How (and why) we created EXP
Building a small, simple business that meets our basic needs
A Way In
Finding paid work that aligns with our passions and values seems like a reasonable thing to expect from life, but lets be honest and acknowledge that it’s a goal that is proving elusive for many of us. Ten years ago I quit my nine to five job and went after the dream of finding a livelihood that was more aligned with my passions and values. It continues to be a challenging adventure, but a decade on I’m glad to say that I am my own boss, I enjoy the work that I do, and more than simply caring about the people I work with, I feel like we’re building something important together.
This article is about three things: firstly the challenge of earning a living in an increasingly volatile economy, secondly the challenge of finding work that is meaningful and enjoyable, and thirdly doing all this in a way that creates enough time and energy to contribute to the other things that give my life meaning.
I think there is an unhealthy taboo around discussing money. Our personal financial situation is one of the most private (and therefore most stressful) areas of our lives. There are many reasons for this — which it would be good to explore another time — but my goal in writing this article is to provoke a conversation about solutions, and to share some practical ideas about how we can build greater financial security in our own lives, and in the lives of the people around us.
Creating New Economic Communities
Increasing numbers of people are joining co-working spaces, starting businesses, forming collectives, and creating new economic communities. Sure, we’re doing this partly for our own financial benefit, but I think many of us are also looking for meaning, identity, belonging, and that particular kind of security called ‘finding my tribe’.
Being part of an economic community changes the physics around the problem of earning a living. We get more referrals, sub-contracting is easier, we have access to other people’s experience and knowledge, we can share office space and equipment, etc, etc. All of sudden projects that didn’t stack up financially, look doable. Clients that were out of reach, are now part of our circle of friends. Contracts that we could never do on our own, are winnable because we can form teams around them. So far so good.
It’s the next bit that’s tricky. I think of ad hoc ‘collaboration’ as being a bit like gliding. It feels like flying, and if you’re good at it you can do it for quite a long time. But if you want to fly long distance, you really need powered flight, and that’s where sustained ‘collective action’ comes in. This involves creating (and maintaining) operational, financial, organizational, and governance systems.
It is this investment in a commons that makes it possible for the collectives of people to participate in the economy and in our society in new ways, and enables us to once again change the physics around the problem of earning a living. It also builds community because we have something to work on together that is larger than ourselves, and more meaningful than just the latest gig.
Hopefully there’s now more revenue coming in, thanks to your shared brand, better products and services, and decent financial systems. But there are also new tasks that need to be done — creating (and maintaining) these shared systems and assets. Even more challenging are the new competencies needed like governance, conflict resolution, and organizational development. My colleague Alanna Krause has written a great piece about the challenges of operationalizing these systems here.
So who does all the work on your commons? How do you resource it? This article is about these issues too, because I think that the issue of resourcing the commons is intrinsically connected to the question of personal livelihoods.
More People Working On Stuff That Matters
Enspiral has a simple mission statement: “More people working on stuff that matters”. This sounds like a fairly straightforward proposition, but there’s some real complexity there too. I think it names the central challenge that many of us face — how do I earn a living while I do the stuff that really matters to me, my community, and my planet? The short answer is “don’t do it alone”. The longer answer is this the rest of this article.
How do I earn a living while I do the stuff that really matters to me, my community, and my planet?
I describe Enspiral to some people as an attempt to create a 21st Century tribal identity. We may not be bound together by a strong connection to a specific place, or a long shared history, or by common ancestors (well maybe a very long time ago), but we have created a shared vision for the future, and we have co-created a bunch of collective assets, and we have grown a handful of companies together, and we work hard together everyday to make the whole thing better.
Over the six years of Enspiral’s journey I have witnessed, and more recently been a part of, a number of strategies to better resource our work, and if you’re interested you can read more about these in our Handbook. Everyone at Enspiral has their own unique version of our history but if I were to try and create a simple narrative describing these strategies I might call the chapters things like:
- Founders and friends (earning a living and doing good)
- Freelancers collective (more people earning a living and do good)
- Internal incubator (pooling surplus and growing businesses)
- Collective of ventures (growing the impact and creating jobs)
And if there were a couple of chapters being written right now they might be called:
- Ambassadors (connecting with the global network)
- Livelihood pods (small teams that create financial security)
Each of these strategies builds on the previous one and in many ways follows a fairly obvious trajectory of growth and experimentation.
What none of these chapter headings tell you is that underneath this progression has been massive voluntary contribution to the commons. This commons is made up of a shared culture, conceptual frameworks, technical systems, pooled resources, community events, and personal relationships. As well as earning a living, creating new ventures, and trying to work on stuff that matters, everyone at Enspiral has been investing in this shared asset base together, and as a community we continue to struggle to resource this vital work at both the individual and collective level.
I want to share some of the thinking behind the creation of one of the businesses I am part of at Enspiral called EXP. Hopefully this will provide some ideas about how to achieve financial security when you are part of a community or network. I hope that people who are involved in deliberately building commons based economic communities might find it useful too.
