Exit to Community

Now We Know: Exit to Community Is Possible

Anonymous — Wed, 03 Jan 2024 19:08:47 +0000

Now We Know: Exit to Community Is Possible Anonymous (not verified) Wed, 01/03/2024 - 12:08

Back in 2019, I made a plea: “Startups Need a New Option: Exit to Community.” In some circles, at least, the argument quickly caught on. This is because, for startup companies, an exit through an acquisition or public offering is the goal that all else points toward. It is the payoff for founders, investors, and early employees. I contended that the roots of the exit as we know it are rotten. Exits turn companies into commodities, and exits often turn those companies against the people who rely on them most. We need a different kind of exit that is just and accountable, an exit to community.

As the E2C meme first spread, I heard from founders and others looking to do a community exit themselves. But I didn’t have a model or a blueprint to offer—just a vision and a story that I hoped we could learn to tell together.

To develop the idea, I teamed up with my longtime collaborator Danny Spitzberg. Years before, we had tried to turn Twitter toward community ownership, with a provocative shareholder proposal that appeared on the company’s 2017 ballot and made news worldwide. (If we had won, perhaps Twitter would still exist.) In early 2020, we started an E2C webinar series and joined with Zebras Unite to run a cohort program for founders interested in the idea. We published a zine and a trailer video, and E2C was featured in a special on PBS. Danny also co-founded the Exit to Community Collective, a group of journalists, marketers, stakeholder engagement specialists, and academics working to advance E2C in practice. In the years since, we have quietly supported and learned from a variety of experiments, helping entrepreneurs push the limits of what is possible. Memes, we believe, will only take us as far as they are backed up by the hard work of courageous pioneers.

As a new year arrives, I am thrilled to announce the release of a new library of E2C stories that the E2C Collective has created at E2C.how. Our “snapshots” are brief, structured case studies that give a taste of the many diverse ways that startups have been trying to grow into community ownership and governance, albeit with mixed results.

The snapshots range from my babyֱ��app neighbors Namaste Solar and Trident bookstore, which converted to employee ownership, to major open-source software projects like Debian and Python, which are mini-democracies accountable to their developers. There is NIO, a Chinese electric car company whose founder set aside a chunk of stock for car-buyers, and Defector Media, a co-op founded by employees who quit their previous job in protest. There are also blockchain-based efforts, like Gitcoin and SongADAO, that have tried to make good on a new technology’s often-betrayed promises for making a more inclusive economy.

I have taken two main lessons from these snapshots so far.

1. There is widespread craving for a better kind of exit—and the creativity to back it up. Entrepreneurs, investors, users, and workers alike are all recognizing the need for a new approach, and they are trying lots of different ways to get it. They are relying on old technology and the latest innovations. They are using many different legal structures and techniques for empowering communities. The resourcefulness is pretty astonishing, really.

2. Better exits need to be easier—and this will require structural change. In just about every case, E2C attempts have faced profound challenges. They are often working at the very edge of what the law allows, because many of our laws were written to serve profit-seeking investors, not communities. Much of what communities wanted was simply not possible. Truly changing the landscape of exits will mean policy change that takes communities seriously as sources of innovation and accountability.

I want to stress this second point. It first became clear to me when working with collaborators at Zebras Unite on the idea of turning Meetup into a user-owned cooperative. The founder wanted it. The business model made perfect sense—a rare platform whose users actually pay for it. The company was up for a fire sale. But we simply could not find investors or lenders prepared to back a deal like that. This is a problem I have seen with many other co-op efforts, over and over. Policy is the most powerful shaping force for where capital can aggregate, and there is no adequate policy to support capital for large-scale community ownership. This is also the reason we have lost many community-owned companies in recent years, from New Belgium Brewing to Mountain Equipment Co-op—the most successful community-owned companies too often can’t access the capital they need to flourish.

I’ve seen the same pattern repeat itself with blockchains, where the E2C idea has taken hold more than anywhere. Blockchains can enable organizations that are collectively owned and governed by their users, and millions of people have been attracted by possibility. But what has happened in practice? Any time a new project started gaining traction, it would become drowned in investment from the same venture-capital firms that fueled earlier kinds of startups. The driving force became not the tech or the communities but the investors, once again.

