What is the Open Business Movement?

Important: this is not to be considered a finished post. It’s a constantly evolving concept.

Some storytelling …

In the second semester of 2015, a few friends and I started to work together on an idea.

The idea was to create a horizontal company. The business was going to be a content-based portal on nutrition.

In a horizontal company, no one would have a higher paycheck, or would be a majority shareholder. Everyone involved would be equal.

With this concept in mind, we started recruiting. It was not long before we realized that more people liked this idea. What was a dream, in the beginning, of a small group of people became the actual dream of a 20-strong team.

That’s how Baobbá Lab was born.

In less than 3 months, we were able to put together a team of 20 people with complimentary skills. Business administrators, designers, developers, video makers, nutritionists, a chef, and a writer.

I wrote about the birth of the idea in this post: How I started a horizontal company.

A few weeks later we realized that we were too good a team to focus on only one idea and that we could tackle different projects simultaneously.

Three new projects were brought to life: 101Chefs, Academia da Natureza (Nature Academy) and Personal Brasil. All three with the same goal: to empower people and present them with the opportunity to increase their income through gastronomy, permaculture and fitness respectively.

We went on learning. We faced challenges not foreseen and had to keep up with the hundreds of people who were interested in being part of our team.

When things grow too rapidly, we tend to be a little scared. So we designed an initiative to protect our group.

“If there are enough challenges with 20 people on board, what if we had 150?” That’s what we began to wonder.

We then decided to focus on the projects already in the pipeline sticking to our team of 20 founders.

After that, we began to experience some conflict. On one hand, more people were interested, asking for information, volunteering to work; on the other hand, we were losing strength internally. Much of that initial energy became too much time spent idle.

Projects take a while to be developed. One cannot create a company from scratch in one day. Business was changing and we were adapting to its new face.

Whilst exercising our patience, people in our team grew impatient. They wanted to do more.

We reached the end of 2015 with the feeling that our initiative and what we had done throughout the previous months was going against the flow.

If there is one thing I learned in 2015 it is to observe. And by observing one can find the flow. Our flow was to expand our work, to bring more people in, to incorporate new projects.

We ended 2015 trying to build a better relationship with one another and with outsiders interested in what we were doing. We built a Facebook page and in less than 2 months had nearly one thousand active members, without any advertising.

Join us here.

The name we created, Open Business (Empresa Livre), began being used by different people and Baobbá was often cited as reference.

Some of my texts were translated to many different languages and I was suddenly in contact with people all over the world trying to get a better knowledge of how we work.

Having started out without much thought, we eventually realized that we had actually set an initiative in motion. And now we want to expand it!

Here is some initial information.

What is an Open Business?

An Open business is a company without an owner. No shareholders. No bosses. No managers, nor directors of any kind.

Everyone is equal. No one is more valuable in salary. No one has a bigger share.

And, consequently, no one owns the company.

I can’t leave and take a piece of the company with me.

People can come in and can go. But the company endures.

This is interesting because it’s a punch right into ego’s stomach. No one is CEO, founder, VP or any of these labels that make you feel important.

It takes a great level of detachment to accept being the same as everybody. Regardless of age, date of admission or educational background.

How do you legally incorporate an Open Business?

A great beauty in starting a new model is that we have no reference to follow. We have to start from scratch. This is also the case with legal procedures.

The current legislation doesn’t cater for Open Businesses. It wants us to have a shareholders’ structure, but we don’t have owners. It could maybe fit into a cooperative, but we’re not one.

Lawyers want to protect us from labour suits, but we don’t have employees. They also want to prevent us from facing shareholding disputes, but if no one owns it, who is the one you’re going to have issues with?

It’s not that simple.

Nonetheless we keep on going.

I don’t believe there will be only one way of doing it. Each Open Business will create its own model. There will be small Open Businesses with only a handful of people and there will be those with hundreds of co-founders. Some will be more stable and others will face a constant changeover of people.

Consultancies operate in a certain way. Industries, in a different one. Start-ups, in yet another one.

That’s why it’s hard to create a standard business model. I believe each one will have to pave its own path.

And where might this go?

Maybe we can influence legislation and new rules to be set. Maybe the whole ruling process will be changed. Maybe not in Brazil, maybe some place else. And that may come back to us here in Brazil as an indirect influence.

I don’t know. I don’t have the answers and I’m not at all ashamed of admitting that I don’t know.

How is the money divided?

This is another there-is-no-correct-answer situation. Each group can build its own premise.

At Baobbá, we outlined some initial criteria that made us comfortable, but we know they can be changed. We created three levels in terms of hours invested in the company.

More than 30 hours per week = reference maximum,
 15 to 30 hours per week = 50% of the reference maximum
 Less than 15 hours per week = 25% of the reference maximum.

