“Don’t be evil”
Writing Gamevy’s constitution and rooting our ideals in structure
from Paul Dolman-Darrall, founder @gamevy
You all know the story.
Google — back in the days before it ruled the world — was taking the grown-up step of writing down its corporate values. After some fairly standard management speak, Paul Buchheidt (the creator of gmail) suggested summarising it as ‘Don’t be evil”, a nicely informal, trendy-sounding statement which also acted as a jab at competitors. Later, the founders Larry Page and Sergey Brin made it a cornerstone of their 2004 IPO letter. They clarified the statement to say that Google will be “a company that does good things for the world even if we forgo some short term gains”.
It was a great idea. But as the company got bigger, perhaps inevitably, pragmatic decisions were made that upset some groups and that compromised the purest form of the company’s ideal. I’m not judging whether Google is good or evil, I’m just pointing out that the phrase became a hostage to fortune. Journalists, activists and customers seized on it as a way to throw into sharp relief every questionable business practice or choice.
Now, it seems a kind of hubris, language that almost invites attack. And part of that is because a rather vague ideal is not tied down to any structure, to any actual policies against which the company can be judged or held to account. To Google, perhaps evil means genocide or kitten torture. By this definition, they’re living up to the ideal. But to a different group of people, using customers profile pictures without their consent in advertising to seemingly endorse products is a kind of evil. To them, Google has hopelessly compromised its integrity.
So what about Gamevy’s ideals?
And before you say it, let me acknowledge that comparing ourselves (all 9 staff with a just launched game) to Google is another kind of hubris.
But actually, that’s kind of the point.
When we founded Gamevy, I was the one with the absolute demands. I didn’t care what we built, or what we sold, but I insisted that the company had to be employee-owned and that we would work without bosses.
At that point there were several of us in discussion about the idea of starting a company. Two people backed out fairly soon after my ultimatum. They cared far more about what they did than how they did it — which is completely reasonable. “Let’s just leave all that stuff until we’ve got an idea we all agree on,” one of them said. “Or until we’re actually making any money” said the other.
I knew then that those two — both very talented, clever people — were not going to be a part of the new venture. I wasn’t willing to leave such a crucial part of why I wanted to build a company until ‘later’. It was the essence; the point of taking the risk.
I knew that there would always be something that seemed more important than culture. There is always a business imperative that makes the ideal — whether it’s not being evil or giving shares to employees — seem less important. The whole reason for sorting out structures at the very beginning was to ensure that we could never be tempted to let those ideals slip.
Just imagine, for example, that Gamevy does become very successful. If our game Blackjack Attack had been a runaway success and we had the normal company structure, the three founders would have been very rich, very fast. Would we have really taken those millions and redistributed them to our employees? Oh sure, we might have handed out a bit of the money as a bonus. And then congratulated ourselves on how very lovely and paternalistic we were.
Or let’s take our other ideal — no bosses. That’s fine while we’re small and all getting along. But how about when someone is arguing and arguing and I’m convinced they’re wrong. I can be pretty forceful (or so the other two founders keep telling me) — when it came to a business crunch point, would I ignore the ideals and just order to people to go along with my ideas?
I understand how human nature works. I know I’m not a saint. So I wanted to make sure that my ideals never got corrupted by temptation. True the most likely outcome is that we won’t make any money and there will be no temptation! But I wanted to create the structures in advance because they are also an essential part of the way we think and act as a company. They are the foundation for the culture and attitude we want to build. They are key to why people join Gamevy.
And those structures didn’t just extend to how the money got divided up, but to all sorts of other outcomes. Like how we would make decisions without a traditional ‘hierarchy’ and authority structure; how we would hire or fire people; how we would decide pay-rises; how we would make changes…
Building the Constitution
I explained my fears and why I felt we needed to spend so much time on the company structure — more even than on working up concepts and ideas.
Dan was very excited by it, as I’d known he would be — we’d spent enough evenings together after client engagements discussing how the companies ought to be structured. Helen, whom we’d only been working with for a year, looked more doubtful.
“If anyone had ever warned me,” she said, ‘that all IT people were such bloody hippies… why is it only the writer who cares about getting paid?”
Although she was clearly enjoying painting herself as the only down-to-earth pragmatist amongst the dreamers, Helen was the one keenest on writing the constitution.
“When you’re arguing everyone into one of your insane ideas,’ she said, ‘I want written rules on how I can stop you.’
Employee Ownership with a twist
I believe in employee ownership, but I also believe in rewarding risk fairly. The three founders were taking the biggest risks — we were investing serious amounts of capital and we were working completely unpaid for at least a year.