This pattern is not inevitable. History has demonstrated that, with the right policy in place, large-scale capital access for community ownership is possible. That’s what happened after 1936, when the US government passed the Rural Electrification Act; thanks to a (revenue positive!) loan program at the Department of Agriculture, cooperatives now operate nuclear power plants and deliver high-speed Internet in once-underserved areas. In 1974, a relatively small change to the federal tax code unleashed the employee stock ownership plan, or ESOP, which has enabled millions of workers to become co-owners of the companies where they work.

Today, most policy that governs taxation and finance is built on the assumption that investor profits at all costs is the norm and the ideal. As Marjorie Kelly powerfully argues, this assumption is intolerable. We need to demand changes that reorder how capital is able to be organized and deployed. These changes can be relatively small to make a difference—tweaks to tax codes and securities laws, for instance—and they can win support from diverse constituencies.

Too often, I have come to believe, advocates of cooperatives and community ownership have put their energy downstream of the real policy problems. They focus on gaining access to small loan funds and technical assistance for small companies. But they neglect the upstream challenge of exits—and other endgames for the most successful companies in the economy.

Unless we change the options available at the highest levels, any gains that communities make for early-stage companies can be erased once companies grow and need capital at the highest levels. On the other hand, when community ownership flourishes at large scales, that’s an attractor — something the whole rest of the economy can start moving toward.

Rather than fighting over crumbs, advocates of community ownership should be asking: What change will we win for community ownership that does for future generations what our predecessors won for us? Historically, major structural change for community ownership has involved a three-step process.

First, the experiments: creative, path-breaking people demonstrate the need and the possibility of something better. This is where E2C is right now, and our snapshots portray that experimentation beautifully. Now we need to learn from those experiments, identifying what works and where the barriers lie.

Second, the policy: Here’s when we build on the experiments, which hint at what is possible, and try to break down the biggest barriers in the way of unleashing babyֱ��app justice. We assemble broad coalitions to advocate for achievable change, grounding our stories in the experiences of people who need change the most. And we win.

Third, the practice: Policy is only the beginning. What matters more is what we do with it. Here, we need to grow our movements and our culture to use the new policy in the best ways, and we watch out for those who want to exploit our policy—as any policy can be exploited. We spread, and community ownership becomes a new normal.

I have hunches about the kinds of policy E2C needs, but above all I am interested in learning from a shared conversation. What paths should we be organizing around? The tax code? Public loan guarantees? Securities exemptions? What would have the greatest effect for community ownership at the most achievable political cost?

Four years after first calling for E2C, I have become more convinced than ever that focusing on the exit—the goals the economy sets, not just its entry-points—is the right place to be. I hope more people recognize how vital it is to rethink what startups aim for.

Meanwhile, I am grateful for all those who have worked together to make this new phase possible through the E2C Collective. That includes, currently, Hazel Devjani, Adina Glickstein, Valentine Erokhin, Nanz Nair, Marisa Rando, Sheba Rivera, and Eli Zeger. Danny Spitzberg kept the Collective moving when no one else did and. The team is continuing to create resources and support teams exploring their own community exits. These people are weaving a fairer kind of economy into being. Please consider supporting their work through Open Collective (which is also a company pursuing an E2C).

I published my initial call to “exit to community” here because Hacker Noon is a babyֱ��app-based, family-led company; it used an equity crowdfunding campaign to remain independent of conventional venture-capital pressures. Now it is one of our snapshots. Everyone doing E2C today has had to go against the grain of mainstream startup culture, facing unique challenges as a result. Someday, I hope that what Hacker Noon and others have struggled to do will be easier, that building with and for community will be the obvious thing to do. This, we now know, is possible.

Artwork by Marcos Osorio, via Stocksy, a worker-owned co-op. This article first appeared at Hacker Noon.

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Where I Went Wrong: Marjorie Kelly on Why Advancing Ethical Business Isn't Enough

Anonymous — Tue, 19 Sep 2023 22:00:18 +0000

Where I Went Wrong: Marjorie Kelly on Why Advancing Ethical Business Isn't Enough Anonymous (not verified) Tue, 09/19/2023 - 16:00

October 30, 2023
11 a.m. to noon Mountain Time
Free webinar

Watch recording

For over 30 years, Marjorie Kelly has helped to build movements like ethical investing, corporate social responsibility (CSR), B Corps, and worker ownership. While these fields have grown, however, many of the problems they set out to fix have only gotten worse. By tucking ethical concerns into the current paradigm, she believes, well-meaning people have inadvertently reinforced that paradigm—or we’ve stayed isolated in our silos, reluctant to see ourselves as part of unified next system beyond capitalism. We haven’t been thinking big enough. We’re not thinking at the scale of the problem.

