 So a couple things, one the conversation we wanted to make sure and there's a few of them happening in the next two days One also happened this morning another panel We really want to kind of explore different models for funding some of these ventures and Other than venture capital and it's not to say that venture capital is bad because you know like as an entrepreneur I've certainly enjoyed The support of venture capitalists and I also have been an investor in many companies. It's more the the idea that Not every company or every project is appropriate for venture and Secondly and perhaps more importantly from our perspective that the whole idea of the collaborative economy Invites this whole other notion of equitable distribution and participation my way of talking about it is that there's value creation and People who are founders for example or investors create a certain amount of value and then there's value capture and The VC model is designed in a particular way so that the investors capture a lot of value As opposed to another model for example with Jonas Salk You know where dr. Salk invented the polio vaccine and he decided to open source it rather than create a Pharmaceutical company and people estimate that he gave up seven billion dollars in value Financial value, but but optimized for a different kind of value social capital and and you know global health so So that kind of prompted us to and for me to bring together a collection of very talented characters to look at how companies are being funded and What they're thinking about the creation of the company how that matches the way that they are deciding who are the right sorts of Investors and then what that means about the exit So including like should these companies exit because if they're owned by The community or the people what does that look like so to join me today? We have Janelle Orsey who you may recall from this morning still in the same lovely outfit Janelle is one of the founders of the sustainable economics law center. She's an attorney and she is Shockingly and this should be tweeted not the only Janelle in the room I Don't know apple stone is a founder of a company called other machine company that's part of other lab and and Danielle is an entrepreneur and has a very deep science and technology background And their company story is very different a whole different way to approach Designing products testing products building teams and growing capital and then Never thought I'd have to say this but Janelle number two Janelle Hellman also a lawyer but not acting as one at the moment a founder of a company called kit order that actually Creates community and supports sports really and sporting teams and she can explain more about the company But the similarity here is that we're looking at really kind of thoughtful and inventive ways to You know test and model How companies are built and how capital is created? so Janelle Kellman, can you so first of all I wanted to thank everybody who's here and these Folks for being a part of the panel. Can you tell us a little bit about? kit order what it is and if you want to why you started it but also How you've gotten it this far from a funding perspective sure. Hi everybody. I'm Janelle come and I'm older apparently So I get to be number one. I think yeah So my company is called killer comm It is a SAS based technology platform to facilitate e-commerce for teams and groups and our tagline really is creating commerce around community So throughout our lives. We see people with shared common interests. It could be a kickball league It could be truly being it could be a corporate group It could be a fundraising event and those folks at some point in time want to feel a greater sense of community And one way that they do that is to connect through identification With similarities and what I mean by that is the same t-shirts right the same uniforms and as an athlete growing up I found that that team dynamic really created very strong Community very strong belief in one another and it's something we try to replicate at the e-commerce level I've often sort of described the company sort of a box within a box because At the micro level we're creating micro sites For teams and groups that want to be able to transact around their shared interests We primarily sell our product at enterprise level to companies whose customers are actually these groups of people But we also have a site that's available for any type of individual who wants to go to just kid order comm and and create one of these micro sites as well and Can you give us an example like you do mean like soccer team or sure like let's take maybe you're a soccer dad or soccer mom And your kids have to wear the same outfit as everybody else on the team They also need to get shin guards and cleats and so on and so normally it's you know The kid coming home from school or practice with a spreadsheet That's all crumpled up and sweaty and dirty and in the back pocket and getting a check from mom or dad and coming back Into the coach and the coach is using pen and paper right and our system is meant to facilitate that But it goes way beyond just athletics really into Helping people connect with one another when they have a shared interest. So we see a lot of sites created for fundraising I want to do the Susan G come in 10k run I want to do a challenge athletes foundation bike ride How do we come together either to handle the registration or again this similar apparel? And I started it really just to solve an issue that I was having as an athlete on the cyclists I was leading a 90-person cycling team was racing at the time And I had 90 people emailing me and telling me this is what I want and the checks in the mail and it just was horrendous But what I found was that it was relevant again across athletics across Communities it's relevant for neighborhoods and so one of the ideas actually that Lisa and I have been talking about for many years now is How can we leverage this platform to make it easier for neighborhoods to actually come together to either share resources or even to do group purchases and to facilitate that type of Interaction within micro communities and larger communities And so you funded the So far you funded the platform That's right. So initially yeah, so I was practicing environmental law at the time I did a lot of renewable work for years, and I thought well, this is just my own issue I'll just I'll just go ahead and figure out you know what I would do what I would want it to look like and Took some money on my bank account and partnered with a With a developer and we built something up And one of the really wonderful things about bootstrapping is that you don't build extra features that you don't need And you also get a lot of feedback from communities as to what is relevant to them And so I know this is about creating value and how you find that value I think that our product is where it is and as good as it is because we bootstrapped because we were able to say This is actually essential to this action or this function or to this community and that's why we're gonna build it We're not gonna build it just because we can and we just have extra money kind of hanging around Okay, great Danielle, can you fill us in on other company and where you magically made money appear from? It's definitely magic. Um, hi, I'm Danielle and I started our Company as a project which came from it was basically a DARPA funded project for education I think about the origin of our company actually as kind of like the ultimate crowdfunding like when you get government funds It's from everyone. So like all of you in fact Helped support our company in some sort of weird, you know twisted way But I think it it's important because you know, we We started because DARPA wanted desktop-sized Machines to teach kids manufacturing So bringing industrial technologies down to a small scale and making it manageable to get kids excited about hands-on engineering And get them exposed to what does it look like to control a computer or control a machine with a computer to cut a thing and You know, we did some development with DARPA and that was really a good experience for us We ended up, you know because that funding for that that project Was removed during the sequester. So that was kind of a drawback But it forced us to to run a Kickstarter campaign So it was like first was the ultimate crowdfunding with government money and then second was a Kickstarter campaign where? You know, we put our machine and this is a it's a 3d cutter. So it cuts 3d objects out of rigid materials like wood and metal and whatever you put in there so we put our 3d cutter up on Kickstarter and we got great response and actually this This weekend will be maker fair and that's one year from when we like launched our Kickstarter campaign And I looked around at the team of people that were you know that were in the office on Monday And it was like wow, there's 15 of us now There was nothing like a year ago like we had a prototype and a promise and like but it was really only the DARPA funding and then the Kickstarter campaign that really kept us going and Allowed us to basically begin what we believe is the beginning of like, you know It's the it's manufacturing small batch manufacturing Revolution in terms of providing hardware and we also do software to people One of the interesting things is we we then raised venture funding So we did kind of the whole the whole gamut of dealing with different types of people and different Constraints and expectations and now we're to the point where we are sustainable and we were able to go to a model Which looks more traditional But there's no way we could have gotten there without Aspects of crowdfunding whether it is government or Kickstarter. So it's really it's such an interesting transition for us but yeah Great. Thank you so much Danielle. That's a really good story and very different from Janelle's path You know, so we know a little bit about who we're talking to here. How many of you consider yourselves entrepreneurs? Okay, and and how many of you are? You know entrepreneurs actively right now running a company or starting a company or project Okay, great and hold your hands up for keep them up for one sec. How many of you are venture funded right now? Okay, great So one. Oh No, you were just you didn't have caffeine at lunch Okay, that's a lot of possibility out there Yeah, so and then for those of you that aren't admitting that you're entrepreneurs, but you didn't raise your hand Are you? You know quietly incubating projects in your mind or so are there people who are planning on Starting something who haven't started it yet Okay, cool So somebody that who's a category that you wouldn't you just want to raise your hand and I didn't Great, what's the category support staff Operations, okay, meaning like that. That's the role that you play Okay, that's good. That's