Employee Owned Source Code

What It Is

  • Employee Owned Source Code is a new way to organize software projects that is designed to allow designers, software engineers, QA engineers, and other software builders to collaborate and share equity on software projects.
  • We believe that venture capital is superfluous to our goal of building marketable software products. Companies like 37 Signals have already demonstrated this point, though they may have organized differently in other respects. We are working for ourselves, not someone else.
  • We build equity by a commonly agreed metric. On the Goalboost project, we use the metric of "one hour per share", which mean that a time and billing application was the perfect way to simultaneously dogfood an app we can sell with a tool that helps us manager our equity model. Everyone contributing to the project gets a share of the product equal to the number of hours contributed / total hours contributed. That's not the only metric we could use, but it's a useful one.
  • The flatness of the equity arrangement means that certain skills such as QA may end up being better compensated relative to development than they might in other organizations. However, given that the only capitalists on the team are we builders, development still plans to do quite well.
  • All shareholders get one vote on hiring decisions and other common decisions we need to make, so although shares may be distributed unevenly (according to hours contributed), our group consensus is not an oligarchy, but a democracy. See the "one worker one vote" discussion in What is a Worker Cooperative? (pdf).
  • It is a software licensing model. Currently for Goalboost our source is available on Github to allow others to decide whether to contribute, but we may decide at some point for to make our code proprietary and available to contributors only.

What It Is Not

  • Employee Owned Source Code is not open source. The goal is to build marketable products for profit. Our work is copyrighted and proprietary, just as it is on any closed source project. The difference is, the owners of it are we who created the value.
  • It is not centralized. We work where we live.
  • It is not a software development methodology. We do what we agree is right to build the software.

Written by John Lockwood in misc on Wed 11 November 2015.