 We're good. Okay Hi everybody and welcome to two years wiser than Alenso experiment the talk that you don't understand. Why is that this conference? We're going to try to delve into the little company that we've been running for two years And I promise you that this talk is not this So we have not paid for this time slot And we are not going to advertise our company to you for the next hour Although that might seem like a variation of what would be possible with this talk. This talk is actually going to be a Story about cooperatives. So in Alenso is a corporate cooperative, which means that in our case It's a workers cooperative everyone who is employed at Alenso is an equal partner in the business We're going to talk about teams generally. So whether you work at a cooperative or not And finding our purpose in life and some like very lofty sort of goals But mostly this talk is going to be disaster porn So we're going to set the stage for various stages of growth Through Nalensos timeline as a business We'll start out with a tale of a thousand lunches, which was how Nalensos started out how we formed the business Act two if we think of this as a play is Trying not to die. So surviving is a business Then we're going to try and have a little fun once we stopped just surviving and we managed to handle our day-to-day and Then this act four is labeled puberty Because of a further theme that's coming up But essentially the growth of the business as though we're a child into adulthood. I know I lost the projector Come back Okay, well this slide what if it comes back Is saying is setting the stage with facts. So we're going to try to set the stage Factually and if you don't believe a lot of what I'm saying, although they are primarily facts You can just suspend disbelief for an hour. Sorry. I don't I don't really have any control over this. I don't think So as we move on this talk is going to be pretty fast So I'm gonna have to go through these slides whether you can see them or not. I apologize So this slide is the cosmic calendar. I don't know if anybody's seen cosmos either the Sort of sad Neil deGrasse Tyson one or the really good one That came out in the 80s, but the cosmic calendar represents all of the time in the universe So we're starting out with like the largest set of facts possible, right? I really like the cosmic calendar because it takes the entirety of time in the universe and condenses it down to Two time spans that you can comprehend as a human being so one is a single year we've all experienced a single year and The other is a single second so humanity on this time scale has lasted for about two seconds And if you've ever been in a car crash or experienced intense pain You know that a single second can last for a very long time from your perspective So if we jump down another notch to humanity So we say 60,000 to 120,000 give or take years of human beings on the planet We're looking at now technology as we've expanded and grown our technological capacity as as a species over time and It seems to be growing exponentially You can look at it another way, which is that we've had dips ups and downs So the dark ages in particular definitely seems like a time that we lost some technology and lost some knowledge So whichever model you choose to think of it definitely feels as though we're in an uptick right now So what this means for? Productions of the human species at the moment is that we have a lot of ingredients So some of these ingredients for example are a civilian accessible global positioning system So it's pretty amazing that we have this we didn't have this 50 years ago And it enables a lot of things and we have global 400 kbps to 100 megabits per second Wireless networks in urban areas, which is much more recent. This is more like the last five to ten years definitely The last ten prior to that we didn't have anything like this And we also have these personal computers in our pocket that are sized barb soap and they can talk to all of these networks Which is pretty amazing So once you have all of these ingredients put together you get crap like uber, which is great So we have all these startups that are emerging and they're super handy, right? But nothing about uber is interesting It's a note.js app that runs somewhere in the cloud and it'll probably be replaced in five years But all that infrastructure behind it is Fascinating and allows us to do some really exciting stuff So the next fact we have an increasingly global economy if you look for at our economy from 1950 to the present It's exploding right you have to deal with the entire globe You're going to suffer it or you're going to enjoy it one way or the other But we are a full planet now and you can't really get around that Global transportation, so it's a similar graph. It's not quite as extreme, but people are moving around a lot I live in Bangalore, which would have been an impossibility for my father or my mother Certainly in the kind of industry that I'm in and global communication So I did have like speeds traveling across the internet Slide before but now I think this is a little better It would have been impossible for this conversation to happen ten years ago Or it would have happened over email and people couldn't see but this is Elon Musk and John Carmack discussing Rockets around SpaceX and Armadillo airspace over Twitter and Everybody kind of like went crazy over this because this is really really neat, right? So this is I'm going to diverge for a second away from facts I dated a girl in university and she took me to church a few times I'm not a church goer myself. I whatever you think of that and she took me to one church sermon that I actually I Really enjoyed and it stuck with me and the pastor was saying that if you go back 1500 years The king was the only person who could talk to everybody, right? He could send a guy out or a lady out on a horse and he could Cross the countryside on the horse and go talk to this person that he needed to talk to and then he could get The message back. He was also the person who could travel, right? He could travel across the countryside on a similar horse or wagon or whatever We are now those kings is what this pastor was telling us He's like you have good food. You have clean water. You have a roof above your head You can talk to anybody in the world and you can get anywhere in the world You are well except maybe North Korea, right? But like the limits that remain are not Physical limits, right? So we're all kings. Everybody in this room is privileged like a king Next fact violence is ending So if you want to take a look at this, there's a lot of interesting statistics And this is probably one of the harder ones to sort of get your head around But definitely violence over time over the existence of humanity as a species on the planet is coming to an end So this is a good book to look into for that Poverty is ending and this one is much easier and thank you Amit for bringing this up earlier It was actually the exact same video that I'm about to show you here, which is Hunts Rosling Hopefully oh, sorry, we need sound 200 years of remarkable progress That huge historical gap between the West and the rest is now closing We have become an entirely new converging world and I see a clear trend into the future with aid trade green Technology and peace. It's fully possible that everyone can make it to the healthy wealthy corner So hunts Rosling you should look him up You should look up gapminder.org because it's really fascinating, right? So this guy basically says to heck with optimism. That's a waste of time. And that's a bunch