a good point. Okay, so who is also on the operation side Excellent see you're not the only hand. Okay. Thank you for that so So listen that for us the conversation just to be clear You know with respect to the sharing or collaborative economy. We're in a process the movement is you know, not in its infancy but not like it's not mainstream and What we've seen happen a lot is financing has taken sort of The first wave of companies many of them, especially the ones that are top of mind are those that have gotten venture capital and what we're Thinking about and exploring is is two pieces of it one. How do you create the capital? Where do you go to look creatively for capital? That where you're in the case of Danielle not yet something that venture capitalists will support so you can do your defining and refining of your business model in other ways or in the case of Janelle, you know, maybe you're never going to take venture capital. You might never need it, correct? Well guys full disclosure. We're actually starting to look but Yeah, we didn't we didn't want to go that path initially it has a lot of constraints Particularly if you feel like you have a vision and potentially a strong personality Maybe I have that And you and you want to grow that you want to do it in a certain direction and I also think it's important Especially for the share economy to create profitability Because I think if we can create value in the sense of real numbers and digits And I think people start to take us a lot more seriously and understand where we're going with this that it is something that can succeed And so I think profitability is not something to be overlooked when you are actually looking at your business plan I always ask future entrepreneurs. Well, what's your revenue model? How will you make money because it is important for your overall sustainability? So and the and so the peace and there's one piece which is running the business and the other part has to do with you Know sort of when you take venture capital investment, there's a You know very explicit expectation that there'll be an exit and so, you know, we were speaking earlier Matthew and some other folks in a in a related conversation earlier in the day that you know So just as an example the entrepreneurs that are in the room how many people here are Confident that venture capital would be would provide the perfect exit for your business model Okay, so that's why we're having this conversation is is essentially My view is the beginning that the first companies to come out And I think I gave this example earlier, but I can't recall that, you know, like for we started a foot photography company called Oh photo in 1999. I Raised 60 million dollars of venture capital money Which is a lot of money by today's dollar, you know in adjusting appropriately The thing is that in 2006 When I looked at starting another company and did the math of what it would what it would cost to Start Oh photo in 2006 seven years later any guesses What the number was One and a half million. No, it's a lot. It's way less. What yeah, it was between one and a half and two million dollars So, you know, we're looking at less than five percent Required and what happens and I think you heard earlier today Brad Burnham Usv from Union Square Ventures talking about skinny platforms and what happens is that the first, you know one to ten companies that have to build platforms and business models and and You know wrestle the alligator of the press and train people on what the collaborative economy is and fight with the Regulators and all that kind of stuff. They spend a lot of money But they make it a lot cheaper for those who follow and so those of us Who are now going to start things are in a really different kind of position? And we can leverage actually what's gone before us we can learn from the models and basically copy a lot of You know stealing is the new sharing We can basically copy what people have done before so so I think that you know what we're realizing and what we're seeing And the reason we wanted to have this conversation with you guys is that The opportunity is to create different kinds of exits because we can create different kinds of capital structures and so Janelle has been spending as you know, she's already confessed a lot of time looking at tea corporations, which is the legal entity but essentially cooperatives and And so do you want to say anything before we kind of delve into Conversation and questions and fighting hopefully with each other Yeah, a few things have popped up in one of them is cuz Dan from Dan from solar mosaic was gonna be here talking about equity crowd funding So I thought I'd also just share that when I co-founded the Sustainable Economies Law Center with another attorney Jenny Kassen she was a securities lawyer And I never thought of securities law as being a social justice Issue but securities really dictates where people can invest their money and where they from where they can take investment And in that respect it dictates the flow of wealth in society completely And so now we have a federal crowdfunding law that's soon to be implemented We hope handful of states have recently adopted crowdfunding laws. California has one right now AB 20 maybe 2096 Which could use some improvement truthfully, but it's gonna just open up huge doors to receiving capital from wide varieties of community members And so whether or not something is structured as a cooperative or tea corporation You know a company like yours Janelle has potentially soon very like wide Wide variety of opportunities to receive capital from community members from athletes from the people either who use the site or who may Use the site in the future or just think it's really awesome so Yeah, and I think we can also take a cue from the community supported agriculture movement because the idea there was people were Recognizing it's it's hard to farm. It's hard to get the capital to start a farm So what if consumers? More or less adopt a farm even adopt a farm before it has planted its vegetables by buying a share of the vegetables in Advance so the the farmer and the consumers share in the Capitalization they share in the risk to a certain extent because if it if it's a bad harvest year It's not going to be as many vegetables, but they share in a sense in the profits because if it's a good harvest year They'll they'll both enjoy that so But anyways, I think as we're creating new companies new platforms for the sharing economy We can do so with that community Supported frame of mind if we as a movement as a community of people say this is a platform that I want to have In the sharing economy then we can sort of wrap around it and support it like that and agree to join it before It's even started or finance it By you know making a micro loan or an equity investment But cooperatives keep coming to me as being a solution for so many reasons and Reasons that I spoke quite a bit about this morning. I think a lot of you heard but I Guess a little bit more. I mean less about why cooperatives and a little bit more about how I do think that the current Context enables them so much more because of the potential to crowdfund and because of just Technology and the amazing ways that we can account for things and so if you have a platform where The users are the owners and you want to reward them for the various ways in which they're participating you could Calculate their share of the dividends from the company, you know, they'll receive dividends from the company But it could be on the basis of How much money they generated for the company How many members they recruited for the company how much they participated in the forums or came to community events? Whether they voted in elections Whether they wrote customer reviews that got good thumbs up, you know All of these things that are good behaviors that create a vibrant community could help people accumulate points So it's the new measure of people's value that they create and that they contribute It's not just money But then if to the extent that there is money Generated through the system you can distribute it back to the users on that basis and it creates a whole different set of incentives and motivations and it redistributes the wealth in society, which is really What we need to do and then the the governance of it. It's you know, there's a lot of challenges that need to be sorted out and I think Everybody in the room is probably going to have different ideas about how to set something up as a democratic organization It's a cooperative But there are like the company that I'm working with Loconomics You know, we're having a lot of questions right now about like what if this becomes huge? How do we take nominations for the board of directors because you know REI is a cooperative But the board of directors Nominates the next board candidates and then they go ask the members who do you want to vote for? Which is not you know, you don't actually have a real opportunity as a member to influence things but So we're trying to think I don't like that model But we're trying to think about how do we actually meaningfully give people the power to say nominate board members without it because you know Without losing control. So there's a lot of interesting questions. I'll just leave it at that So so I think you know what one of the things that I'll say oh by the way I just got this secret note that says if you have a blue Tesla plate number No, I'm supposed to repeat the questions that we asked before The audience But I don't remember what the questions were so who here is the ones about who's an entrepreneur is that what I'm supposed to be doing I Guess there's a live-cast audience who wants to participate in answering the questions or It may be if people in the crowd. Sorry. Oh You mean when we get to ask the audience Got you so the blue Tesla thing was just a joke All right, never mind Thank you Right so so one of the things Is you know, we are kind of you could there's a scenario where there's two paths, right? There's one that's really well understood You could just get on 280 in the case of the Bay Area drive down Sand Hill Road And there's one venture capital office lined up after the next And so if you go down that path, it's well understood It doesn't mean that everything fits into that model, but it's well understood if you go down the other path you need to get like a compass and a machete and You know a little headlamp and whack the crap out of some things until you figure out You know what really is working and who's responding to your your pitch and your ideas and I think that From my perspective as an entrepreneur You do that all the time anyway You know you do that with respect to who your audience is how your product matches Who potential partners are and all those sorts of things? And so in this model, we're just saying hey, we're really early in the