EXP is a small, three person business that specializes in event management, workshop and programme design, facilitation, and professional consulting. We probably spend about 40% of our time working on our own projects like the Open Source//Open Society conference and Enspiral Summer Festival, 40% of our time working with a range of organisations to design and deliver events that are critical to their work and that align with our values like the Design for Social Innovation Symposium and the Aotearoa New Zealand Data Commons project, and perhaps 20% of our time doing advisory and strategic work with a wide range of organizations from the public, private, tertiary, and community sectors.
EXP is also an Enspiral Venture. An Enspiral Venture is an organisation that our Members (shareholders of Enspiral Foundation Ltd) have approved to be part of the Enspiral Network through a formal agreement. Like all Enspiral Ventures when we applied to join we were asked to describe both our financial and non-financial contribution to the commons.
Our primary non-financial contribution is that we provide a home for some of the Enspiral network’s most important cultural assets, like our Summer Festival and the OS//OS conference, that bring people together in ways that help achieve the network’s goals and aspirations. In financial terms we take on the financial risk associated with hosting these conferences and retreats. After nine months in business we have just started to make regular financial contributions (NZ$200 per month) to the Enspiral Foundation as well.
Silvia Zuur, Ants Cabraal and I set up EXP as vehicle for us to achieve some very specific goals. Having all been involved in start-ups before, and knowing what that takes, it was clear that we needed a fresh approach. We knew didn’t want to end up being slaves to our new creation, so we invested a small amount of time up front designing EXP so that in the future it would continue to serve us, not the other way round.
Being clear on our objectives was really important. Here’s my take on our top four design goals:
- Create a stable and autonomous platform from which we could do business, earn money, and to support ourselves financially
- Remove any unnecessary overheads so we would have time and space for our many pro bono commitments and interests
- Provide a legal and financial ‘home’ to ensure the viability of Enspiral’s retreats and conferences and remove these potential risks from the commons
- We also wanted EXP to provide a platform for people in the Enspiral network who want to host workshops or events to do so with the minimum of permission and with some support.
After nine months of trading I am pleased to say that I think that EXP is delivering on all these goals.
What Makes EXP Work
The alternative to creating a start-up is to create a business. A start-up is a way to test an unproven business model. A business is a way to execute on a proven business model. In designing EXP we wanted to create a simple business with some known business models (event management, facilitation, and consulting). We didn’t want to spend valuable time raising capital, ‘pivoting’ the model, and generally worrying whether it would work out or not. The products and services we deliver to clients need to be innovative and transformative, but our legal and financial arrangements do not.
Practically we use Xero (a cloud based accounting solution created right here in Aotearoa New Zealand) to track our finances across three categories:
- Core — this is our mini-commons and here we deal with bank fess, administration costs, and our Enspiral Venture contribution. All Business Units contribute financially to the core.
- Business Units (BU) — we have one of these for each event or client project. Each BU is either run by a Director or a BU Lead sponsored by a Director. We have a clear process to launch a BU and (more importantly) a clear process to wrap up a BU.
- Director Business Units (DBU) — these are really just a BU in the name of one of the Directors. In this way each Director can run their own ‘business within the business’. We can each track our expenses and also manage personal clients through our own tracking code.
We have a contract with the team at Enspiral Ops to process the accounts once a week, and we’ve worked with them over several months to work out a clear, easy processes for handling receipts, invoices and bill payments. Once a month we go through a simple reconciliation and reporting process. Now that we have nine months of Profit and Loss to look back on, two of the Directors have set up regular ‘directors drawings’ each week to help smooth out the peaks and troughs out of the consulting lifestyle.
Keeping It Small and Keeping It Simple
EXP is collectively owned by the three Directors, we each set our own incomes, and we make decisions by consensus. In order to do this we’ve kept it very small, kept it very simple, and set clear and achievable goals for the business. Because we’ve been intentional we’ve been able to do all this through a standard limited liability company structure, with standard accounting systems, and with no special documentation, structures, technology or processes.
We try (mostly successfully) to put zero energy into things like business development, promotion, strategic direction, organisational development, HR, etc. In other words it’s very lean and I think we have a great strategy called “find work, do work, get paid.”
EXP does not employ anyone (including ourselves) and if we need support for projects we contract people in on a project by project basis. This does not create any secure jobs for people, but everyone is really clear what is happening and it’s professional. We make sure we do thorough retrospectives on all our projects and generally do our best to make sure everyone involved is happy with the experience.
We deliberately put very little energy into worrying about who would own the company and how it should be structured. It’s a limited liability company and we hold a third of the shares each. We were able to do this for a few reasons, (a) we decided not to build a company of enduring value (simple brand, no major assets) so who has equity is not an issue. (b) We don’t pay dividends, so who has equity is not an issue. (c) We don’t employ anyone, so sharing equity with workers is not an issue. And (d) in there context of EXP we decided our business culture would be really pragmatic, so philosophical concerns about ownership could take a back seat (although obviously these concerns are a high priority for us in other contexts).
