An Applied R&D Lab Serving Solo and Family-based Entrepreneurs
Sohodojo – 'War College' of the Small Is Good Business Revolution
Cross-Sector Partnerships: New Perspectives in
|This was our third on-line conference hosted by iCohere, and our first as a presenter. The iCohere platform doesn't get in the way of learning and social networking. And since the conference site stays on-line for months after the real-time event is history, it has an added value that can't be matched by traditional, physical space conferences.|
The post-presentation discussion was primed with a few provocative questions to stimulate the conversation:
The following is a transcript of the conversation in response to our presentation.
You raised many important points about the personal, community and social level-how do we interact and what roles do the sectors play in society at large?
You asked a key question about whether non-profits feed off the scraps of capitalism. We could ask from a flip side - Does the existence of the service sector make it possible for the for-profit sector to succeed? Many of the services non-profits provide are not effectively delivered in a for profit model; as long as we have kids, old people, disabled people etc. we are going to need organizations that serve and empower them. My own perspective is that when the sectors work congruently - government, business and social - we have a chance to solve problems but no one sector can do it alone.
Cross-sector collaboration is one way to make it work. Social entrepreneurism is another- doing good and doing well at the same time.
Your examples illustrate that our personal choices have an impact, and if we are to collectively work for change, we need to generate ideas and stand behind them - live them and create powerful examples ourselves. Another of today's presenters, Jared Polis, who devoted money he earned as an Internet pioneer with BlueMountain, into education and community projects, is an example of someone who does that. I am sure he could have found other things to do besides serve on the Colorado Board of Education, but what a message his presence there sends!
From a personal view, my portfolio overflows! I too have chosen the "small" route, but this global network that connects the things I do seems anything but small! I've found that for me, an eclectic mix of business, education, arts and community development keeps the right and left sides of my brain in full working order. I could look at my approach as "Robin Hood" since I make money on one side and that allows me to be more generous with my time as a volunteer. But the model is more about cross-pollination- I take what I learn working with a community organization into an arts organization into a class where I am working with people learning to lead organizations and the circle keeps going. I want to encourage others to find the links and enlarge their circles - to gain more meaning personally while they contribute to the greater good.
Wired.org Conference Producer and Chair, and
Boulder, CO USA
First, Janet, thank you for the tremendous effort you made pulling together and chairing this conference, and thank you on behalf of Sohodojo and the North American Rural Futures Institute for inviting us to present our vision for cross-sector partnerships and social entrepreneurism. Speaking familially (Wired.org Conference Chair Janet is Sohodojo Jim's cousin), we have always admired you for how you have lived life on your own terms, and for the benefit of others.
Janet posited (emphasis added):
"You asked a key question about whether non-profits feed off the scraps of capitalism. We could ask from a flip side - Does the existence of the service sector make it possible for the for-profit sector to succeed? Many of the services non-profits provide are not effectively delivered in a for profit model; as long as we have kids, old people, disabled people etc. we are going to need organizations that serve and empower them. My own perspective is that when the sectors work congruently - government, business and social - we have a chance to solve problems but no one sector can do it alone."
That's an interesting perspective. But we believe this perspective misses an important point: The dialectic of the motive forces underlying capitalism - that is, the complementary opposition of the Big Is Good and the Small Is Good world views - cut across the sector distinction. The implications of this distinction impact your conclusion about the role of profits and non-profits, and the locus of where we will find solutions. Let us explain.
We could flip your flip-side question and restate it in the context of our "capitalism as a two-cylinder engine" metaphor - "Can't we just tune up the Big Is Good World and get good mileage with a vehicle (society) running on one cylinder?"
Our belief is that no, we can't. A two-cylinder engine running on one cylinder is inherently inefficient, and it will pollute its environment. The future of capitalism can and must be found in its metamorphosis into an engine that serves the needs of the Individual rather than the needs of the Corporation.
Some of this transformation will come from corporations behaving differently, that is, old dogs learning new tricks. But we also need some new breeds of dog, and that is where the Small Is Good Parallel Universe comes into play.
You speculated that some services are not effectively delivered in a for-profit model. We would amend that statement to say, some services are not effectively delivered in the for-profit model as practiced by the Big Is Good World. Our belief is that, once realized at a critical mass stage, the dynamic business network eco-systems of the Small Is Good World will address social needs and consumer demands in qualitatively new and different ways.
Remember, the distinction of for-profit and non-profit is strictly an organizational and accounting business decision in the Small Is Good World. The fundamental motive force in this world is the collaborative spirit and collective energy of its networks of individuals, NOT the power and resources of corporate organizations that 'wrap' these individuals for reporting and resource pooling purposes.