collaborative economy. Let's Let's experiment. We're experimenting with ideas for the basis of these models and businesses like Danielle's got this really cool machine sitting there that You know, it's pretty sophisticated and it's it's unassuming, but it's really a sophisticated machine You know that's kind of a surprise and that's a very powerful offer, but So we tend to be very focused on what's the core offering of the business and less focused on How we're funding and who's are on our board and who's going to benefit from this and how is the distribution work and You know the the things of really kind of What I'll call the ethos of the business so, you know, I Think that for us Especially and I guess I'll represent Dan Rosen who's sorry. He couldn't be here. He's the co-founder of solar mosaic Which is a crowdfunding Platform to for clean energy So they Basically offer clean energy projects and people like you and I give loans so it's prosper for clean energy and Basically, they funded initially with grants from the those the Sunshot and sort similar grants from the government as well. So a crowdfunding Allah Daniels example And they also won a million dollars from a Verizon competition And so you'll you'll also see that many corporations, especially now are sticking a toe in the water by trying to kind of find People and partners to do interesting things with a lot of big corporations are taking the point of view that Innovation is going to happen outside the walls of their company and that the most innovative thing that they can do is open up as a platform and invite third-party companies to You know pitch them on cool ideas So to that end solar mosaic won a big award, which is great They also did ultimately take venture capital money, but they took it from well-humored People who are deep in solar and so they feel that you know, they're gonna they're gonna have patient capital So I offer that as background and just suggest that Because I'd love to have this. I'm hoping that we disagree with each other during the course of the conversation But I think we I'd love for us to take questions so that we can get some feedback from you guys I mean, you know get into a conversation rather than us, you know Tell stories So does anyone have any straightaway questions? Really? You guys are so quiet. Can I tell a story real quick? Yeah. Yeah, so this morning It's late coming because I had a meeting with a potential investor And so one of the things I make you do are these awful slide decks and then one of the slides has to be you know Why we win or how are we different than competitive landscape? Most entrepreneurs will say oh, we don't have any competition, right? There's no one doing what we do and he's a little more savvy than that and he said well, okay You guys were e-commerce. So are you like Shopify and I said well We'll know because here's the things that we do and he said well, okay there's a comparison he seems kind of You guys are both e-commerce like take me further and he's throwing out different e-commerce names Machento or evolution and what's the difference and finally I said well, you know We're a community commerce platform and he said well wait a second. What I said. Yeah People use our platform because they can talk to each other on it. They can use Social shopping at its leanest meaning I bought this maybe you want to buy it as well You can create notices you can interact on the e-commerce site while you're engaging in this Already group or team dynamic and he was just so fascinated by that and it felt like the right tone for walking in here today Because it seemed like he had seen so many other e-commerce platforms and kind of been there or done that But when I brought up the community aspect of it The ability to really connect to be social when you're engaging on a shared interest level that for him was something That really stood out and I think that's kind of the new new out there that needs to happen in more ways On more types of platforms because as Lisa said things have already been invented and we're we're sort of a piggybacking on what's out there So how can we do it differently and how can we do it in the context of more of a sharing economy and more of a communication economy? And then I think that's a great example it it also So keep following the thread and putting you on the spot If you if you imagine that you have a community commerce platform Do you does that shape the way that you think about? Capital how you would raise capital and also who would be an equity shareholder in the company. Yeah, absolutely. I mean So there's sort of two schools of thought some people say they're smart money and some people say all money is smart So you just have to decide for yourself Do you feel like you need to be with people are gonna help guide you or do you feel like if you have the funding that you'll Be able to pursue the trajectory that you see yourself in but either way I mean, I think you always want to have someone who shares your philosophy and your vision Who understands that you're gonna put money towards certain projects or certain product development that maybe They wouldn't have seen five ten years ago because it wasn't important to them So I think it's always important but at the very basic level, you know You should like you work with right and these people are going to become your you know Pretty much your spouse for a while. I mean they're gonna be in your face And so you really do need to enjoy them see eye-to-eye and have a good working relationship Totally agree and done y'all do you've come to things? I'm really interested because I keep staring at that cool machine How did the how did the? Fact that you crowdfunded the the mill really Did it shape the project and the product in a different way? Did it move you in a different direction or did you have is it? You know the whole thing was conceived and you simply use their money to execute So actually this is a completely different machine than the one that we developed for DARPA So DARPA had a very specific thing that they wanted which was much more forward-looking Then then we thought that the market would would respond to so what we thought was like okay We have all this technology We basically we have this awesome prototype and we've we've thought a lot about what is it that we want to accomplish But we think that this other machine is too soon So what we're going to do is we're going to see how many Machines that we can sell to people who want to make custom circuit boards So essentially given the constraint of how many machines can you sell in a month? We built a prototype of something that was just designed I mean it the tagline for Kickstarter was custom circuits on your desktop Knowing that that market's actually really small. It's probably only maybe like a hundred million dollars or something Can you give us an example like for me? What don't really know that industry? Yeah, like what kind of product would that? Be interesting for So there's a lot of people who are designing wearables Yeah, essentially so any kind of just device that has sensor has a circuit or sensors in it And maybe has an enclosure like made out of plastic or aluminum or something people can use this machine to make that So given that we didn't have any money in the bank and we only had a month we Went in a really narrow direction Just like okay if we can tell the story to these people and get them get the message out there and get good response We know that we can tell the story to other people and now that we you know So in that way it totally changed what we wanted to do because I wanted to go and make a machine that Basically would be the first computer-controlled machine for the craft market, which is where we are going now Now that we have some traction and and we can think a little bit more broadly But in the beginning I was like not gonna go into Michaels and say here's a CNC machine to cut Jewelry or whatever because that's just too far out So I think that not having a lot of money in the beginning and having to do something like crowdfunding makes you take little steps And ultimately, you know, it's like growing a tree slowly. It's stronger Then if you have to grow really fast and make like big decisions without a lot of data It's also I mean I I've been early and I've been on time or a little a little early It's a lot more fun to to be a little earlier on time And I don't know how many of you in the room have but I'll ask you know Have people have you felt that you've launched a project that was just too far ahead? Anyone besides me You know, so what happens is is you run out of either? enthusiasm Ideas or typically you run out of capital And the witness protection program as it turns out isn't what it's cracked up to be so So the idea of basically bootstrapping something and building You know just ahead of what your customers actually want. I think is just a really It's it's kind of the salt of the earth approach, right and puts you in a very sensible way So carry on so then you you now because my memory is you had this crazy positive campaign, right? I mean you said what was your what was your goal for Kickstarter? We wanted to sell 50 machines in a month, but we sold 205 machines in a month, which was really good for us And it basically just said okay to anybody who was a perspective and like investor Here's a team. We don't know anything about them But they executed really well on something that was difficult and sold $1,500 machines that don't exist yet. And so they must be good at Telling the story at least yeah But yeah, you built the things yeah, no, and then actually we built the things and so it was like I think also making promises and fulfilling Promises in a like a manageable way also gave us credibility and that's what allowed us to go from government to Kickstarter to Venture funding. Yeah, and I really think of you know, I think of it as As like the difference between VC or crowdfunding is really how much risk can any one person take? And so, you know, we have these laws from like the government that say, you know You have to make over this amount of money or have this amount of money in the bank before you can make an investment Yeah excise and it's a really it's really about protecting the investor You know like saying okay Well, you can take this much risk if you're just a normal person You can take $1,500 worth of risk on an other mill that may never exist Like there that is the amount of risk that you can take on Kickstarter Yeah, and I don't know where that limit is like for sort of the average person, but I think that's one of the issues is like whether it's someone's risking time or Reputation or money I think that being able to break risk down into Quantities that we can measure and say like okay, this is this isn't the amount of risk That's sensible for you at your state in life or yeah amount of capital I think is really