Pivot to People: It’s Time to Build the New Economy
Today’s calls for ethical, humane, responsible, regulated and beneficial technology, compounded with venture capital’s virtue signaling in solidarity with Black lives, brings us to a critical crossroads for corporate America.
Yesterday, tech giant CEOs defended their companies before Congress against allegations of stealing, breaking antitrust laws, and fueling disinformation. “We’ve invested billions of dollars in moderating hate speech from the trillions we’ve made off of it,” is how Safiya Umoja Noble, PhD paraphrased Mark Zuckerberg’s tragicomic defense.
What are the consequences when corporations define what they deem to be “responsible”? Past mistakes can often predict the future.
We can learn from a grand corporate experiment that has unfolded over the last 30 years. In response to growing consumer consciousness about the goods and services we buy and the absence of government regulation, companies in a variety of sectors came together with civil society organizations to form “multi-stakeholder initiatives” (MSIs). These MSIs forged codes of conduct and developed oversight mechanisms to certify business practices were “sustainable,” “fair,” or “ethical” in order to counter widespread human rights abuses and environmental damage. Accepting these cosmetic half measures poses a grave threat to civil society. We don’t have the luxury of time to let it play out and then analyze the consequences.
This month, researchers at MSI Integrity released “Not-Fit-For-Purpose,” their final report about these practices, and the culmination of a decade of analysis. The verdict? This experiment failed. Behind the external public relations campaign, power consolidated, and rights holders became disenfranchised. Not only did these efforts fail to address the root causes of abuse, but they cloaked and compounded them. The key takeaway: just because more people are invited to a company’s table doesn’t mean their voices are heeded, or their interests promoted. We are navigating a nearly identical bargain in big tech: a surge of voluntary, preemptive, symbolic gestures.
“The most significant and transformative human rights project is one that has received little attention within the human rights domain: challenging the corporation itself and reimagining our economic enterprises,” writes MSI Integrity. Allow us to paraphrase:
The most urgent human rights project of our time is reimagining business.
As we consider our current reckoning, will we stand by as history repeats itself? Will we watch as the status quo conducts itself under the facade of “tech for good”? Will we wring our hands over the dilemma of social networks without taking practical action to counter their destructive effects? Will we issue calls for increased regulation, “Hippocratic oaths” and pledges to “do no harm”? Will we hold our breath for the Business Roundtable to deliver on last year’s promise for multiple stakeholders being considered in the bottom line equation? Will we celebrate every incremental token of perceived “progress” as banks rake in record-setting profits? Will we ask politely for this industry to regulate itself and clap for their crumbs while overlooking the societal destruction it leaves in its wake?
Grappling with these questions at Zebras Unite during the past year has not been easy. The easy thing is to say, as we have in the past, that Zebra founders stand for “profit and purpose.” But we have come to realize that this sentiment isn’t specific…or enough. The goal of the new economy must be shared prosperity. We believe our grassroots movement of Zebra founders, funders, and friends are vital pieces in this puzzle.
Zebras know we will need concrete actions and processes that we have not tried before. We realize that these actions will be uncomfortable for big tech, investors, and philanthropy alike, because it means figuring out how to materially and meaningfully share power and profit. We recognize that this shift can be painful and messy, but a robust, just, and vibrant future awaits us on the other side of this discomfort.
We’ve come to see that there are two strategies for this reimagining. Both are necessary. It behooves all us to be specific and honest about which strategy we are pursuing, and to ensure that our experiments and investments are concurrent and commensurate.
Reactive Strategy: “Do Better”
In the “reactive play” we take big, existing corporations to the mat and attempt to remedy a fundamentally broken system. We regulate, scrambling to hold the usual suspects accountable for their actions. As they did before the Congressional antitrust subcommittee, we compel tech giants to answer the hard questions: What behaviors does your product promote? What harms are you perpetuating at scale? How can you work more diligently to produce better outcomes for collective good? What are the economic and societal ramifications of your business model? Similarly, we interrogate investors and lenders through the same lens when it comes to equitable lending and investment: How many BIPOC partners are on your team? What is the diversity breakdown of your deal flow and portfolio? What communities are you serving and how? We ruminate on “the repercussions of unfettered power.” We urge these behemoths to make better choices. Stern recommendations and interrogation without action run the risk of the same “sustainability washing” of the 1990s, so we will need mechanisms for accountability. In the year 2050, will we look back and say that shoehorning in ethics and equity was an effective strategy? MSI’s timely analysis offers a chance to avoid the mistakes of the past.
