Decisions, decisions
Wellington-based worker-owned software Loomio allows people to reach agreement in an inclusive way.
Wellington-based worker-owned software Loomio allows people to reach agreement in an inclusive way.
On October 15, 2011, Occupy demonstrations were staged around New Zealand, part of a worldwide grass-roots movement against corporate greed and inequality. When Unicef New Zealand executive director Viv Maidaborn, then unemployed, joined the Wellington Occupy movement, several hundred people, mainly aged under 25, were sleeping in tents.
“They had rejected the notion of hierarchical decision-making, so were struggling with how to make decisions,” she told last month’s annual Morgo conference for entrepreneurs in Queenstown.
Some protesters told her they spent five hours in a tent discussing something without anything being agreed. It reminded her of a Wellington women’s health collective she belonged to that disbanded after five years because it couldn’t agree on whether smoking should be allowed at meetings.
“Occupy all around the world failed because people didn’t have the right tools to make decisions,” Maidaborn says. “Will, conviction and philosophy are not enough.”
Some Wellington Occupy activists joined social entrepreneurs from the Enspiral network four years ago to create an online resource that allows people to make better decisions in an inclusive way. They originally intended it just for activists, but the co-operative’s open-source software, Loomio, has since helped thousands of groups, including governments and businesses.
About 100,000 people are using the software in 95 countries and 35 languages. Each week, more than 200 new groups adopt it, 7000 comments are posted and 340 decisions are made.
Early momentum came from unexpected places. Hungarian university students translated the software into their language and formed a group to discuss government moves to limit education. Their lecturers followed suit, as did a group of high-school students.
An early commercial customer was Wellington City Council, which wanted to consult on alcohol policy with stakeholders – from alcohol manufacturers to concerned mothers. The recommendations were “amazing”, says Maidaborn, who now chairs Loomio’s board, though what the council did was quite different. “It was a good lesson on the difference between great discussion, recommendations and the authority to act.”
Maidaborn started an online group with her Unicef staff for their annual pay review, telling them how much money was available and asking how they wanted it distributed. She ended up implementing the group consensus that any pay increase should be performance-based and shared equally among the deserving.
BALANCING IDEALISM WITH PRAGMATISM
Co-founder Richard Bartlett says the developers have retained the original values and the mission to make it easy to include anyone in decisions that affect them, despite growing in scale. “I would never have believed if you’d told me at Occupy that I’d be talking about investment and business models, but it has been a series of logical decisions to try to balance our idealism with pragmatism.”
Loomio’s business model is based on an annual plan that follows an “agile” software development process of iterative steps and feedback. It has daily “stand-up” sessions to keep work in progress on track, fortnightly “sprints” to meet intermediate deadlines, three-monthly planning meetings and six-monthly retreats. Decisions are made collectively, and although there are no bosses, co-ordinators are chosen quarterly for different work streams.
Maidaborn says Loomio is nothing like the usual tech start-up, which became its biggest challenge.
“The people I’m working with on it rejected almost everything, even things as basic as there is a market with a value,” she said. “Words like activation, revenue retention and referral are now what we’re designing our sprints around and that would have been unimaginable four years ago.”
Originally, team members came to work when they wanted and worked on what they wanted to. Everyone ended up working too much.
Cash-strapped tech start-ups typically sell equity in exchange for venture capital funding. That didn’t fit Loomio, where workers own shares until they leave. Loomio’s first crowd-funding raised $5000 to help feed and clothe those who had taken part in Occupy, and it followed that with $180,000 of social impact loans from family and friends, which helped produce a trial version of the software. A second crowd-funding campaign in 2014 saw 1600 people globally contribute US$125,000, which funded Loomio 1.0.
Last year, it got US$60,000 in philanthropist grants and toyed briefly with the idea of becoming a non-profit. However, the team decided it could deliver better customer value as a social enterprise, but needed serious money to grow. It issued US$450,000 worth of redeemable preference shares to a small group of values-aligned investors, headed by South Korea-based social venture fund Sopoong Ventures. The shares can only be bought back by the co-operative rather than openly traded and don’t include any governance control.
“They’re [for] people who are interested in a long, slow return but fast social impact that has a scalable ability,” Maidaborn says.
KEEP IT SIMPLE
Loomio has tried to make its software as easy to use as email in the hope that its convenience will encourage everyday use. Redesigning the software last year to allow for use by blind people helped advance that, Bartlett says.
The open-source software has always been free and Loomio added an online subscription model last year to sustain the Wellington-based business. It offers customisation, analytics and consultancy services on top of the basic software-as-a-service product, with monthly subscription prices ranging from US$19 to a premium US$179 version.
In the next couple of years, Bartlett thinks consultancy services will grow along with Loomio becoming a platform that organisations incorporate into their IT systems.
Loomio made about $250,000 in revenue last year and Maidaborn says the co-operative is growing strongly. It did its first marketing last month, and within 24 hours of putting up a handbook on Facebook of how the enterprise had grown, 10,000 people had read it.
The venture has changed the way Maidaborn acts as a business leader. As an ex-chief executive, she was shocked when sitting down at the table at Loomio to be critiqued by younger team members in a way she hadn’t been for years.
She says it was good for her to have to argue clearly and compellingly to win over the group. “Collectively, we make better decisions when we take in diverse views,” she says.
“We are figuring out ways of letting that be efficient and not lengthy and tortuous, but away from the privilege of voice, to the best idea and
process.”
“Occupy all around the world failed because people didn’t have the right tools to make decisions.”