy of an open-source business or project would be one
  • Your influence in free software depends on many things, such as the quantity and quality of your contributions, and your communication and people skills.

  • Consider management by prediction market... (Score:3, Interesting)

    by Money for Nothin' ( 754763 ) on Sunday August 13, 2006 @01:34PM (#15898677)
    Time had an article titled "The End of Management?" [time.com] a while back, in which they discussed companies which had successfully used internal prediction markets (among their employees) to make company-wide decisions. HP and BP were cited as examples.

    As it turned out, they were finding empirically-better sucecss using these markets than they were with using their layers upon layers of bureaucratic, 20th-century-style management.

    Frankly, I don't think management will ever go away *completely*; who else is going to create the items in the market upon which employees will bid? So on that note, I do think Time's title is a little over-zealous.

    But at the same time, I do think such markets can be a force for flattening organizational hierarchy and reducing management headcount. And as more companies become enlightened to the idea of prediction markets -- rather than just mere internal polls, which, unlike a market, have no serious, direct incentive to make a correct decision -- they will turn to such markets instead of middle-managers, who tend to have been promoted into management because they are technically-incompetent and/or are better than other people at dressing well and kissing ass.

    The "people's revolution", if there is ever to be one, will (in usual paradoxical economic form) probably not come at the hands of a communist dictator or a starry-eyed Euro-socialist, but rather, in the back rooms of corporate America.

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