Proactive Strategy: “Ownership & Governance”
In the proactive strategy, founders, corporate leadership, and forward-thinking investors agree to build a new path. They agree to transform, redesign, and pursue concrete action and accountability. Simply put: they agree to create something new and share power and profits. They do that in two specific ways: through ownership and governance. “As long as corporations remain primarily beholden to investors and operate in their current legal and governance frameworks,” says MSI Integrity “they will continue to make decisions that harm people and the planet.”
So how exactly is this done? What does it mean?
(1) Governance: Workers, users and affected communities are at the center of decision-making. What if businesses were legally and operationally accountable not only to shareholders, but also to its workers, users and the communities affected by their decisions? Practically speaking, this means including workers, users, and communities on your board of directors. If you are an existing company, you modify your bylaws. If you are incorporating a new company, you adopt this type of shared governance structure.
(2) Ownership: Benefits and ownership accrue to workers who generate value for a business and/or to the communities and rights holders who are impacted by its behavior. What if the primary economic beneficiaries of enterprises were the workers or wider communities impacted by those businesses? Practically speaking, this means including workers and communities as owners and shareholders. If you are an existing or new company seeking financing, you find investors aligned with this principle, if not immediately, then over the longer term.
At Zebras Unite, we’re taking our chances on a proactive, offensive strategy, while cheering our allies playing defense.
So where will we find the seeds of solutions? Through the remarkable vision of our Zebras Unite Chapter Leads and Director of Chapter Success, Sheeza Shah, we’ve learned that solutions blanket the globe. Whether it’s lessons we can learn from Islamic finance that champion stewardship of humanity on Earth, the next wave of multigenerational businesses in Tokyo, the “New Mittelstand” movement in Germany, linking like minded founders and investors in London, scaling to share power in Scotland, or planning for a resilient, post-pandemic economy in San Francisco, Zebras Unite chapters are local laboratories, leading the research, experimentation, and community of practice for the next economy.
Building the infrastructure to catalyze generational, global change takes time. A year ago, Zebras Unite received generous funding from the Omidyar Network and the Kauffman Foundation. Our task was twofold: to better understand the needs of Zebra founders, and to identify what corporate form we, as an emerging organization, should adopt. One year, countless conversations, and hundreds of pages in legal documents later, we’re proud to enter a new stage of living the values we espouse. We arrived here by designing a more ethical business model to address the very concerns we are calling out. Every day we learn something new, encounter an unanticipated challenge, and grapple with the allocation of power and resources. We want to share the result of these efforts and this journey.
What is a Zebra?
We launched a survey last year of Zebra companies around the world, learning what they stand for, what they’re building, and what unites us. The survey was designed by researcher, evaluator, (and fellow Zebra) Sam Mehoke. The survey yielded 145 pages of surprising results. You can download the full report here and take a peek at the Executive Summary.
These were our guiding questions and some highlights we learned.
What is the identity of a Zebra Company?
- The common life experiences of Zebra founders include: first-generation entrepreneur, woman, person of color, no access to friends & family funding, raised in a single parent household, and/or a first-generation student.
- Our community is guided by integrity and authenticity in how we conduct themselves and business, believing change is possible and urgently needed.
- Venture capital or outside funding was avoided if believed to possibly interfere with company values or our product/service
- Sectors like B2B, economics systems change, healthcare, education, and agriculture were the most mentioned industries in mission statements.
- Companies’ total revenue from customers ranged from $0 — $500M
What are their needs and assets?
- 75% responded with a financial ask under $1M
- Product/service development, strong story & mission, values are some of our community’s strengths. Struggles include finding and converting leads to sales, educating stakeholders & investors, spending time and resources on fundraising.
- Zebras may risk trauma from compassion fatigue (helplessness or burnout in face of systems challenges), and experience additional stressors navigating changing contexts, lack of community, educating misaligned investors.