In this webinar, Kelly draws on the lessons of her career—including her mistakes—to call for a movement that refuses to take the current system for granted.

Kelly's new book, Wealth Supremacy: How the Extractive Economy and the Biased Rules of Capitalism Drive Today’s Crises, stresses that the real problem is not a lack of alternatives, it is a system intricately designed to keep the wealthy prosperous and protected—a system biased toward wealth holders. Changing this requires having difficult conversations. But Kelly says it’s time for those conversations. Without a change of mindset, technical solutions and innovative models will never add up to the new system now necessary to our survival. And much of what we build will continue to be devoured.

Marjorie Kelly is Distinguished Senior Fellow with The Democracy Collaborative. Her previous books include The Making of a Democratic Economy (co-authored with Ted Howard), Owning Our Future: The Emerging Ownership Revolution, and The Divine Right of Capital. Kelly has for years been a thought leader in next generation enterprise design, employee ownership, impact investing, and the building of a community-rooted democratic economy. Previously she was a Fellow at the Tellus Institute and cofounder/president of Business Ethics magazine.

This webinar is moderated by Nathan Schneider and hosted by the Media Economies Design Lab at the University of babyֱ��app Boulder.

October 30, 2023, 11 a.m. to noon Mountain Time. In this webinar, Kelly draws on the lessons of her career—including her mistakes—to call for a movement that refuses to take the current system for granted.

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Introducing the Exit to Community Collective

Anonymous — Thu, 17 Feb 2022 04:43:32 +0000

Introducing the Exit to Community Collective Anonymous (not verified) Wed, 02/16/2022 - 21:43

Jack Yates

The Exit to Community Collective (E2CC) is working to further the implementation of Exit to Community (E2C) initiatives—efforts to enable startups and other organizations to evolve toward ownership and control by their closest stakeholders. Since 2019, MEDLab has been advancing the E2C idea, particularly in collaboration with Zebras Unite. The E2CC is a new organization forming to continue this work by cultivating and spreading knowledge of the E2C concept and implementations of it.

The E2CC is a worker-managed collective formed through a virtual legal structure. With the platform Open Collective, which is itself exploring an E2C process, the E2CC is fiscally sponsored and manages its finances publicly and transparently. This reduces the barriers to formation that might come with being legally incorporated.

E2CC is involved in several parallel projects. One is a tool that aims to provide an introduction on what E2C is and how it can proceed, serving as a starting point for founders on how they can get started in implementing their Exit to Community. It is designed around common questions and conversations about key decision points that organizations face.

A series of eighteen case studies is in development to provide tangible examples of how an E2C works in practice. These are being written to be brief and accessible. Examples include diverse startups, including and blockchain initiatives, and they are tagged in order to draw connections among them. We hope that these cases can show the variety of forms E2C can take and help speed the process from conception to implementation. The collective is also in the process of creating a series of long-form narratives to provide a more detailed look at the implementation of an E2C example.

In the coming months, these and more resources will be available online. We hope they will be a significant step toward making community ownership more widespread. In the meantime, explore existing resources at e2c.how.

In summary, we’re learning what resources can help advance the vision of E2C—what makes shared ownership more accessible.

Are you exploring or experimenting with community ownership? Want to add your E2C story and see others? Get in touch!

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A New Option for the Startups We Love—the E2C video

Anonymous — Tue, 29 Jun 2021 17:30:56 +0000

A New Option for the Startups We Love—the E2C video Anonymous (not verified) Tue, 06/29/2021 - 11:30

[video:https://www.youtube.com/watch?v=IdwzoJhD9aQ]

Getting acquired or going public often pits startup founders and investors against the health of their community. We believe businesses need a new option with long-term benefits for all: an "Exit to Community." Start your E2C journey at https://www.e2c.how.

Thanks to those who came together to make this happen: narrator Lauren Ruffin, director and producer Danny Spitzberg, and editor Molly Mary O'Brien.