This locus of motive force impacts the relative importance and character of the sector distinctions that you characterized as government, business and social. As we move from the Big Is Good World into the Small Is Good World, the sector boundaries get fuzzy, and sector-dynamics are less of a constraint on who does what, how. This is largely a result of the Portfolio Lives lived by citizens of the Small Is Good World. Sure, folks live Portfolio Lives in the Big Is Good World. But their Portfolio Lives are not as liberating (nor as entrepreneurially risky) as the Portfolio Lives lived in the Small Is Good World.
Bottom line, what is at stake? If capitalism does not transform into service of the Individual - that is, if the engine of capitalism does not put that spark plug in the Small Is Good cylinder and get a tune up - there will be a catastrophic engine failure in the Big Is Good World that will result in no sector being able to effectively fulfill its role, no matter how much we want them to.
Janet concluded (emphasis added):
"I want to encourage others to find the links and enlarge their circles - to gain more meaning personally while they contribute to the greater good."
We believe the concept of the Greater Good is largely necessary as a constraint on the excesses of the Big Is Good World. We believe that when the Small Is Good Parallel Universe is fully realized, the Greater or Common Good becomes intimately fused with My Good, or what is commonly called self interest.
The Small Is Good World is not just about size and growth styles of organizations. It's not just about a new class of 'kinder, gentler' entrepreneurs seeking adequate, distributed wealth creation rather than the accumulation of excess wealth for a few. It's not just about new "Who, How and Why" markets that stimulate new consumer purchase decision dynamics. The Small Is Good Parallel Universe is born of the Big Bang of doing all these things simultaneously and interactively.
The Small Is Good World will accomplish two things. First, within its own realm of activity, it will affect new and previously unthinkable solutions to social needs and market demands. And it's extrinsic value will be to serve as a governor or counterbalance to the self-destructive tendencies of the Big Is Good World.
The Small Is Good World will achieve this 'load-balancing' function by competing for product and service customers in an expanded market space that adds "Who, How and Why" marketplaces parallel to existing "How Much and Where" markets of the Big Is Good World. Additionally, the Small Is Good World will provide a moderating affect on its counterpart by providing an 'escape hatch' for individuals who tire of participation in the Big Is Good Rat Race.
The net effect of these intrinsic and extrinsic features is that the Small Is Good World will cause a 'right sizing' of the Big Is Good World. This is what we mean by putting a spark plug in the Small Is Good cylinder of the engine of capitalism, and getting a tune-up.
So once fully realized, how will My Interest and the Greater Good be fused into an inseparable whole? Consider this Real World example. We are working on the Chandler Guild microenterprise and small business network of soybean wax candlemakers. Candles are a $3+ BILLION a year industry in the U.S. alone. Three mega-corporations control 80% of the marketplace. The largest factory under one roof in the U.S. is a candle factory.
The Chandler Guild will be a major player in the candle industry. We will do this by creating a virtual candle 'factory' that will be realized as a decentralized and distributed network of solo, family-based and small candle businesses. We'll capture a significant share of the candle market by developing a story-driven, game-oriented commerce engine that will make an 'end run' around entrenched candle market channels. Our 'Story Capital' will come from the "Who, How and Why" dimensions of our network of chandlers from rural and distressed urban communities. These 'outlier' chandlers will be joined by more 'advantaged' partners living in suburban and affluent urban communities. Collectively, this peer-managed network will tap the Small World (6 degrees) dynamics of the emerging Network Society.
When we put all the pieces of this Small Is Good business eco-system together, the Guild will be a force in the candle industry. No First Movers will reap disproportionate riches for this entrepreneurial venture. But a lot of folks who make this business happen will get 'enough' and then some. The Chandler Guild will provide significant self-employment opportunities for folks in rural and distressed urban communities. The way that we market and the way that our Guild members participate in their local communities will have a significant impact on local and regional economies.
Now tell me, where does the self interest of the Guild's 'smart business' stop and its contribution to the Greater Good begin?
--Sohodojo/NARFI Jim and Timlynn--
Hello Jim and Timlynn,
Thank you for your presentation. I enjoyed it very much.
A couple of questions for you. I may have just missed these during the presentation, but perhaps a second explanation would help me understand more fully.
- What are the defining features of a nanocorp, and can you provide a concrete example?
- Aside from publishing papers on the web, in what other ways to organizations and individuals (or nanocorps!) exercise "influence without authority"?
Thanks again to you both!