If someone we know and trust wants to do a project through EXP then they just need one of the directors to play the role of ‘project sponsor’ for their initiative, and the company provides the financial and legal infrastructure for the project to be delivered. This keeps risk and accountability really clear for the three directors — nothing gets done in our name without one of us being personally responsible. If we don’t have the capacity to provide oversight, then we don’t sponsor it.
We don’t ask anyone we work with to ‘invest in our business’ — instead we say invest in this specific event or project and make sure you get paid what you think that investment is worth. We make sure that each project we deliver puts a small amount into the core to fund our admin and our Enspiral Venture contribution. Apart from that basic collectivism, we simply each bank what we’ve earned each month.
In building EXP this way we decided that our impact would not come from growing a company, but instead would come from creating transformative experiences that connect people (hence the name EXP). This focus on outputs and outcomes means that we keep internal processes to a minimum and this lets us focus on delivering great work.
Contributing the Commons
The other important consideration when we were designing EXP was finding a structure that enabled the three Directors to contribute more time and energy to the Enspiral commons. By flipping the start-up paradigm on it’s head we have been able to “free the founders” to work on stuff that matters. In our case what matters is our tribe, not our business. We knew that EXP wasn’t going to serve us, or our community, if it consumed 100% of our creative energy. As it stands I think that EXP accounts for about 20–30 hours per week depending if I am trying to save or just get by. The rest of my time is my own.
Here are a few observations about what I think this approach has made possible for us personally and for us as members of the Enspiral project:
- The three Directors of EXP are able to give a lot of time and energy to the network because we have reliable incomes that we earn ourselves with a minimum of overhead.
- We do paid consulting work for some Enspiral Ventures in a professional way, however we also contribute a lot of time and energy to supporting ventures in the network pro bono.
- Because we have our own legal/financial entity we place very little risk on the larger network. We have strong internal accountability to each other and this translates to low overheads on the commons.
- Because we have our own legal/financial entity we can provide a platform for others to ‘find work, do work, get paid’.
- Professionally we benefit from being part of Enspiral. I would guess that something like 50% of my income through EXP is in some way connected to me being part of Enspiral.
- The Enspiral network benefits from the work that I do through EXP, and more importantly through the individual contribution I can make because of EXP, so it feels like a genuinely reciprocal relationship.
By keeping the smaller commons really lightweight we’ve been able to create lots of space for us to contribute to the larger commons. The key point I am trying to make here is that the more energy you need to invest into your part, the less energy you have to invest directly into the whole. Sure, making each part strong helps makes the whole stronger, but if we are serious about building commons based economic networks, I think we need to understand this trade off, and take it into account when we set about creating new start-ups together.
A Way Out
On the surface of it, this article is about a few friends getting together and starting a small business. What I hope you might take away from the story is how important this simple intervention has been to me and my co-founders, and how important I think it has been for Enspiral, which is the collective that we’ve chosen to be part of.
Our small business has helped solve what could easily seem like an individual scale problem (finding a stable income), but by working at the small group scale we’ve managed to create three livelihoods. EXP has also helped address what could easily seem like a collective scale problem (risk to the network from hosting events) by creating a smaller, independent legal entity to do that job. By choosing to keep our scale small we’ve avoided many of the overheads associated with creating a larger more ambitions start-up.
We’ve also had to learn a lot about business and financial systems along the way. I know it’s natural to want to offer people secure employment, but I think that if we’re really serious about building commons based economic communities then we need to hold the expectation that everyone in our communities can learn what it takes to own and operate a simple business in the current economy, regardless of whether we personally approve of current economy or not.
So. We need to find meaningful work that we enjoy, and we need to set this up in a way that supports our learning and independence, and we need to make sure that this also gives us enough surplus time and money to invest in our communities. Here’s my sense of what this might look like:
- Investing 24–30 hours a week in working with others to make a living.
- Investing 5–8 hours a week in your community or tribal commons.
- Investing 5–8 hours a week in doing what ever you are most passionate about.
This is not an easy timetable to maintain, but I think for highly motivated and reasonably skilled, professional people it’s totally possible. Especially with some help from our friends, and most importantly with the support of our community.
Here’s three steps that I think will help:
- The first step is to take a long hard look at your outgoings and your charge out rate. Most of us spend too much money on stuff we don’t need, and we tend to undervalue what we do.
- The next step is to get together with a few people you like and trust and who have complementary skill sets to yours. Even if you never actually work together on the same project, simply by banding together and doing your own work alongside each other you will add value to what you produce.
- Finally we need to get over the taboo of talking with each other about money, and we need to be really honest about where we’re at financially and what level of income we want and need.
This article is not intended as a criticism of anyone who is doing it differently. If you’re involved in a start-up and you’re happy making that work, then great! If you’re having fun experimenting with new organisational structures for your business, then keep going! Thank you! We totally need people playing these roles in our communities.
And we also need people who have secure incomes — including holding down a nine to five job — and who are willing (and able) to invest a lot of their time and energy to help create the collective infrastructure that commons based economic communities rely on.
Perhaps a multitude of small businesses — which are simple in form and function, and that have robust financial systems and sound legal structures — can help ensure that our own basic needs are met, and that we have the freedom, energy and time to invest our social capital in the commons of our choosing.