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Exit to Community: Two Startup Journeys to User-Ownership

Anonymous — Fri, 30 Apr 2021 06:00:00 +0000

Exit to Community: Two Startup Journeys to User-Ownership Anonymous (not verified) Fri, 04/30/2021 - 00:00

May 12, 2021
9 a.m. Mountain Time
Boulder Startup Week webinar

Watch Collaborative notes

How can startups transition from community engagement to community ownership? This session features two startups that are figuring it out. Hacker Noon, a tech publishing platform based in rural babyֱ��app, moved from Medium to its own software thanks to a $1 million equity crowdfunding campaign. Groupmuse, a platform for organizing classical-music performances, is in the process of converting to a worker cooperative—and exploring how to include its musician community, too. Participants will come away with lessons from each "Exit to Community" journey.

Facilitator: Danny Spitzberg (MEDLab community fellow)
Kyle Schmolze (Groupmuse)
Linh Smooke (Hacker Noon)

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Exit to Community: Designing Crypto for Social Good

Anonymous — Fri, 16 Apr 2021 16:48:03 +0000

Exit to Community: Designing Crypto for Social Good Anonymous (not verified) Fri, 04/16/2021 - 10:48

Thursday, April 29, 2021
10-11 a.m. Mountain Time
Free webinar

Watch Notes

As blockchain and cryptocurrency takes another step toward mainstream adoption—think Bitcoin, NFTs, and Coinbase—communities are questioning conventional babyֱ��app models, and exploring how this technology can enable new alternatives.

This webinar will feature blockchain platforms designing solutions that empower communities to define value and exchange on their own terms. The speakers will discuss why and how blockchain technology can be an effective tool for storing and transferring community value, and how it can be used to disrupt and rebuild more functional, human economies, whether for local place-based cities or across remote digital communities. The discussion will also include a practical deep-dive, and help tactically explain how other communities can learn and develop their own projects.

Guest Facilitator: Nicole d'Avis (Enid Co.)
Julio Linares (Circles UBI)
Karla Córdoba-Brenes (Cambiatus)

Sponsored by the Media Enterprise Design Lab at CU Boulder and Zebras Unite.

Image via Cambiatus.com.

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Exit to Community: Emerging Crypto

Anonymous — Mon, 01 Feb 2021 22:09:37 +0000

Exit to Community: Emerging Crypto Anonymous (not verified) Mon, 02/01/2021 - 15:09

Friday, February 26, 2021
2-3:30 p.m. Mountain Time
Free webinar

Watch Collaborative Notes

New blockchain-based tokens offer tantalizing possibilities for community ownership. Can these innovations make it easier for startups to become owned by their core stakeholders, in an "ownership economy"?

In this webinar, we'll hear from projects that are pioneering new approaches to community ownership. They are working through the challenges of both new tools and regulatory uncertainty. These pioneers will break down how their tools work, how they challenge existing norms, and how these protocols offer trustworthy and reliable solutions. Join us to discuss the opportunities and perils of using decentralized networks as a pathway to community control.

Guest facilitator: Bailey Reutzel (CoinDesk)
Joris Delanoue (Fairmint)
Bradley Miles (Roll)
Yev Muchnik (Launch Legal and jason wiener | p.c.)

Image of the Bufficorn, a mascot of the babyֱ��app crypto community—read more here.

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Meet the Exit to Community Cohort

Anonymous — Tue, 08 Dec 2020 18:02:47 +0000

Meet the Exit to Community Cohort Anonymous (not verified) Tue, 12/08/2020 - 11:02

During the fall of 2020, MEDLab and Zebras Unite organized a cohort of more than two dozen startup founders working toward an "exit to community." It was led by Sheeza Shah of Zebras Unite and MEDLab Community Fellow Danny Spitzberg. At today's public, online showcase, we heard from ten of these teams, from four continents, presenting their startups and their efforts to work toward community ownership. In addition to the event, the cohort produced a wiki on their E2C learnings.

Watch the Showcase event

Explore the wiki at E2C.how

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Exit to Community: Peer Learning Cohort

Anonymous — Wed, 02 Sep 2020 17:41:32 +0000

Exit to Community: Peer Learning Cohort Anonymous (not verified) Wed, 09/02/2020 - 11:41

Sheeza Shah Danny Spitzberg

Our next initiative is a peer learning cohort—but first, we need to hear your story so we can serve you and your community!