North American Officer
Banff, Alberta Canada
You are absolutely right, Amy. You didn't miss anything. The whole foundation of nanocorps, dejobbed small businesses, and microenterprise networks was only covered to the extent that we could talk about the Small Is Good Parallel Universe. There are PLENTY of links to additional information in the 'Best of Sohodojo Small Is Good Web Links' document supplied as a supplement to our presentation. While self-directed exploration of content found at these links will provide additional perspective, we'll take a moment to address your specific questions here.
A nanocorp is the convergence of "employee" and "business." It's the unary business, the smallest, indivisible business. In most cases, this would mean an individual person who is simultaneously the worker, boss, and stockholder/owner.
But we want a bit more flexibility in this concept than to say that a nanocorp is a one-person business. That is, a nanocorp is the smallest group of collaborative partners who are indivisible in business and life. For example, Jim and Timlynn are a two-person nanocorp. We share our life and our work completely. When you get one of us, you get us both. No matter what triumph or tragedy we experience, we will meet the world as one. Some families, or members within a family, may share this 'oneness' in relationship to the world and so be a 'family-based' nanocorp.
Casual friends, even good friends are probably not a nanocorp. Business acquaintances, no matter how much they enjoy and trust each other, and intend to sustain a working relationship together, are not a nanocorp. They are, at best, a dejobbed small business, that is, a persistent collection of nanocorps that brand themselves and work together providing some product or service.
The idea for the nanocorp came to us when we were working at IBM during the Golden Days of BPR, business process reengineering. The mantra of BPR was simplify, simplify. I, Jim, was developing executable business model software technologies. One day I said to the BPR consultants, "If you want to radically simplify an enterprise's information systems, get rid of ALL the employees and treat every transaction as a business-to-business relationship." They thought I was kidding. I wasn't. Since more and more corporations are using contract rather than career (full-time, permanent) employment, this is not too big of a stretch from reality.
After we left IBM to regain our health and sanity, the more Timlynn and I thought about it, the more this nanocorp idea made sense to us. And the more we understood its potential. And that potential is to contribute to a transformation of capitalism from being in service of the Corporation, to being in service of the Individual.
The idea of the nanocorp is to remind us that "You're on your own, kid" is the extent of the employer/employee relationship 'contract' for more and more people in the workplace. We all have to start thinking of ourselves as a business whose lifespan will outlast the series of transient employment relationships that make up our work lives. The era of life-long, career employment is becoming a thing of the past. In this way, each of us becomes a serial entrepreneur. And when we lead Portfolio Lives – that is, when we depend on multiple, dynamic revenue streams rather than a single, full-time wage – we become concurrent entrepreneurs. In other words, just staying usefully employed in the increasingly hypercompetitive world is becoming a life-long entrepreneurial pursuit. We pursue this 'business venture' through the care and nurturing of our nanocorp.
Now, about exercising influence without authority... It goes way beyond self-publishing. As hierarchical organizations continue to fall by the wayside, we find ourselves in all kinds of situations where we have to achieve our goals while not having the relationship authority to 'make it so'. When formal authority is lacking, we get things done by exercising influence without authority.
We're all pretty familiar with exercising influence without authority in the context of teaming with co-workers. And folks in non-profits routinely do it in the context of stakeholder development.
But we have learned to appreciate a whole new context for exercising influence without authority through our involvement in launching and evolving the Chandler Guild microenterprise and small business network of soybean wax candle makers. In all entrepreneurial start-up business that we've been involved in the past, founders are majority owners and have legitimate authority to say who does what, when and how.
With the Chandler Guild, we're starting with a shared but vague idea of what the Chandler Guild could be. But the exact business entity form, who does what, when and how... all of it is an emergent process. We've started with a web site, http://chandlerguild.com, to gel the community. In August, we hosted our First Continental Congress to bring together the first 100 chandlers to launch our Year of Discovery and Innovation. Even though a handful of us were 'first movers' to get this network business going, we don't own anything and are not in charge. The phrase, 'herding cats', was apparently coined to describe our evolutionary experience.
So while exercising influence without authority is routinely done in most work contexts, we believe that it will be useful in the extreme as we involve ourselves in the decentralized and distributed business network eco-systems that we envision populating the Small Is Good Parallel Universe.
Thanks again, Amy, for viewing our presentation and asking your insightful questions. We hope you will find additional information and inspiration in the supplemental materials we've provided and at the Sohodojo web site.
--Sohodojo/NARFI Jim and Timlynn--
Jim and Timlynn,
Thank you for your presentation. I am curious what kind of policies you think are important to support the "Small Is Good" idea?