In the end the model we came up with was — *modest cough* — pretty brilliant. It was carefully thought out and is probably slightly more complex than anyone wishes to read in detail here. I’m more than happy to share the full details with anyone who’s interested, of course…
Suffice it to say that share ownership occurs in three ways:
1. invest cash in the business
2. invest time by sacrificing part of your salary
3. simply work for Gamevy
So far, this isn’t massively different to the way several companies work. Here’s the clever bit. There comes a pivot point in the company at which owners will begin to earn less than their ‘share’ of the business entitles them to. At this point, extra rewards are shared out between all employees equally. We have set this ‘pivot point’ as being the salary of the top-paid lawyer on the government’s legal-aid list — currently, that’s just under £500k p.a. Should Gamevy do so well that people receive more than this, then any additional profits will be divided in equal shares between ALL employees.
Two principles hold true. As profit increases, those who have invested most and worked longest receive the highest rewards. However, as the profits increase, smaller shareholders receive a higher percentage — evening out differences between shareholdings. If Gamevy becomes as successful as Facebook (more hubris!), then none of us will be as rich as Zuckerberg. But all of us will do very well out of it.
Making decisions
People who criticise flat structures often call out two specific problems: getting things done in a timely manner and making hard decisions.
For Gamevy, the vast majority of decisions are made as part of the work. We welcome dissent. Anyone can make an argument for why something should happen a certain way — whether it’s their area of expertise or not. That attitude is explicitly included in the constitution since we work with no bosses or hierarchy.
So what about when we simply can’t agree? Actually, in practice, this is fairly rare. Even when there is passionate disagreement over a choice, there is normally a way to test and prove one solution — which is exactly the sort of behavior we encourage in any case.
But there are occasions where a small number of decisions will have their own decision framework — and we make provision for this in the constitution. For example, we can give temporary roles to people within the company. The Chair — who has a responsibility to act in the interests of Gamevy as a whole — can appoint individuals with powers to investigate and report. The report might include recommended actions, which the Chair can see implemented before putting the decision to a vote of all owners. This might range from the very serious — accusations of fraud or improper behaviour — to more common although still difficult problems, for example, the perception that a partner is not performing well or contributing sufficiently to value.
And finally, the constitution explicitly makes provision for how employees can tell the chair and directors what to do, not the other way round, and then remove individuals from those roles if necessary.
Big decisions
We are all owners and partners. That means that when it comes to decisions which affect the entire company rather than the work itself then we hold a vote. A resolution is formulated and presented to everyone with a set amount of time given to discussion and challenge before a vote is called.
Your vote is weighted according to how many shares you own. No one person controls the company. If the biggest shareholder (me) wants one thing, but everyone else disagrees, then I lose.
Most votes — including whether to employ someone, fire someone or invest our money in a particular way — pass with a 50% majority, but any changes to the constitution itself require a two-thirds majority. A sale of the company — which founders might be more motivated to accept than other partners, requires a 75% majority decision.
These shares cannot be sold (unless everyone else agrees) and although those who leave will continue to own shares gained through investment and sacrifice, they will lose the voting rights.
Now you might think that this just sounds like normal shareholder votes at traditional companies. The difference is that at Gamevy, such votes must be followed, they cannot be ignored. And of course the other key difference is that our shareholders are those who work for the company. So employees always have the largest say in what happens. You can’t have directors voting themselves super big payouts or selling the company in a way that rewards them but not anyone else… it’s simply impossible.
How it’s working
We spend a day taking everyone through the constitution when they join. We refer to it. We re-read it when we had a hard decision about making someone redundant. Helen went through it with a tooth-comb to check what % agreement I needed when it came to an investment decision which she referred to as ‘exactly the sort of insane idea I was worried about in the first place’.
We haven’t come up with any big topics which need to be put into the Constitution which we had not previously covered, but I’m sure we shall do. The biggest one will be what happens if we seek funding and how that will impact on voting and decision-making.
We haven’t had anyone challenge any area of it — even things such as financial transparency — meaning that everyone knows and can see what everyone else is earning. But then, as Helen put it, our constitution acts rather like the route sign on a double-decker bus: it’s not that the route can’t ever be diverted, but if you don’t like the destination, then it’s probably best not to get on.
And finally, it allows everyone to hold us to account.
I don’t know if Gamevy will make it or not. But I do know that we won’t be thinking to ourselves — ‘where did all those ideals about employee-ownership go? how did we never get round to implementing those ideas about transparency?’
We have to stay true to those ideals — because they’re built into our very structure.
Thanks for reading. You can find out more about our company by following us @gamevy or by reading our latest updates, thoughts and radical business ideas on www.giantleap.me
