The basis

Compared to a 'traditional' startup company, there are three distinct basic value that are the building blocks of a Smartup:

  1. Collective Ownership: the practice of spreading out ownership equally among people that are part of the Smartup, enforced by the Book of Owners.

  2. Collective Craftsmanship: the practice of spreading out the possibility to work among all people that are part of the Smartup, enforced by Smartup Teams

  3. Collective Governance: the practice of spreading out governance among all people that are part of the Smartup, enforced by The General Forum

Collective Ownership

We are used to the idea that technology is owned by founders and shareholders. Usually, the amount of ownership is based on the amount of financial risk the founders and shareholders took in the early days of the company.  A Smartup has a completely different approach to ownership. It spreads out ownership equally among the people who are building and governing the idea together. Ownership is given to those who want to contribute to the idea, not to those who want to invest in it. In doing so, it completely changes the nature of ownership. It becomes less about profits and more about responsibility. 

In a Smartup all members are equal in ownership. This number is based on the number of people being part of the Smartup. If there are 100 members, everybody owns 1%, no matter how much money or work they invested. Ownership is recorded in the Book of Owner: a (read-only) document that can be accessed by all owners. It's like the phonebook of your Smartup. You can become an owner by buying a licence on a crowdfunding website. Later more about this.  

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Being an owner of a Smartup is not about who created the idea or had the money to invest, it's about who is willing to own and grow an idea into the best version it can become. The more people step up to that plate, the healthier your Smartup becomes, the better the product or service it produces and the higher the profits that return from the market will be. In a lot of ways, being the owner of a Smartup is more being like being a citizen of a new country than a shareholder of a new company. You are expected to contribute in the creation of the country. You've got all kinds of rights and at least one obligation: to be responsible for what the Smartup is creating. With your rights you can perform that responsibility. You've got the right to vote, supervise and work but are also obliged to offer your best and participate in good faith and with good intention if you want to keep those rights. To show your good faith and good intention as an owner, you can get busy with two processes in a Smartup: to work or to govern (ideally you do both).

The book of owners

Smartup ownership is documented in The Book of Owners. The Book of Owners is a document (in the Smartup Zero experiment this is a read-only Google Spreadsheet)  where all owners are registered. How people can become ownwers you can read in the subchapter ‘Smartup Zero: the experiment’.

Collective Craftsmanship

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A  Smartup is a company where people need to work on a product or service. The goal of a Smartup is to create, maintain and exploit a solution that helps people in their fight for the protection of our nature. There is a lot of work that needs to be done. The organizational structure is designed to stimulate owners to become workers. One key element to enforce that is the very simple and clear rule that the only way to earn money in a Smartup is to become a member of the workplace.  If you are a member of the workplace you can make efforts to solve tasks. You are paid when you are working on tasks. How this all works is clarified in the chapter 'Anatomy of a Smartup'. To fund this method of collective craftsmanship all money being raised in the crowdfunding rounds is immediately available for the workplace to perform all the crucial work that needs to be done to become that marketable and sustainable product that the world needs and wants. How the workplace is organized you can find out in the following chapters. For now, it's important to understand that Collective craftsmanship means that you are always working in groups and all groups together are responsible for the result.   

Smartup Teams

Working for a Smartup always happens in teams. Depending on the kind of service or product the Smartup is creating, you can subscribe, based on your own talent, skills and willfulness, to a specific team. When you are part of the team you can contribute to specific discussions and aplly for roles inside your team. How this works exactly you can read in the subchapters that follow.

Collective Governance

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All have the right and obligation to govern. Governance in a Smartup translates best to being a caretaker. It appeals to the responsibility you have as a Smartup owner. As you will find out in detail in the chapter ' The Metabolism of a Smartup', it takes place throughout all layers of a Smartup organization and is done in all kinds of gradations on all kinds of levels.  However, the main place where governing takes place is the General Forum (GF). The main function of the General Forum is to perform oversight over the workplace (where workers work) and enable owners to deliberate on key issues that arise from the workplace. Those are the two basic principles through which we govern: deliberation and oversight. Deliberation is a process of informed discussions leading to decision making, often through voting. Where the workplace is the heart of our collective craftsmanship, the General Forum is the heart of our collective ownership and governance. To be able to deliberate and perform oversight, you need to be informed, engaged and critical on what the workforce is producing and how they are performing. 

The General Forum

The General Forum (GF) is the lifeline of your Smartup. It’s the public square where ALL owners exercise their ownership rights and obligations. It’s the only group where ALL smartup members are together. It’s the area where discussion, suggestions, criticism, voting, and organization takes place through the process of deliberation.  It’s basically the public space for all members to oversee what is happening in the Workspace and talk about it. It’s also the place where you can measure the viability of your community, one of the parameters that can indicate the health of a Smartup. A Smartup thrives on the level of people’s willingness to commit to the responsibilities that come with being an owner of a Smartup.

Smartup Finance

A Smartup, in many ways, just operates like any company. For example, it has a workforce that is getting payed. One of the unique aspect of a Smartup is that it’s financing this workforce solely through crowdfunding and profits. No other financing mechanism are allowed. When a Smartup is in the Four Phases of Creation (next sub chapter) it only can use crowdfunding. After the product has gone to market, profits are used to grow organically. So let’s start with Crowdfunding. How does that work for a Smartup?

Crowdfunding

Basically a Smartup is using crowdfunding as a method of financing its own crowdsourcing activities. During ‘the four phases of creation’ the Smartup is constantly crowdfunding. Each phase has its own ‘budget target’ and campaign strategy. A Smartup ALWAYS starts with a crowdfunding campaign for the validation of an entrepreneurial idea. If the Validation phase is completed and all the thresholds are reached, the crowdfunding campaign for the design phase starts. 

The big difference with ‘normal’ crowdfunding projects is that, next to the normal way of backing a project, people can buy a membership to the Smartup. Or, if they don’t have the money to buy, earn a membership to gain access to the Smartup. Being part of a Smartup has real value because of two tangible perks:

  1. You will be registered in the Book of Owners and are officially an owner of the Smartup.

    • For Smartup Zero this is a Google Spreadsheet that all community members always have access to (read-only).

    • All members have the exact amount of ‘ownership’. If the Smartup has 100 community members everybody has 1%. When there would be 1000 community members everybody has 0.1%, etc. 

    • When the product goes to market, the Book of Owners closes and no new members are allowed until the Smartup democratically decides to do another crowdfunding round. 

    • When the product goes to market and creates profits these profits can be used to pay out the community with dividend.

  2. You’ll get the opportunity to work for the Smartup and earn a living. All members have voting and information right. You will be able to follow and track all progress and are able to vote on crucial decisions. Depending on the license you bought, you will be eligible to work and earn money as well.

Earning money in a Smartup

Although money should never be the main incentive for people to work for a Smartup, a core principle is that a good effort should always be rewarded. That’s why the money that is being raised through the crowdfunding campaign is immediately available for the community to perform all the crucial work that needs to be done. The more money is raised through crowdfunding, the more budget each team has available. This is a unique mechanism that also drives community members to spread the project in their own network for more backers.