That's a really BIG question, so we couldn't cover them all, but let us quickly hit two topics and we can interactively consider others.
First, self-employment health insurance costs are OUTRAGEOUS! The laws governing employer-supplied health insurance - starting as non-portable fringe benefits that corporations used to compensate employees when war-time wage freezes were active, and later as non-monetary 'incentives' to keep career-length relations with employees - are irrelevant to today's work world. Worse, these laws create a Mt. Everest scale unlevel playing field for the self-employed.
We're working with the Iowa Department of Cultural Affairs (Des Moines is the Center of the Health Insurance Corporate Headquarters Universe) to promote a new idea. That is, states should think of their self-employed citizens as a vital renewable and nurturable resource that is just as valuable as any renewable resource in their state. Although these Small Is Good business folks are not typical 'employees' of the state, they make a significant and non-trivial contribution to the economic well-being and quality of life for folks who live in the state, just as the state's traditional employees do. As such, we believe that states should lobby their health insurance providers to include the states' self-employed in the group policies that cover state employees!
The self-employed need such group purchasing power to bring health insurance costs down, We don't expect states to contribute to our premium payments, just let us be in the pool for getting affordable rates.
Second, foundations and grant-funding government agencies should consider a 'set aside', much like Federal agencies do for small business contracts, that would target funding of Small Is Good (enough) projects.
One of the challenges we face in rural Montana is extremely low population densities. Often, program/projects costs do not go down proportionately with reductions in service constituencies. Folks don't think too much about it but there is a WIDE diversity of demographic features within places that qualify as rural. Montana grant proposals often fail because the funding sources are increasingly forced or elect to be results-driven. So if you can spend $X on a program in one rural place and service 20,000 people, or spend that same $X in a place like Montana and service 2,000, where do you think the money will be spent?
Finally, we need local economic developers, local government officials, and local and national funding organizations to understand the implications of this Small Is Good business ecosystem that can emerge as a vital part of regional, state and national economies, The self-employed in what are now categorized as Creative Enterprises in Montana account for over 5% of all employment in our state. But until recently, we haven't even been counted much less recognized as a vital segment of the state's economy.
Mari, there are many other changes that we think will help nurture the Small Is Good Parallel Universe, but these are certainly a couple of the most important.
--Sohodojo/NARFI Jim and Timlynn--
Howdy Jim and Timlynn,
I strongly support the "Small is Good" concept and wonder how those of us who are not for profit leaders can better support this concept? I always look out for small businesses that I can support when purchasing promotional items, printing, etc. I'd love to hear other ideas that come to mind.
Women in Community Service
We agree with you to a large degree. Supporting small and local businesses is generally a good idea, especially if such product or service purchases keep money within our local and regional economies. So, by extension, if you just keep doing what you are doing, it will be easy for you and other non-profit leaders and your organizations to support true Small Is Good business networks as they evolve.
But this is a good question because it reminds us that not all small businesses are necessarily Small Is Good businesses. There is 'small' as in being on the Small Is Good side of the two complementary forces within capitalism. And then there is 'small' as is 'smaller', that is, size difference along a relative scale within the Big Is Good World. In other words, a business can be a small business but run with the values and aspirations of the Big Is Good World.
There are plenty of businesses that would qualify as small businesses according to government reporting standards, but the owner pays employees minimum wage and provides no health insurance to his or her workers. And maybe he or she has just paid the down payment for his or her daughter's Hummer to drive a quarter mile to high school. We say that this small business person is living by a Bigger, Faster, Better, Me First, You Later worldview.
The Small Is Good World we are talking about involves not only size, but new product and service markets based on 'Who, How and Why'. In addition, we need to see equitable, distributed wealth creation. When all these factors come together, the businesses and the markets are on the Small Is Good side of the 'playing field'.
There will be unscrupulous and self-serving Small Is Good businesses and entrepreneurs just like there are on the Big Is Good side. And there are 'good guys' in the Big Is Good World. So there is never a substitute for an informed and proactive consumer.
Bottom line – we believe that Small Is Good organizations will address qualitatively different problems and opportunities when compared to their Big Is Good counterparts. But, we don't yet have proof that this is the case. This is what entrepreneurial vision is about. We have to work very hard to make it so. People can then have real data to consider when deciding who they are, and how they will be in the world.
