Fractal Ownership Applied: Day 1
November 4–8, I’m at the #human-centric design week of our NGI Venture Builder Program (Next Batch Application is now open. Apply!). We are meeting with local communities and companies. The goal is to build an MVP co-designed within the community, create a community of local co-workers — and present it back with them to an audience at the end of the sprint.
This is Day 1: Observation.
Well, coming here I observed that I am alone. Somehow in the excitement of the epiphany of last week: “Fractal Ownership”, I lost some part of the team. We had amazing response to the idea, reaching from critical questioning to outright fans, links to further high profile contacts, and also one slight warning. The warning now resonates: “This is going to require change management, you are challenging so many mental models.”
I made a mistake: I am so convinced that we are on the right path, that I said (I didn’t even take time to say it, I wrote it in Slack!): Fractal is going to be the financial, governance, and business model of Freeelio (spoiler: yes that German R&D company we refer in Part 1), and every project we support shall have the opportunity to opt-in.
I was so deep in execution mode, I forgot to ask the people who walk with me to opt-in into Fractal Ownership.
Interestingly, the entrepreneur I met today, founder of Newtron, even had a name for this mental state:
Sana Follia — healthy madness
You are so convinced, because the puzzle pieces are all on the table, and you stared long enough at them that going out and building it together seems the only thing that matters. This sana follia helps entrepreneurs to persevere when the road ahead is not just bumpy, but doesn’t even exist until they build it. Hence, they need a team that is so close knit that their madness doesn’t drive them apart. And then?
When that startup is about 30 people like Newtron now, and they are starting the growth phase? The madness will start again, the founder will need managers that are a bit (lot!) like him, totally in line, and can execute with that little sana follia. And the founder must become the CEO who can lead with clarity, alignment of vision at all times, in order to create trust — and to be able to trust the people working for him. We know this story. We know how tough it is and rarely unfolds perfectly. And we know in many mature companies, it has even created a toxic environment.
And I’m convinced that Fractal Ownership is a better solution for many forms of organizations today. It’s so viral, it will be how we run all organizations in the future.
Now, I’m stepping back, taking the observers role — at least today.
1st stop: Newtron is a really cool startup in Sicily that retrofits cars to make them all electric.
They have a secret sauce, which creates that sana follia in the first place: Some passion that the founder pursued in their time as researcher (until 2010), and then decided to productize it, failed, and rose from the ashes (2015). Newtron in 2019 has first mover advantage: they are the only electric retrofitter — of any type of car — in Europe! They paved the regulatory path. But he doesn’t pride himself with that as much as he likes to note the smile on the faces of his employees on the factory floor. Indeed they are busy crafting an incredibly versatile amount of cars into clean electric vehicles, which not only make less noise but also look beautiful after a refurbish for a few bucks extra. You can even have the silver lining (yes!). There are special cars, such as food trucks, or city cleaners.
With climate change, and ireversibility of the effects less than 10 years away, Newtron has found a sure fire solution that scales: Ability to retrofit any car into an all electric vehicle at the fraction of a new electric — PLUS: their solution doesn’t create more waste for the world, like when you switch to an electric car.
And scaling they want: a franchise of workshops all over Italy first, then Europe, the world is the limit. Workshops in which the people are as educated as in the workshop in the headquarter. As motivated as if the founder comes by daily to pat them on the back — even though there are 1000s of kilometers away.
How can one achieve, knowledge exchange, clarity, alignment of incentives/vision and trust across such a vast network? Proximity, the founder says, is important. Newtron has a social mission, they train the trainers of future Newtron retrofitters, diffusion of knowledge.
The communication was tough in the beginning — not many cared about what a small electric car retrofitter did out of a small town in Sicily. But then they made the Fiat 500 all electric, and all of Italy was talking about Newtron. They found a channel to get their message across to a receptive audience that Newtron cared about first: Italy. And a niche that the world knew about: Two twin all electric Fiat 500 in blue and yellow were awaiting their transport to Japan.
Nowadays investors are lining up to get a piece of the company.
2nd stop: Fondazione Lucifero was born by the will of the Baronessa Maria (or Maria Laura) Lucifero and focuses on especially education of young children.
It’s a very nice drive up to the villa.
We arrive in the late afternoon and entered the beautiful housing. At the tables in the large entrance hall children were doing homeworks in groups each table with a tutor. Some children were sitting at the couch area talking with each other, reading. A few were walking around, curious who are the visitors.
We started a conversation there, and took it to a more quiet area of the villa. The managing director and the teacher sat down with us and explained the concept. Their goal is to help children experience an environment where they are respected and respect each other as well as the nature around them. They grow their own food in the gardens together. They have solar panels on the roof and produce own clean electricity.
And they own a lot of land. Way too much as to be able to make sufficient use of it with the means of the foundation alone. So they do what all property owners do. They rent it. They are a non-profit. They are open and willing to develop and support projects on that land, which are in line with the nature of the foundation. But they lack appropriate financing options. They were offered money from the oil refinery in Milazzo — but they said, no. Because money has a color, and the foundation refuses to clean wash it.
It was a great observation, it filled me with gratitude for people like the teacher and the managing director, as strong individuals they could say no to a type of money laundering.
Note: Many startups in the clean-tech and social impact domain are misused by investors and strategic partnerships for “this type of money laundering”: green-washing, sustainability-washing, social-washing of money that was earned by depleting the social and environmental values of this earth and humans who live with it. Only because those startups are “young and needed the money.”
The foundation’s main goal is to foster strong children who value and respect themselves and each other in order to be able to cooperate consciously with each other and the land. Yet they mentioned, the relationships with “grown ups” in the neighborhood is less cooperative. Although they are a non-profit with a common goal with the community of Milazzo, a mission to support the values of Milazzo. Even with respect to the governance structure they went to great lengths to distribute control. In addition, they gave away partial control to the Regional Department of Family, Social Policies and Local Autonomies.
DriveBy: The oil refinery of Milazzo. They weren’t inviting us in.
Apparently the refinery gives work to about 1000 people.
1000s of people live nearby, and locals have statistically higher occurrence of cancer.
Tourists find it horrible.
There is always a breeze that comes, and it smells of oil. No matter where you are on the island.
This is what an expat living in Sicily writes about their observations: “Norway, as we know, has it’s own supply of oil. And where are their oil refineries? Far, far away from inhabited areas. And do they emit toxic gases? No. How come the oil refinery in Milazzo emits noxious gases? Because it’s in Sicily.”
Why? And why are people not talking about this problem?