important well And what's on the other side of risk is trust right that I mean I think each of you talked And I'm sure that you all have your own Lens on this but a lot of what you know has happened in the last five or six years with respect to these businesses And in general in the tech industry with startups is this whole idea of you know How do you know who's there? Who do you trust for what? What are you building trust on the basis of what are they trusted for? People's reputations become you know become their primary currency And so I think that you know risk is like you said it's it's kind of It's a step function, right The my way of talking about it is you know as an entrepreneur you look at define refine and then scale That you you know define a project iterate and refine it and and then move into a moment in which you scale one question I have potentially for you for you guys at some moment, but certainly Amongst the three of you is you know should collaborative economy companies Especially those that are considering Alternative sources of funding should they scale you know like Does it make sense to have a lot of local players that come together as a sort of an affiliation? Whether that's a places to stay or transportation or food services Or do we you know just fund a company and and allow that company to have a global brand in sort of the old school last century way? Do you do you all have an opinion about that I have an opinion please We talked I mean we talked about this the other day is like yeah If you're if you're growing a company, there's or if you're starting a company There's this expectation that you will grow, but I think that you have to decide What to own and how big to get and I think that there's Kind of this this pattern where a company with a good idea like explodes and gets really huge and like sort of grabs all of the the space in the market and grabs all of the competitors and either buys them or squashes them and then They're left with this big pile of cash That they must then redistribute to places that they you know whether it's philanthropic or now they have a venture fund or something and They're seeding small companies But instead if they had just chosen not to grow in the same fashion and let those small seedlings Grow up and be competitors or whatever it would be much more robust of an ecosystem for one and There's always losses like anytime you grab the money and then have to decide how to spend it You're losing a percent every time that you do that and so in my opinion decide what to own decide what kind of company you're going to be and Do that from a scope perspective not necessarily a money perspective and then let the rest go Because you don't need all that What's funny because the mod the mentality from last century was you know get big and Integrate and kill competition and barriers to entry and all that kind of like rough and tough military language I Was just reading this piece about the Utility companies essentially and the way that electricity happened in the United States and the short version is that you know Edison actually really wanted a lot of competition He felt that competition was going to make the whole environment so much better like Innovation would thrive if you have competition if you don't have competition it doesn't And then it turned out that His kind of chief of staff Took a different point of view went to Chicago and negotiated deals with regulators so that he would be protected if he built out a bunch of distribution and That monopoly really still is in place today So you know we have and there's a lot of different examples But you see where there's a lot of regulation and a lot of protection. There's also very little innovation and a related story When I was in Brazil recently and had a chat with the person who's the Minister of Culture and Education Brazil as a country about six years ago took the point of view that they were going to Bias and and embrace open source across the board So I asked, you know, why are you doing that and the answer that came back was well You know, we're moving from a developing country. We're coming from behind What we want to do is actually Enable and throw gas on the fire of innovation We're very interested in generating as much value creation as possible We're not very worried about value capture because we think that that will happen in time And so what we want to do is reduce the friction to To innovate we want collaboration. We want massive co-creation We want people to kind of go to the gym and build their muscles learning how to work and think together And we want them to open source big ideas so that Innovation can spread really rapidly And my observation is actually and probably yours as well Brazil is a pretty impressive place as a country and it's changed dramatically economically education Technology startups and lots of different Industries and a lot of different metrics you could see The kind of growth that's taking place there and and I think a big part of it is a function of this idea that you know We ideas are free. We want to we want to work together. We want innovation and creativity to flourish So what do you guys I want somebody to argue with me? You guys aren't going to argue. Are you? I'm not gonna argue I think there's a balance to be had right for I mean Competition also drives innovation, right? And so I've always wondered why Why the phrase has been the share economy because what you're talking about it doesn't really lend itself to economics or debate to economic principles Right, it's a whole different way of looking at it And I sort of wonder why that came to be the phrase for how we describe so many of these businesses But we're talking about Smaller groups that do a lot of the same thing. We're talking about open source information We're talking about collaboration. We're not talking about You know the open capital markets finding out what makes the most sense. Yeah, so I just I wonder I mean you've been here from the from sort of the beginning of this Innovations or why why do you get started to be known as the share economy? Well, actually, there's a lot of controversy about the the name People everybody, you know, not everybody but there I think everybody probably who's in this room knows that the Collaborative economy the pure economy the invisible economy the sharing economy it goes by a lot of different names and I think Part of the reason is that I the sharing economy for me. I used it initially and whenever that was 2008 Because I was seeing a shift from ownership towards this this idea that assets would be shared and my I was trying to lead the witness Unsuccessfully I might add as an entrepreneur that that instead of venture capitalists funding You know our four businesses and we do really different things But but four of the platforms that we build and spend a lot of our money on are actually at the core very similar Let's say so there's no incentive for us to share that technology Each of us goes off with our own teams and rebuilds the same technology So inventory management and community management and outward-facing messaging and Back-end e-commerce Cartman, you know, all of these things are tend to get built over and over so my view was you know, if we could actually acknowledge that and make a commons of Here's a collection of technologies tools assets That we want to actually as a community share and then we each become members of something My thing at the time was the instigator collective and so the idea was you know Let's join something so that we can all kind of use these tools. We could dress them up how we want to So I was looking at how can we amplify the this aspect of sharing that lowers the cost of experimentation and innovation increases the velocity of kind of Refinement and adoption and would accelerate the maturation of the life cycle of moving from the old economy to whatever this is And so that was why I was using sharing. I think that Because the a lot of the businesses a you know If you weren't here this morning, you know, there's about five billion dollars in venture capital that's gone into these companies so far five of the companies have two billion dollars of that So You know, my concern was like, okay, the the model is such that It's very much moving to towards, you know, this old form of distribution There was a lot of heat that that has come on to the phrase the sharing economy in the last year Especially because people were saying like hey, you know BS. That's not sharing You're charging me and by the way, if it's a ten billion dollar or three billion dollar, you know Pre-money valuation on this company. Where's the sharing? Which I agree with I mean that's part of why we're having this conversation So so I think the notion of sharing economy and the language itself Frankly is something that's come under debate. I'm I'm a lexicon agnostic in that I don't really feel personally attached to anything Except for the outcome, you know, I don't really care in a way what we call it My my expectation is that it hopefully in a few years it will just as the phrase goes be called the economy Actually always preferred the mash the mash me too, but you know because I felt like that really highlighted That's something that Lisa have been working on for a few years now So it was highlighted the opportunity to fill in each other's sort of the holes that you're having the gaps that you were experiencing Is that I guess as somebody who's built, you know back-end e-commerce carts I think there's actually a value in building and rebuilding rebuilding because everybody sees it differently and you build it differently and Through through that exploration you have refinement and maybe you come up with a much better process Even though it looked like exactly the same thing as somebody else was doing, but I love the idea of API integrations and how do we plug in what somebody else is doing to build something even bigger than what we can do on our own? So funny. I never thought until you guys were talking about what exactly I like My thoughts about the sharing economy and what that meant because I think of it in a totally different way I see it as we are sharing either risk like sharing risk a bunch You know just like lift drivers, right? They're all sharing their own cars, right? But to be part of this thing that exists that none of them would really do on their own But it's also sharing in demand like I as one person out there could you know make a website and Go drive people around but I don't because I can't get that same amount of demand And so if we pull together and we share our resources we share our risk We also share in the demand and so we're taking a portion of that, but I guess I guess sharing in general is is much more like Giving this isn't a giving economy. Well, that was why I mean so so yeah, that's why it came under a lot of heat that word I mean I