Fill out this survey

We're doing research because we don't know yet what people need in practice to successfully Exit to Community. Why a cohort? People told us that our E2C sessions were substantial and inspiring, but they need resources and support to make progress. We’ve described what an “Exit to Community” might look like in our new zine and this introductory article, but there are no real good case studies—not yet.

This peer learning cohort is our way of organizing what we hope is just enough skills, material, and more for a group to make progress towards an Exit to Community.

More broadly, we’ve seen calls for babyֱ��app justice reach more corners of society, even over the past year of E2C sessions. Startup founders are curious about how to align their companies with the communities they set out to serve. However, democratizing company ownership isn’t easy: the startup ecosystem—the investment models, accelerator cultures, and ambition of a profit-maximizing “exit” by acquisition or IPO—tends to work in the opposite direction. Since November 2019, we've been testing out a new strategy, which we call “Exit to Community” (E2C) and along the way, dozens of startups have inquired about getting deeper support to move further toward an E2C option. In response to this, we're organizing an E2C peer learning cohort to build skills and capacity required for a transition to community ownership. This has been a truly moving organizing effort with Zebras Unite and the MEDLab. But, again, we need more.

We are planning this cohort as a 10-week session, starting in October. It includes peer learning, mentor support, and resources across our broad community and network to help startups make progress. It will likely be covered by scholarships. We’re doing this because each group of cofounders considering an Exit to Community has a unique situation with their community users, workers, owners, and other stakeholders. While there are many startups trying to make progress, there is no single case study or model. People continue to ask us for help, and this is our best answer. But we need to work together to learn what skills and resources are truly required for a transition to community ownership.

Help us design a cohort that serves our broader community, including you, by sharing your story in this simple 5-minute survey. We’ll review responses until September 21, so please fill in the survey ASAP.

Share your story to help shape our cohort

Thank you in advance for your help! Take the survey and we'll thank you with shout-outs, too. And hopefully we’ll have a cohort program you’ll want to join.

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Exit to Community: A Community Primer

Anonymous — Mon, 31 Aug 2020 06:00:00 +0000

Exit to Community: A Community Primer Anonymous (not verified) Mon, 08/31/2020 - 00:00

Malene Alleyne Camille Canon Amelia Evans Yichen Feng Nathan Schneider Mara Zepeda

DOWNLOAD: SCREEN / BOOKLET

What is a startup for? Who are startups for?

The usual answers begin sounding strange the more you think about them. A startup is kind of like a child, some say. Founders pour themselves and their resources and energy into the thing—but then, unlike a child, they sell it off to the highest bidders. A lot of founders would love to change the world for the better, right? But the usual endgame—the "exit"—for a successful startup is how many of their creations end up getting bought by bigger, old-world companies or going public on the grand-old establishmentarian casino, the stock market. Why do we even bother?

Exit to Community (E2C) is a strategy in the making. It's a different kind of story, one that connects the founders, workers, users, investors, activists, and friends who have been trying to feel their way toward a better kind of startup. Its endgame is to be a long-term asset for its community, co-owned and co-governed by those who give it life.

We wrote this because we want to make E2C easier, and we hope you'll join us, because we need your help. Here, we've tried to put together some ideas and examples of what E2C could mean, based on what is out there and what is in our hearts. But little of this will really work unless a whole lot of us team up to fill in the blanks.

What others are saying

"We need new stories & potential paths and this is one I am excited about."—Sarah Drinkwater, Omidyar Network
"Community ownership and governance of technology platforms is a big part of the movement towards a more humane future."—Tristan Harris, Center for Humane Technology
"The optimal governance structure for early-stage projects is founder dictatorship. The optimal governance structure for mature projects has large user/stakeholder involvement. 'Exit to community' continues to be underrated as a way to get both."—Vitalik Buterin, Ethereum Foundation
"a potential blueprint for how to prioritize sustainability and profitability while exploring alternative financing models for startups"—Cherie Hu, Water and Music
"[E2C] explores ways to help startups transition investor-owned to community ownership, which could include users, customers, workers or some combination of all stakeholders."—Megan Rose Dickey, "There’s a growing movement where startup founders look to exit to community," TechCrunch (August 31, 2020)

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