Which Zebra companies are most likely to be successful? How should that success be measured?
- The community wants Zebras Unite to (1) Help founders find aligned investors, peers, mentors and service providers. (2) Create an aligned investment fund. (3) Create educational resources and cultivate the community’s prosocial desire to collaborate in order to allow experienced peers to mentor, support, and share lessons-learned with one another.
- Most companies were in prototyping or growth stages attempting to solve “wicked problems” (ones with little technical or social agreement on how to proceed). Differing goals, combined with not planning to exit (unless to a values-aligned stakeholder), means that traditional company metrics are likely not adequate for measuring Zebra value and progress towards complex, systems-level solutions.
These survey results crystallized our purpose. Zebra founders need capital to fund and grow their businesses, learning opportunities and a community of like minded peers, and culture change to decrease the amount of time they spend and pain they experience educating investors and customers.
With the help of our partners at the strategic design agency Uncompromise, we articulated our mission:
“We believe that everyone has an equal right to imagine and create the future. We catalyze community, capital, and culture for people building businesses that are better for the world.”
Our values? Truthfulness, mutualism, emergence, and fierceness (naturally!).
What is Zebras Unite?
We then set out to design the best corporate form to ensure that we, as an entity, align with these values. How could we provide capital but ensure that we were transparent in attracting investors who understood the urgent need for governance and ownership innovation? How could the commitment to our mission and values be at the heart of our work? And, most importantly, with a community of 6,000 online members and 45 chapters on six continents, how could we reward and recognize those members with ownership and shares in the enterprise?
What resulted, with the help of our brilliant and creative lawyers, Jason Wiener PBC and Catalyst Law, is a “tripod” organization that fulfills this mission. Presenting Zebras Unite Co-Operative.
Over the last few years, there have been remarkable advances in co-operative law. Specifically, cooperatives have caught up with the 21st century and can now accommodate an expanded set of business pursuits; make room for investors along with other shareholders; and are enabled by contemporary technology. The more we researched it, the more we realized that not only could we be a co-op where individuals and companies, founders, investors, and institutional partners all own shares of this co-created enterprise, but there was further room for creativity: it could also operate an investment company (and so Zebras Unite Capital was born), and we could anchor its mission by vesting a “golden share” in the Zebras Unite non-profit entity.
Haven’t heard of a co-operative? Don’t know what a co-operative does? We direct you to our friend Greg Brodsky’s “The 3 Reasons We Don’t See More Cooperatively Owned Businesses. In short: 1) Most people don’t understand what a cooperative is and how it works; 2) Comparatively, “traditional” ownership models feel easier; 3) It’s harder for co-op entrepreneurs to access start-up capital.
Are we a for profit or a non-profit? Are we a fund or co-op? We are all of it. We think it’s the perfect way for aligned leaders to invest treasure, talent, and time into a mutualistic model that redefines business as usual.
- Zebras Unite Co-Operative is owned and governed by its members. We are in private Beta of the co-op and extending early access to our chapter leaders and founding corporate members. When we launch this fall, we’re looking for members (founders, companies, individuals, investors, partners) who want to own and decide this future, who are ready to roll up their sleeves and reimagine economic enterprises that will better serve ourselves, our stakeholders, our families, our communities, our planet, and our economy.
- Zebras Unite Capital (ZUC), a joint venture of the co-op and Second Muse, is a subsidiary investment company that will make direct investments into member companies. In other words: co-op members are also shareholders in the capital mechanism that they benefit from. Zebras Unite Capital will create a number of new funds using our Future Economy Lab process, and provide advisory services.
- Zebras Unite Non-Profit advances research education around capital, culture, and community, and topics like alternative ownership and governance, as well as policy interventions. This work is encapsulated in our ongoing “Exit to Community” series with the Media Enterprise Design Lab at the University of Colorado, Boulder.
In the past few months we’ve socialized these concepts. It’s been some of the most challenging work of our movement to date. It’s dispiriting to work so hard designing new, hybrid, holistic, mutualistic models only to be viewed through the same antiquated lens.