The initial idea is to divide the money equally, regardless of how successful a particular project is. Each member reports what work-hours level they fit in and we split the money accordingly. No questions asked. Trust is the foundation of an Open Business.

Maybe this model is fair and will suffice. Maybe we’ll have to adapt it somehow, splitting by project, for instance. We don’t know yet. Our main source of learning is experimenting.

What are the advantages of creating an Open Business?

We put together an A-team without a penny from investors.

Once everyone is entitled to the same share, it’s easier to recruit talented people.

If your idea is good, has purpose or is just cool, it’ll be even easier.

There are millions of people working in endless and purpose-lacking jobs craving to be part of projects with some sense of contribution.

Another advantage is that we don’t waste time on interviewing, selecting resumés, setting up job offers.

If you like it, come work with us and we’ll share as peers.

The greatest challenge of entrepreneurs is having to do one too many things. Too many different activities. If you have the money or the revenue, well, you can hire employees and share the load. But if you don’t, it’s on you alone.

The Open Business embraces the concept of group entrepreneurship. It’s easier that way.

I have an idea and I want to establish an Open Business. How do I start?

One of main pillars of the Open Business is COMPLEMENTARITY. We believe in the power of you sticking to what you love and allowing what you don’t know to be taken up by someone who loves to do just that.

When you get together by complementarity, you increase your odds of succeeding, because together you can do more.

So, let’s assume you’re a therapist and want to set up a therapy clinic or business of some kind. If you get 5 other therapists on board, not much will be done. But if you can merge therapists, designers, developers and marketing specialists, your odds increase considerably.

Start listing the skills, capabilities and competences you wish your team to have and recruit people accordingly.

The beginning is always the toughest part, but once there are people on board, it’s easier to get more people interested.

I already have a business and I want to change it to an Open Business. What should I do?

Disclose, publicise your project. Don’t be afraid of getting your idea stolen. If you are afraid, you probably try to keep it a secret. Keeping ideas to yourself makes it harder for people to contact you.

Call in and talk to people you want on your team. Designers, writers, developers… Start with those in that area you need the most to get the business in motion.

Then, open up to new possibilities. People we never thought to consider might show up, volunteer to work, and that might make you dream higher.

Suddenly, you realize you can do more. That’s how we went from 1 to 4 start-ups.

I don’t have any project or idea, but I’ve got time to invest. What should I do?

Volunteer to be part of what you want. Let people know what you do and love doing, where you’ve worked on in the past and what your dream is.

Get in touch with the projects that appeal to you.

What we hope is that people with ideas and projects open themselves up to those willing to participate. No filter. No interviews.

I want to be part of it, but I have a job I can’t get out of.

In a Free Company each one is free to choose what they are willing to get involved with. You can decide when you’re going to work, what you’re going to work on and how much time you have to spare. There is no pre-requisite.

That way, you can keep your job, your other business or your freelancing up without any issues.

You can dedicate your free time to it, and that’s ok. You can maybe work on weekends and be of extreme value.

Where to is this initiative going?

Honestly? I don’t know.

I guess that’s the beauty of it. When you watch a movie or a TV series or read a book, you don’t want to know the end beforehand. You hate spoilers. It’s awesome riding along with it as it goes.

I guess the same applies to Open Businesses.

I believe we’re going to create a new system that will coexist with previous ones. We’ll have small, medium and large corporations, start-ups with direct investors or private equity funds, publicly traded enterprises, NGOs, social business, Open Businesses and many more.

The world is very large and has room for everyone.

Do you want to know what I think? I think this is going to grow and reshape the economy.

Think about it. A 19-year-old wants to start his or her professional life and faces two options:

Work with an Open Business doing what he or she likes to do and earning the same as anyone

Work with IBM or Unilever, 9 to 5 plus extended hours work schedule for a salary.

It seems quite obvious which one to pick, right?

But, in order for that choice to even exist, we have to make our system thrive and stimulate new projects and opportunities to come to life. When people with good intentions are united with a common purpose, it’s more likely for the endeavors to succeed.

Maybe then IBM and Unilever will have to adapt themselves to not be left behind and lose the talented ones yet to come.

Maybe this will grow and will reshape the economy. Maybe it’s just a momentary hype until something better comes up. Maybe we’ll see there is no continuity to it and will evolve into a new and different system.

In the meantime, we will go on having fun, trying and learning.

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Where can I get more?

Join our Facebook page: Empresa Livre

Watch a very relaxed hangout with me and Carol Fuga about it. Hangout link.

Read this post where I write about how it all began.

Send in your doubts, suggestions, recommendations. The idea is that this material will be dynamic and constantly evolving and updated.