used it myself to I Mean selfishly When I was writing the mesh for me. I said, you know to myself I wouldn't have confessed this publicly at the time You know that I consider myself a successful entrepreneur and a failed environmentalist and so the idea of basically aggregating demand and supply and yield management Doing yield management on what we have as a planet was in really interesting way to to Make us have less negative impact, right? So So that was my entry into the conversation actually And so yeah, it is an aggregation of supply and demand But I mean going back to you know, I'm just curious like does has everybody Well, let me ask a question. Who here has participated in as a driver host or chef or on the other side in a sleeper Drive a sleeper passenger or eater or in some of these services as everybody Tried something So and and of those people How have you done it once and never again or who has who has repeatedly? Once once using the service, okay? After using the services that have been sort of these shared things Who prefers and you know, I'll close my eyes Who prefers sort of the old-school piece so you know taxis or is is there I'm just curious because I we you know, we've had a lot of these conversations of risk and trust trust and transparency and convenience And I think that that's one of the things that's built into this this this whole platform But from the product design and if you guys are looking at you know participating as entrepreneurs and figuring out How do you're gonna how you're gonna get investment? for Things that you think are not Necessarily aimed at venture capitalists or things that you actually Don't want a venture capitalist model for You know, this is the You know, I would appreciate if you guys could sort of sum up I have my own opinion But sum up like what your suggestion is in terms of how people approach this Is my question clear? Yeah, but Specifically with regard to companies like No, no, I mean I'm saying like so let's say that because I'll pick on Matthew Because I know you and You're chatty Can you can you just sort of say as Little or as much as you want about what you're doing and and where you see the opportunity and the challenge Okay, I know we'll just have a guest chair Okay, so you can be like in the hot seat. I don't know what that is. Just Hello, hello, okay, okay So this is Matthew What's company saying? Working title is collaborative advantage Which actually came out of Lisa's mesh conference last year For me at the mesh conference. I was Confronted by which was essentially this a year ago. That's how I'll frame that. Okay. I was confronted by the fact that It seemed that there was a risk that the mainstream world would misunderstand what the sharing economy was and could be and So but you're creating a business that you feel because from what you just gathering this is we're learning this real time Yeah, but what I was looking for is could you sort of you're in the process of creating a venture that you believe Doesn't won't fit with the typical. That's right So basically what we're working on is we are trying to develop Protocols and applications that shift the structure of the internet itself in ways that push power towards individuals, right? This is not a single application. It's not a single service This is the underlying data structures the publication and subscription protocols that operate in ways where Real simple example We're trying to create a world where when I look up something I pull down the attributes that I care about from the sources I trust filtered the way I want them filtered presented the way I want them presented and the mechanism that we're trying to create is That I can pull from resources across the internet any data that I have access to and I subscribe to Let's say Janelle to tell tell me when I'm looking at stuff about tea corporations She's a synthesizer and she's pulling down and directing towards resources that she finds trustworthy and Kind of culling from those and presenting in the way in a specific way and Lisa's may be putting a presentation framing around that And I'm I'm just describing to Lisa. I don't know anything about tea corpse But when I look up that I'm able to see all of that information Filtered and distilled down through the sources that I trust so that when I look up something I get The information that's relevant to me that I find reliable and that's readable for me The vision is that with that I'm able to see six layers ten layers deep into supply chains and Can take action right now I can go do I want to choose a or be doing these blue jeans or those blue jeans these ones pollute the river and Use slavery these ones, you know have air pollution, but it's less I could do either of those or neither, you know and the goal basically as your as you were discussing earlier is How do you put power into people's hands so that they are able to make decisions in line with their own values? If you don't have the capacity if you don't have the capability if you don't have that information at your fingertips You cannot make a decision that is an informed decision And so we're trying to build the infrastructures that enable that so so you're at the root cause So clearly you don't want to take where you take money from has a lot of impact into whether how deeply you can carry out this mission That's right. And so, you know, what do you see as your options? well Open source is one right the internet wouldn't be what it is today if HTML and HTTP were something that you had to pay for Right, and so we're kind we're trying to was that correct. Thank you. Thank you, Kalea and If you have if you are developing protocols or developing standards You're not likely to be able to monetize that Or if you do try to monetize well just in sticking with this theme So, let me just kind of do more Honing in yeah, is this a thing that you have to raise money for or are you putting together kind of a band of pranksters? around the world who are going to do this as a volunteer effort or how like from a from the standpoint of The theme of the conversation building alternative investment approaches You know what how does this fit? What what do you what do you? You know do you need capital and if so, how are you going to get it? I think you do need capital because yes We have the band of pranksters But those people are having to subsidize their work here on this stuff right with other work elsewhere And that limits the amount of bandwidth and time that they can put in and there there are a number of people This is an ecosystem of people working on this stuff. I'm not the center sure, right? I'm a node and a bit of a connector but I Do think that you need to build some business model or business models around portions of this Okay, accelerate the development of it And that you do need to go and get access to capital whether it's grant money or your crowdfunding or and it doesn't seem to me That venture capital would be an appropriate source for much of this stuff But I mean things it can be I mean let me put a model out So I mean how many people here have heard of Mozilla corporation and Firefox Okay, I mean that you know, there's a essentially a model that has You know, it's a it's a non-profit that owns a for profit. It's not unique in that respect there But at the same time, you know, they've worked over more than 10 years trying to keep You know the internet operating which is your point at a certain level so that the Sharing especially if we're building technology on top of the internet to the extent that it remains open That's a possibility, but to the extent that it becomes like this net neutrality and other issues I get that but that's not the topic of our conversation here the topic for so for us the question is You know, they could So how many people here for example are building whatever you're building are you building it on top of the web? Whereas it so who needs technology and web-based technology to execute Okay, and who's doing a startup where that is not a necessity Okay. All right great. Thanks. So it's definitely the majority of people see the web as an essential thing I think the idea again, I'll just put out the Comments that part of what's missing at least for me from the collaborative economy is this notion of The commons as a verb not just as a cute thing to say once in a while in a presentation But what are the essential components that need to go into our collective commons that we you know agree on How we're funding it how we're supporting it what the rules of engagement are and I think that Is that my dad But you know, I'm just saying like with that that's an essential piece of what we're trying to do here And we might as well highlight that In the case of just looking at ways in which we are gonna You know Open up to opportunities around funding like Danielle you're looking at in the future VC funding into Several rounds of funding or you've raised money and that's kind of it and what how do you see it playing out? Well, it really depends on how many machines we sell So if we sell a lot of machines on the money that we've already raised we won't need anymore Got it, but you know, there's people ask me about the possible exits and what I'd really love is to Kind of go back to the beginning like maybe IPO Maybe buy back all the rest of the shares slowly, you know using using our cash And then be a private company private employee-owned company again or whatever That's a very long ways away. It is and basically our success is determined by what are our margins and how many machines we sell and You know, do we think that there is a case for Expansion will we do better if we raise more money and get bigger? Yeah, so it's still the walk before you run like, you know, like you said before you have to Make stuff make promises deliver bill trust Expand right and and I think in in everybody's case who's up here And I'm sure everybody in in your seats there a realizes that in B is in the process of doing that And and that is in fact, you know, one of the best ways to build trust Do you guys is there anybody who has a question for somebody up here around? Oh Good Jump down in because we're trying to thanks Matthew Sorry, we're gonna give you you know, can you give her that so we're trying to record the questions? I think Thank you. Thanks, Matthew Hi, I'm Jennifer and I have a question In regards to venture capital we've been talking about that in very broad terms, but I'm just curious if There are any observations or experiences between traditional venture capital and what We would call more impact investing and Funds that are focusing more on social enterprise and trying to make the world a better place And if there's been any any experiences that you could comment on Well, I don't think that VC and making the world a better place are Mutually exclusive. Yeah, I think that The the deal is that at least for us Any VC that I am