Slowly but surely, people are starting to get it. Companies like Basecamp are supporting the Exit to Community work, recognizing that there needs to be a better way. The beneficiaries of big tech are breaking rank, investing in developing shared ownership models. Forward thinking philanthropic leaders like the Surdna Foundation, committed to building truly inclusive economies, are constellating loan funds with first time managers, serving underrepresented entrepreneurs in local communities across the country.
A report from Zebras Unite wouldn’t be complete or truthful without sharing how the four of us, the Dazzle Doulas, have grown together through the struggles we faced. This year, we invested time and energy to discover how four strong women, each with our unique talents, lived experiences, blind spots, and multiple responsibilities could collaborate and communicate more effectively. We are grateful for the facilitation and compassion that Malii Watts Witten brought to these internal conversations. We are believers in the power of self-awareness and a lifelong commitment to personal growth and change. We are profoundly grateful for the funders and allies who, when they see us working nights and weekends, while concurrently pursuing our companies, ecosystem work, and raising families, say to us, “Tell me more about what you’ve learned, how you share power, how this represents a new leadership paradigm, and how I can support this work?” rather than asking, “So, who’s in charge?” Sharing systemic and economic power tomorrow starts by courageously sharing power in relationships today.
Join Us
And now (drumroll…)! we are thrilled to introduce you to our new website that captures much of this information, and invite you to the Season of the Dazzle, three months of programming with our local chapters, friends, and allies to dive deeper into the topics we’ve outlined here, and beyond. We want to share power and co-create the future with you. We are still putting together the detailed schedule, but here is what’s shaping up over the first 4 weeks (which you can also find on our website)
8/6, 10 am PT: “The future is cooperatives: co-ops as a vehicle for economic liberation,” a session with our lawyer, Jason Weiner, and Lauren Ruffin, Co-Founder of Crux.
8/13, 11 am PT: The State of the Dazzle — an AMA with the four Doulas about the journey
8/19, 9 AM PT: A session with Amelia Evans of MSI Integrity on their report and the implications for tech
8/26, 6:30 CEST: Berlin Chapter event (open to all!) How to hold on to beliefs as an organization — the story of an impact design ad-venture
8/31, 9 AM PT: Exit to Community Zine release and cohort information session
Thank you.
We are immeasurably grateful to you if you’ve managed to read this far. Thank you for your care and curiosity. And to the following individuals and organizations: the 6000+ members of our Zebras Unite online community, our Chapter Leads (Kasia Odrozek, Alex Freeman, Daisy Ford-Downes, Esme Verity, Gary Marx, Johny Tay, Yoshitaka Tabuchi, Yuji Suyama, AseTila Koestinger), Second Muse (Chad Badiyan, Todd Khozein, Natalia Arjomand), Hearken (Chelsea Haring), Uncompromise (Madelynn Martiniere, Cameron Burgess), Smith + Connors (Talie Smith, Stephen Forbush), Omidyar Network (Sarah Drinkwater), Kauffman Foundation (Phillip Gaskin), Center for Cultural Innovation (Angie Kim), Surdna Foundation (Mekaelia Davis, Patrice Green), Common Future (Rodney Foxworth, Eric Horvath), Basecamp (Jane Yang, DHH, Jason Fried), Liz Roberts, Susan Towers, Sheeza Shah, Sam Mehoke, PIE (Rick Turoczy), Joe Murphy, Linzi Fidelin, Vanessa Roanhorse, Nathan Schneider, Janine Firpo, Village Capital (Allie Burns, Apoorv Karmakar, Victoria Fram, Rob Tashima), Jason Weiner, Francisca Pretorius, Catalyst Law (Kimberly Pray, Kate Kilberg), Shauna Noah, Arthur Jones, Ashley Lukens, Business for a Better Portland (Ashley Henry), Danny Spitzberg, Charlie Dana, Scott Heiferman, YesVC (Caterina Fake, Jyri Engeström), Bloomberg Beta (Roy Bahat), members of the Inclusive Capital Collective, McKeever Conwell, Nathalie Molina Niño, Jen Horonjeff, Greg Brodsky, Dawn Barber, Jonah Sachs, Victor Hwang, Howard Rheingold, and so many others who have believed in the power of this movement and community.