So, recognizing that there will be 'good guys' and 'bad guys' on both sides of the Small and Big World-fence, what can non-profit leaders do to support the emerging Small Is Good World? Be on the look-out for, and be prepared to experiment in partnering with, some new breeds of nimble, counterintuitive organizations and 'free agent' style individuals. It is not unusual for us to invest time and energy into developing a partnership relationship (including cross-sector partnership relationships), only to have the relationship fall apart because our prospective partner felt that little advantage could be gained by investing in a relationship with such a small and resource-poor organization. To that, we remind you of the proverbial saying we were all taught as kids, "Good things can come in small packages."
--Sohodojo/NARFI Jim and Timlynn--
I have a different perspective
I agree that static web pages can have a cost/benefit advantage for building mind share.
Another area where a network of small-scale enterprises might leverage the web is in supporting business processes. I think web applications that go beyond static content might be useful here. They could help geographically separated people collaborate to deliver products or services.
In your experience with small enterprises, have you seen opportunities to apply web technologies to support business processes?
Boulder, CO USA
Thanks for asking, Cole.
Static HTML pages are best for 'minting Idea Capital', not for doing real work. That's why we recommend having an Idea/Belief Site separate from your community (or business) web site.
During the 'B2B' 15-Minutes of Fame, a number of business-to-business heavy hitters tried to package small business and free agent collaborative services. Many are gone now that the Venture Capital Wind has subsided. One example of a useful site that is still around is http://Div2000.com, the Multicultural e-Business Solution portal. Other free agent services try to package various business services such as project collaboration space, billing assistance, accounting and financial planning, etc.
But the stuff we're interested in at Sohodojo does not exist yet. Bits and pieces of it do, such as fine-grained contract transaction and micro-payments such as is under development at http://ERights.org which is home to the E language, secure distributed pure-object platform and peer-to-peer scripting language for writing Capability-based Smart Contracts. But we'll need more than that to support the decentralized and distributed microenterprise networks we envision.
While the back-end side of these emerging network businesses is a challenge in itself, these network businesses will not survive and thrive if they try to compete in the hyper-competitive markets of the Big Is Good World. These "How Much and Where" markets are optimized to bring out the best in scale and control.
The Small Is Good Microenterprise networks we envision will thrive in new "Who, How and Why" markets. This means we'll need e-commerce business processes, e-commerce 'engines' if you will, that are qualitatively different than those built on the 'shopping cart' metaphor of the Big Is Good World.
One of my (Jim's) areas of software expertise is 'executable business models', that is, the use of object technology to directly implement abstract business models in executable software. I left my Executive Consultant position in Object Technology at IBM because there was intense pressure to patent my ideas and the software I worked on. In other words, the Big Is Good World wanted my ideas, but I was an expendable meat-bag, to use a Rudy Rucker term.
So, our goal at Sohodojo is to research, develop, and diffuse dynamic, executable business model software technology that will power the Small Is Good Parallel Universe. Cole, given your software and training background, you are an ideal candidate to get involved in this effort.
There is a supplementary document supplied with this presentation that presents a collection of 'best of' articles at Sohodojo that speak to the Small Is Good R&D challenge. But here is one, 'The Yin Yang of e-Commerce Engines', that speaks directly to your interest in the design requirements for the software that will power the Small Is Good Business Revolution.
--Sohodojo/NARFI Jim and Timlynn--
Thanks, Jim and Timlynn,
Your presentation is very thought provoking. I consider myself a neophyte when it comes to thinking about entrepreneurship. I realize that I have a lot to learn. I do, however, resonate strongly with the concept of "relentless passion to change the world through innovation." Would that this were the motivating force behind businesses whether for profit or not for profit.
If you have any other suggested reading or materials that can help further my education, I would appreciate learning of them.
Portland, OR USA
One thing you will find in spades at the Sohodojo web site is stuff to read and book recommendations to tread the Small Is Good Road Less Traveled.
One message we hope came through in our presentation, besides the need for everyone to get good at exercising influence without authority, is that the entrepreneurial future will be about influencing whole business network eco-systems, not managing a single organization. To this end, there is one book, now in paperback, that is essential reading.
Linked: The New Science of Networks by Albert-László Barabási is a Sohodojo Must-Read. While this is a wide-ranging and very readable overview of the application of new ideas in Network theory, there is much to apply to the Network Society we all live in today.
Another excellent book that we are now reading and have not yet posted a review on the Sohodojo web site is Shoshana Zuboff and James Maxmin's exciting and important book,
Also, check out the 'Best of Sohodojo's Small Is Good Links' item in the supplementary material supplied with this presentation. You'll find plenty of on-line materials to feed your head.
--Sohodojo/NARFI Jim and Timlynn--
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