engaged with there's a bunch of sort of limited partners that I don't know I interface with one person and they have an agenda and whether it's like, you know They're very pro school or they're very pro hardware or very Manufacturing they have their own agenda and it's really just about you know, all of them No matter if it's trying to help everyone, you know, help help schools or whatever it is With their VC. It's still there's still this expectation of we got to get our money back We got to get our money back and like, you know, four to seven years or something like that And so I think it's not it's not necessarily has anything to do with what their mission is But there's this expectation on a return, which is the thing that governs your future in a way It's like, okay Well, I'm gonna need my money to like she asked like do we raise more rounds of funding later? Well if My VCs are putting pressure on like hey, it's been it's been a while. We need our money back Why don't you raise another round of funding if that's not the best for our company? We may not have a choice. I Would say I Was just gonna say that I think that just to be clear VCs are in my experience personally are extremely transparent. So it's very clear what they want Which is the return there? There are different flavors of VCs There are people who are you know more patient capital there a lot of times the funds are 10-year funds and When you know, it's very relevant where they are in the lifecycle of the fund to where when they invest in your company So if you're in if they're in your six or seven of the fund and they invest with you, you know In year eight or nine, they're gonna be out selling their next fund And they want to see really good They want to have good stories and good returns by that time because that's what allows them to sell out You know the sexiest two words and show business, right sold out It's true for VCs raising funds as well as it is for you know, Danielle selling machines and Janelle selling, you know her various kits. I think that So the bottom line from from my perspective is it's it's a dating process you there's a lot of capital out there There's a lot of flavors of capital and there are Investors that are very keen on like themes around Commerce or or neighborhoods or manufacturing There are there are VCs that actually want to invest in first-time entrepreneurs That want to have social impact that there is also, you know foundations that are doing some Investment as well. So there there's a lot of different options And I think it's more than anything. It's a challenge and the onus is on us as an entrepreneur of You know, basically having more than one option and then choosing, you know, who feels Who feels best at and also asking the right questions, you know, what? Understanding fully what they really want out of the out of the investment and what the time frame is Yeah, you were gonna say Something that we've started to do just to add another layer as you go down that path Look at the other portfolio companies for that particular investor And I think that's a really nice way to be able to determine where you fit in because it really is they do live for Sort of a larger ecosystem One of the really nice things about Google Ventures is that once you're a Google Venture company you're within that Larger community and they really have a lot of interaction. So, you know, to the extent that this is a generalization All investors are looking for quick return. I think you can really tell a lot about An investor based on what other companies are involved with you get a real idea of kind of what their Priorities are and maybe some what the exit strategies have been and where you fit into that overall game plan I also just wanted to say with respect to that whole venture capital thing a Comment that was made in an earlier session Which is completely my experiences if any of you ever heard or read the Google IPO documents the S1s You know, the founders were very clear about what they wanted and didn't want and if you recall You may not that it was actually put out to A public market in a different way it didn't go through the normal retail channels They they really tried to do something different I think that one of the opportunities for all of us is to create such a compelling opportunity opportunity platform brand community product that That there's something so sexy that you can actually dictate the terms that may be unique to you Or your company or your mission or your community And what you'll discover is that the investors will engage with you because you have momentum You you are walking the talk and you you know a friend of mine is this guy Blake who started at the company Tom's shoes Very crazy idea. It's working. They just launched coffee You know, it's it's a it's a very crazy idea and he's got a lot of people chasing him because Whereas, you know, seven years ago people thought that he was insane So so I think that the the the sort of the the most compelling thing that you can do is Make something really work and then kind of the world is your oyster, right? You can you can dictate your terms? I was cutting you up and then this woman holding your hand extremely straight. Yeah, we'll remember you Wait, did you want me to talk to her? I don't know. Okay. I wasn't sure if you were looking at me or not I did want to say one thing which is that I just in the limited conversations. I've had with investors even people who are social investors I feel like a lot of them are unwilling to invest in something where there's a capped return or fixed return or where where the Involvement in decision-making is pretty curtailed but for a social enterprise to truly pursue its mission without this Constant voice in its head asking it to earn lots of money for it It's always going to be a battle and it's always going to potentially undermine a mission And so I really encourage especially my clients when they're taking any form of investment It's to make sure that the return is capped and really set boundaries around that investor's ability to take part in Decisions, but investors like there's just not a culture like there. I haven't heard VCs be willing. Well, it's a different it's a different So the short version in my experience is Venture capitalist funds are come from people who are limited partners Who actually want, you know risky returns? So it fits an area of the portfolio that says, you know, what what in the oil business is wildcatting, you know Like a bunch of stuff isn't going to work but when you hit it yee-ha, right and that is the the venture model and and it's you know much more explicit They need to invest certain amount of money to have to justify a board seat to have 20% of the company Blah blah blah the bottom line is that All of those conditions become negotiable if you have something that's irresistible You might have something that's irresistible broadly, but you don't need that, you know You don't need to have 400 investors. You probably just need to have one or two And so the the whole idea of actually getting clarity around what you want and what you need And it will help you hone Who you want to talk to and what your conditions are and I think that you know Kevin is here. I can see you Who's an investor and has Corraled a group of thousands of impact investors over the last 10 or so years and I think that You know the the bottom line is that there's there's there are as many investors as there are Entrepreneurs in terms of flavors and if you if you what you say is Compelling to someone you might be surprised at the degree to which they're willing to work with you if you have a big fund where there's not so many degrees of freedom and there's a lot of limited partners and there's a lot of You know certain structured Expectations it becomes much more difficult So and I think there's great examples like for example Lyft which started off a Zim ride Got some funding couldn't get funding Realized the business model wasn't working Did a massive pivot and relaunched his Lyft and has raised over 300 million dollars is it is is an absurdly ridiculous example Not I'm not again trying to amplify the things that raise the most money But more I'm making a comment about the two founders and their capacity to Continue to be relentlessly focused and they're still focused on their original vision They simply pivoted to actually accommodate what the market was demanding rather than what they were trying to provoke so The yes the woman who's patient with the yes I I have two questions related to the co-op T corporation So is the T corporation is that like closer to a C corporation or nonprofit? I could ultimately go public. That's my first question. You know, could it do a public or DPO type of a thing? Okay. Well, so in answer to that so T corporation it refers to a section of the internal revenue code in the same way that C Corporation is subsection C and S corporation is subsection S but the benefit of being a T corporation is that you You don't get doubly taxed So the corporation doesn't pay taxes if it distributes or allocates its earnings to its members on the basis of their patronage but one of the the keys to being a T corporation is that the That the earnings have to be distributed on the basis of patronage and not on the basis of people's capital contributions So that really that's kind of the opposite of going public and seeking Capital and so yeah, okay, so that's not that's not a possibility There's no eggs that kind of an exit for a T corporation Yeah, I mean there have been T corporations where the members have seen it to be in their benefit to sell it because they've been so Successful so there was a farmers cooperative in North Dakota. I guess it's Dakota growers It was big pasta making cooperative and then there is good vibrations The worker and cooperative here in the Bay Area They both sold out to larger companies because in that case the members saw this potential to get a big return in that moment But as a general will hopefully co-ops won't do that because in the same way that they have to distribute their earnings based on patronage They need to distribute the proceeds of like a sale On the basis of patronage which often requires them to distribute some to past members on the basis of the past members Contribution to overall patronage. So can I ask why so my question second question is related to Raising money potentially for a co-op. So I understand like once you have an infrastructure And you know once possibly you have people put money in who are members, right? Is there usually typical possibility of raising money from outside of? a Co-op members is that typical? It's not typical But it's possible and what you have to do is limit the investor's return since the law really says the proceeds have to be Distributed on the basis of patronage if you bring in if you get some you could call them preferred shares You