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A community-company incubator

Expanding the field and the ambition of the debate these last weeks…

Yesterday, Saturday, over vermouth and under the lukewarm January sun, we were going in circles around the idea of creating a school of community companies. The more we debated, the more we had to face the criticism that, in reality, we had fixated on the most “appetizing” part to us, losing sight of the big picture: the need to set up a new kind of integral incubator, that starts with people and prepares entire small communities. Or, in Indiano organizational thinking, going from considering “The Art of Things” as a tool to prepare and shape internal projects to giving it an autonomous and ongoing life at the service of our surroundings… which implies assuring its sustainability. Back home, a comment in the same vein from Juan Rico only helped us make up our mind. So, let’s start sketching out ideas…

Differences between what we want and a customary incubator

  1. Origin in people. The starting point is people, not projects or businesses. People, small communities (families, groups of friends, discussion groups…) that have reached the point of proposing to build a community company.
  2. Destination in the community. But a community company is not a conventional start-up — there’s no capitalizing on expectations of capital gains and expansions, simply because the key to the model is that the company must always be property of community members. Although it can be financed in a complementary way, investors shouldn’t have a speculative view of the stock; its profitability will come from distributed surpluses, not from the sale of their shares to new investors in successive capitalization rounds. In other words: it’s a classical investment.
  3. Scale and capitalization. Community companies are not large-scale undertakings, but rather large-scope; they don’t need millions in capital. In fact, our experience tells us that overcapitalizing is more dangerous than undercapitalizing, because it results in oversizing, which can turn out to be a dead end. While the scale of initial of a start-up is between 100,000 and a million euros, a community business’ is between 10,000 and 20,000 euros.
  4. Free is better than open. There’s nothing more secretive than a project in gestation to become a start-up; and there’s nothing that benefits a community company more than taking advantage of the existing commons, like free software, business models, ideas… and above all, there’s nothing better than creating it on the basis of interaction with peers. That’s why “hacker hostels” have emerged, and the Y Combinator has set up a successful model of new incubators in the US.
  5. Community as objective and as know-how. The key to community businesses is… knowing how to think about commercial/business matters with the mindset of the community. The most successful incubator initiatives in the latoc world, like TEC Monterrey, with more than 1,800 businesses successfully incubated, are the ones that have been able to understand the centrality of family and community relationships.

How would an integral “community companies” incubator work?

  1. It would would select candidates (with the novel Storge systems).
  2. It would give selectees a preliminary online contextual training through an agenda of readings and commentaries, which would also be selective.
  3. Selectees at the second phase would spend three months as interns at a residence much like the hacker hostels: modest (cots for all), but with broad and luminous common spaces to work and interact.
  4. During the residency, selectees would design and develop the basics of their projects and would collaborate with others on theirs. All with advice and monitoring by our team. Objective: go from cooperative learning to collaboration and from collaboration to the design and founding of projects.
  5. After three months, the entrepreneurs would return home and, using what they’d learned and worked on, would develop a new phase of debate and work with the members of their community, giving the final shape to the project, incorporating the business, and setting it in motion. After monitoring their development online, some of them would be invited back again for brief stays, during which our team, much like the Y-Combinator, would organize informal dinners with possible investors — only one per dinner — in which the results of the work would be presented.

How would the costs of an incubator like this be covered?

  1. The online courses are paid for by the successful candidates, and we calculate that, without many losses, costs would be around €300 per person. More could leave out interesting people, and less would likely produce an adverse selection.
  2. The residency and incubation period has a “hostel” cost — we’d have to look for providers and write a budget — and some monitoring costs per hour, which would require a (not necessarily overly generous) external sponsor. This sponsor or group of sponsors could have a preferential option on the business shares that may result, assuring them only that they would be the first with the option to participate, but also, perhaps, certain conditions of social and economic profitability. We would have to think that no project, under any circumstances, will have more than 35% external capital.
  3. Community entrepreneurs would make a commitment that any company born of the work done in the residency will donate a percentage of its shares (or money, using some equivalent formula) equal to 3% of its annual surpluses to the project. With that, over time, we could expand our services and reach full sustainability.

Translated by Steve Herrick from the original (in Spanish).

«A community-company incubator» recibió 0 desde que se publicó el Martes 29 de Enero de 2013 . Si te ha gustado este post quizá te gusten otros posts escritos por David de Ugarte.

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