could pay a reasonable return like three to five percent every year on those those shares But you can't give them a share of the profits based on how much you're earning So equal exchange which made that chocolate that I passed around earlier. They have preferred shareholders who invested Significant amount of money and now they're getting I think five percent every year They don't get to take part in the votes or they don't get any more than one vote But but I think it's been pretty good for them. Okay. Thank you for that clarification. Sure Yes woman in front hi my name is Lily and Janelle I really have a question for you. You said something earlier about When wealth flows it grows and We've been talking about kind of the ecosystem of I'm not sure exactly what I'd like that to be more defined like what is this ecosystem that keeps on being thrown around and loves that term and To me in the ecosystem what flows is water and In what I do it started in the water birthing movement and water birth actually refers to the emotional fluidity of the woman giving birth and Being completely open and completely like melted in her emotional icebergs and able to open In order to allow the cervix to open and give birth gracefully and in power so This is my line of work in what we teach and people that we are working with resonate deeply with this flow and the spiral of movement and We have no translation for how to work with money Well, I really love using water as a metaphor when I talk about money because really money is not a thing of inherent value It only has value because people want to take it from you and it flows from one person to another So if there was only one dollar in this room We could make it into a hundred dollars if we just exchange over and over again So it's really money is kind of it's a system to incentivize flow of services flow of goods people providing for each other and so even if the The 80% of society is only working with a small amount of wealth to begin with if we can just keep circulating and circulating That wealth it will just grow regardless of what other wealth has accumulated and the other sectors of society So my question really is how do I implement that in a working viable business model? Do you want to I would just say this is probably going going to go deep enough into a conversation that You guys don't you think this is like I'm always happy to talk about flow and yeah so I mean you might want to connect with Janelle separately because this sustainable economies law centers is I Think you've amplified the concept and actually built some tools and things beyond just consultation that are quite good for Kind of explicating some of the core aspects of the the ideas that you're heading in the direction of That if we if we take the time to answer now, I think we're going to go Into pretty technical conversation But maybe I will say one thing you know how in California The rivers are all danned up into these concrete culverts that just send the water straight down They don't get the flow here or flow there or create wetlands or anything like that That's kind of like our economy It's all set up to make money just flow in one direction in one direction only and and there's so many ways to create new Currencies new types of organizations that incentivize flow in different directions And I think that is a lot of what we're talking about So a quick question to all of you here is how many people who are here and and Quietly or not so quietly creating a ventures Are thinking about the cooperative model as a potential structure? anyone Okay, and and then how many of you are thinking about Grants or Winning the lottery or walking up and down 101 with the sandwich board like some other model, but not venture capital okay So I'm curious of the people who are thinking about Cooperatives is anybody willing to share our sort of the general idea of the business just so we get a sense of of how it fits Because I think that one of the things that happens For example is a lot of like so, you know, it would be hard for me It's hard to imagine like other machine as a cooperative But I hear for your company I think part part of it depends on what is it that you're doing and what are like the upfront capital costs and yeah The structure you got to put in place for hardware development. We need a manufacturing cell So there's a lot of stuff that has to happen on dollars before anything It's made and so I think for that it would have to be like a very very large cooperative That was kind of hands-off in a way Sort of participating in like I like the fact that this is happening But not not much like not like a food cooperative or could be the manufacturer's cooperative worker co-op Yeah, yeah, maybe the people I mean the other thing with cooperatives is that It's when you're competing with a VC funded company if you do a face-off in time You know the VC funded company has a lot more capital and can execute much faster than then a Cooperative in general from a capital perspective unless I You know the ones that I'm familiar with I would say that's the situation and so part of it also is When you're in a very competitive industry It's hard to imagine and and also when the life cycle of the industry isn't mature yet It's hard to imagine how a co-op could could actually compete Can I also offer I think maybe it might be even broader sense of the word co-op We're using in very traditional sense employee-owned very economic based. I think for our company We see it in kind of three different ways one is is there is a readily accessible to people who want to use it Are we giving communities exactly what they want and are we helping and relying on the help of other entrepreneurs? To further our business and further theirs I think those are all elements of a cooperative that aren't based in Mutual owner or you know multiple ownership of a single business which may not let itself well to every business structure And so if for me the sherry economy where the mesh is very much about Helping one another integrating into one another and making that accessible the fruits of those labor is accessible to others Yeah, you mentioned earlier that other machine companies started as a part of other lab So other lab is actually probably a lot like a co-op in a way So it is a place that exists a building in the mission which has industrial manufacturing tools and so by paying a rent essentially in this building We got access to things and we didn't have to pay for large-scale, you know Manufacturing equipment access right access. It was access. Yeah, so I think in that way. Maybe we did begin a little bit like a co-op But when it became clear that we needed to raise money essentially larger money to do things on our own We couldn't stay that way that way. Yeah, and this reminds me. I don't know if you all know Kevin Jones But Kevin, you know, I have a question for you. I don't know if the microphone's around But which is you know, you have the hub Which is a co-working space. I work out of there and a lot of people in around the world work out of a hub You know, have you ever considered a model where You take I know you have hub ventures as well but if you considered a model where like we all own the The hub and some other structure other than this sort of standard co-working model Well, we have raised some money with some expectations by some investors with a different model. So we'd have to Work on that convertible debt to equity, etc We did invest in root capital which invests in co-ops and we tried to invest in equal exchange and we would agree with their limit on return and They and we agreed on what they'd done best Which was this this unique project that increased demand in the city of Cleveland by 30% And that was like a one-off grant But they they you know They did all the things that fair trade USA would do if they were an efficient nonprofit and they they should they increased demand in Cleveland And so we agreed that increasing demand was the best thing they had done and we could fund the growth of demand and they Said yes, but we can't listen to you and since it's your idea You we can't do it and so we weren't able to invest in them even though we were going to accept a 5% return and you know But if we increased demand 30% in 50 cities It would have been a you know much bigger deal than they ever did and they were not able to take that growth because they could Not imagine new and disruptive ways to create demand They could do an efficient product But it's really hard for co-ops to think of something that is potentially new and disruptive business model that doesn't deal with Manufacturing sales because that's what the consensus did we weren't able to we agreed on what forward should be But they couldn't agree that they could go there listening to us Okay That may be too complicated, but we really tried to equal change was a great cop They just couldn't agree that we could be part of what's new So you I mean essentially what you're saying is that it's a two-way street like there are investors that would be keen to invest with a fixed return into a cooperative that has Positive impact, but some it has to be a two-way match that in this case We're doing it for the story and you can't shut us up. That's just part of the deal. Yeah. Yeah, right Okay Anyone else comments questions? Yes In the middle sort of ish Towards the back. Hi, my name is Sarah and I would love to hear How do you think about the cost of doing a crowdfunding campaign and how to make the decision to do it? Yeah, it's It's intense so there's two there's two things that I now realize about it one is It's an amazing way to get a window into what a market could look like or in what Not necessarily market, but just a group of people and it's really the seed of your community Like if you're doing a project or starting a company or whatever and that is really a beautiful thing to have access to you know It's you know and sometimes it's 600 people who are angry with you or six 600 people who are Giving you feedback because they love what you do and that is amazing And I don't even know how to quantify like how valuable that has been to us But it's been very viable on the other hand you're You're starting a company in public like every single decision That we have made as a company every two weeks has been communicated with a group of people It's sometimes embarrassing When you make a mistake because it's very out there And there's no way to turn it off like once you do a crowdfunding campaign and you have made promises There's no going back in my opinion and so it should be taken really seriously It's my opinion actually that People often Underestimate the amount of manpower that you need to do it. I mean to be honest had we not raised more money We would be giving back people's money and in fact because it turned out that it actually cost more than $1,500 to make a machine And that's what we had estimated before we even knew what we were getting into granted our project is pretty complicated but I think that there's there's an expectation of a price of participation in a Kickstarter campaign by an individual and There's what things actually cost and I think that there's a mismatch like things actually cost way more Then when you support them on Kickstarter like for example if I was going to have a Kickstarter campaign where I sold a wallet or something like You know people have the expectation that they can get this wallet for 50 bucks because that's what they would go to the store And buy a thing for but when I'm making it by hand maybe like $200 or something like that. So I think there's like disparity in price there's There's a lot of pressure and there's no way of knowing how much something's gonna cost until you get into it and So you're setting yourself up for a lot of trouble if you don't have a lot of support So yeah, I have a lot of horror stories about Kickstarter, however without Kickstarter, I wouldn't be here and that's So I mean there is a way to make it work, but it's It is a serious decision. I think one of those things that like so the test question is would you do it again? Yeah, okay, so I mean a lot of the people that I have a lot of the companies I've worked with have done, you know Kickstarter Indiegogo some crowdfunding campaign And everybody says the same thing you get like the childbirth answers of like, oh my god If if somebody would have told me, you know But then a year after the kids running around people forget and they they have another kid so it's the same with crowdfunding apparently and and what I The general themes are I think people have universally said it's an enormous amount of work It's a public display of you know, whatever is going on is very conspicuous but it also kicks you in the butt to get going and There's no turning back like once you once you push. Yes, you're you're now it's now happening so one of the companies that Is I didn't think to bring him here, but it's called open ROV and it's a open-source underwater robot and it was a crazy idea and they basically Attach a camera to a little robot and it's a submersive and and they've launched a whole international Community that is a now open explorer calm and it's crazy and it all started from a maker fair and A Kickstarter campaign so I think you know again this these guys are They live and breathe their community and their original Kickstarter community are the people who actually are in the field all over the world putting these submersives into You know lakes and they found like a shipwreck in Lake Tahoe and all over the world taking samples of water testing You know toxins and doing all sorts of things so you know I think and I think it's probably true with my maybe the exception of me who that's my actual mill over there but For most people who are who got these I mean, I'm assuming that you're in touch with them and they've started to build stuff and Yeah, I mean I think of Kickstarter as it's how much would you pay for advertising because it's the best Advertising for a company that has no name And also it's community building so you're gonna create really strong bonds for that and for me it was worth it But it's a serious decision serious I didn't sell any you would know that Yeah, I know nobody was gonna see see after a failed Kickstarter, so it's kind of all or nothing for us. Yeah, yeah, I Call it pre-commerce because you actually sell the thing before you have the thing and really before you even know what the hell it is so It's a leap of faith But you know, it's a leap of faith for being an entrepreneur because Janelle your story isn't that much different You sold something before you built it Ryan you have to Really listen to the feedback of what makes sense for that community And we actually tried to just lower the barrier to entry to make it accessible and you know wave our fees So that communities could use it so that we would get real-time feedback and understand exactly what was relevant for a community or a group of people One comment and then I want each of you to close on something, but It's just that in general I think you'll discover if you haven't already and I suspect you have that things cost more and take longer than you think then Then you thought they would and that's kind of a universal truth So, you know in all these experiments, I think there's no exception Is There anybody else who has a burning question otherwise I'm going to ask these these generous people to To make a quick closing comment So if there was one thing that we were gonna Oh, we do cool. Who is it? Hi? I have a quick burning question great quick So I work with Casey Fenton on a couple of his new projects who's the founder of couch surfing and we're looking at Some interesting ways of creating incentives around participants in the sharing economy Yeah, in the past one of the things that I've worked on doing kind of economics and market design is Revenue sharing so for example participants In the system could take money out for a transaction This is in the context of independent film licensing where we had a subscription fee and we basically took 50% of our subscription revenues and allocated that among Creators to incentivize them to come and participate My question is when you're talking about Co-ops, what are the advantages or disadvantages of actually sharing ownership? With participants in the market versus simply having you know a revenue share something like that where they're incentivized to participate without the element of control Well, you know the cool thing about ownership is that it's not a thing. It's a bundle of rights That's what we learned in law school And so with every company you can just decide what bundle of rights do you want to keep for yourself? And what do you want to share and so for some people? Participate participation in ongoing decision-making or election of the board. Maybe that won't matter at all Maybe the real incentive is being able to earn a little passive income through the investment It could be a wide variety of things that you offer to share with people or To get their feedback and so you could set it up where they own it or you can just make an agreement with them Like you were saying like you provide this money We will share this amount of revenue from you Maybe we'll even get your input on this decision and that decision But you can still maintain the ownership yourself. So I think I think the possibilities are pretty endless Does that answer your question is that bear Who was the person who asked the okay cool, so did that answer your question? Okay great So we're we're gonna do a quick like lightning round Well, you know, what would you want to leave these people with and in terms of? The the topic at hand, you know thinking about building a company investment in exits, right? I think the best thing about way the way we look at the share economy in our company Is to look at investing in people and I think as entrepreneurs whether you are first time or a serial entrepreneur The best thing that you can do is to share your ideas with others and to actually help somebody when they ask for it Because you know whether you're looking for new funding or you've already done it before You don't need to recreate the wheel when these when these same topics keep coming up And so I think I'm as an attorney I also feel there's lots of different structures that you can explore in the share economy and You you'll have to actually go through several iterations if you're out What's right for you s core C core whatever it might be, you know What type of funding you take on it could be debt financing convertible? No, it could be VC funding you're not gonna know right now, and that's okay But if you do want to do something you want to feel like you're moving forward and taking action because that's what all of us Entrepreneurs feel like if we're not moving forward, we feel like we're moving backwards Help each other. That's the best thing that you can do because you're gonna learn so much from one another You might find you don't need to recreate every little piece of it. Oh Yeah, the thing that I would say is You know as more people and more businesses start up and I guess basically across the board and margins kind of Start to get lower, but between different companies The only thing that really matters is the relationship that you have with your customers. So I think that that I Mean I just I still think that's the most important thing So no matter where funding comes from or whatever or how slow you have to grow your company If you make the right decisions and you really develop relationships with your companies At least you've got that at the end of the day no matter how big your company grows Guess my last thought is life is short the ice caps are melting There's a lot of crap happening. So don't compromise anything at this point if you have the opportunity to carry forth your vision or Compromise it by taking funding that you really don't want just don't compromise it And there's so much capital out there. It's just in the silly place called Wall Street But I think you know as we raise people's consciousness about what happens with their money when it goes there More people are going to start taking it out and investing it in a diverse portfolio of local businesses that are actually going to make their future a lot better I would just close by saying I think that one of the main things that's fueling a lot of what's happening and the velocity of it Including conversations like this and the peers event. I mean peers and so cap event of share to begin with Is this culture of generosity and I think that You will find is as I have found and these people have been very generous with us That in general people are very generous about you know what worked and didn't work What I would do again how I would do it differently I like to ask myself the question of if I was starting from today knowing what I now know What would I do? Because I find that a lot of times we continue to do things because we've we're doing them as opposed to Stopping for a minute and say like hang on one second, you know Do I actually want to continue down this path or should I turn this off and start a different project or start? This a different way I Agree that the life is short and yes the ice caps are melting But you know the chance for us to create something together The DIT, you know do it together and do it in a kind of shareable rapid Collaborative way is to me really exciting. I hope that you guys move forward with your ventures and explore new ways to or old ways in some cases to To fund and create really sustainable successful businesses and thanks for your time And these guys will be around for a few minutes, but thanks to each of you for participating really appreciate it Thank you, Lisa