of useless emotions Gather the facts right take the data and plot them and he plots them in a variety of different ways And then he's created a Java applet that you can plot the data in your own ways So you can plot any amount of data across time or across countries or whatever But this is essentially everybody the world over improving on the poverty scale, right? So if you go outside and you see somebody begging on the street You think to yourself emotionally like oh, no poverty. It's problem. Yes, it's a problem But it's a problem that we're actually solving which is kind of counterintuitive So remember our intuition is almost always wrong gather the data gather the facts and then project them into the future to make Intelligent anticipation of where you're going So if we run the five wise exercise, which is like a boring project manager business analysts like the sort of people That don't come to a conference like this Exercise on any meaningful business, right which is ask why and then when you get the answer to that question You ask why again and then you so forth so forth five times You're always going to wind up at Maslow's hierarchy, right? You're always going to wind up with some purpose purposeful existence for human beings That business is fulfilling something to do with that, right? Otherwise that business probably shouldn't be there. It's just exploiting the market and those do exist But meaningful businesses follow this so I was told by my colleagues that not everyone knows what the Maslow's Hierarchy is there are other hierarchies. There are other people that have had similar thoughts But it's all sort of the same thing physiological needs are like having a roof over your head eating food and then you get to like the fuzzier stuff and then toward The top you get self-actualization or some people even put the tip of this triangle as being Self-transcendence which is to become one with the universe or whatever doesn't really matter We're mostly focused on the physiological level at this stage while we're still solving world peace and world hunger because those are things that We need to resolve so how do we fit in sorry I can't Speaking too fast it has to go this fast because otherwise it's not going to get done listen carefully So we are the automators of these businesses I really do am I speaking too fast for anyone to understand what I'm saying Okay, good because it really does have to go this fast 160 slides so deal with it So we are the automators of these businesses as technologists what we do is we build the infrastructure the technology Underneath the businesses to make them more efficient to make them more interesting To give them color to add data whatever the case may be to make them more effective right and so what that Does in terms of where we are is it puts us right in the center of everybody I don't know if you like older guys or ladies in the audience if you remember the 70s that before this was true, right? So outside of like the chaiwala near my house There aren't a lot of people that don't fit into this graph anymore Software and technology are adjacent to everything else and you can't say that about every other industry right you can't Medicine matters, but it's not adjacent to textiles right those businesses don't smash into each other on a regular basis Whereas if you're software you get to choose who you're partnering with in the business ecosystem Which is pretty exciting and that's actually another privilege that we get so we're already kings and now we get to be Extra privileged as software developers or technologists or hardware people or some combination of the both And I call this the privilege of adjacency. I don't know if it has an actual name You know like people who know that what they're talking about academics The danger of this privilege is the paradox of choice, right? So the paradox of choice is that if you have three kinds of mustard you can choose the mustard But if you have 50 kinds of mustard you can't choose which brand you actually want because there's too many and you're overwhelmed We should be overwhelmed right we can do any kind of software today We can do any kind of hardware or at least we're getting there right as uber shows us So remember this is kind of a theme of the talk. We are privileged So we are in this sort of loop of human needs being met by according to Hans Rosling Statistically speaking data speaking the free market, which is fueled by meaningful businesses which are augmented by technology So we are hopefully a meaningful business and we are hopefully building decent technology, right? So here is as we dive into the story of Nelenso the cooperative Today's incomplete allegories The one we've already touched on is a child growing up So like being born and then growing into puberty as we saw on the first slide there Another is the evolution of a software project. So we're all familiar with how software has its first commit how it grows And the last is the evolution of a species Oh, no, okay. Well, this slide says act one a tale of a thousand lunches. So this is comparatively in these analogous Situations bootstrapping the compiler. It's the first commit to your code base or if you're a human being it's your birth, right? So you come into the world. Oh, no, and the next slide is a video. So this is sad for us, but We'll just okay cool. So we'll we'll just do it with audio. I don't know if anybody remembers Oh cool. So if anybody remembers a Seinfeld episode where George helps Jerry pitch a show about nothing to NBC So we go in NBC we tell them again an idea for a show about enough exactly. They say what's your show about? I say nothing. There you go. I Think you may have something here So that was basically us We decided we were going to form a company and we weren't sure what it was gonna be about Later on when we chose the name and the name didn't come first. It actually reflected this So Nelenso is nil which is like the absence of a value in programming languages And and so is actually word it comes from Zen primarily, but it's Japanese For the void or emptiness or infinity or no thing. So Nelenso is effectively nothing nothing So this is if you are this child this is equivalent to your mother telling you and everyone's mother tells them this a lot that you can be anything you Want to be you can be anything you will grow up and you will take over the world And you'll become a great physician or you'll become a great academic or you'll become an astronaut or whatever Right, but you have to choose something and that's the catch You can't just be a three-year-old boy or girl your entire life and become an 80-year-old man Who's like I can be anything? But I have two years to do it, right So when we started this company and we were in this mode if we can be anything and we went to adigas actually I don't know if anybody knows Vasudev adigas delicious So we would go to adigas near our office Every day for lunch. We were working somewhere else at the time And we were all on the way to being out of work or we were effectively out of work so there were eight of us and we would go to adigas and we'd hold these round table discussions and we would Talk to each other and say like okay What do we want to be and we would start yelling over top of each other? We so we would take a card and we would literally pass it around the table and everyone would get a turn to talk and Then we write down the ideas. It was quite slow And when we started out with was we knew we wanted to build a business so you can kind of like Separate out with set theory What we weren't going to be right so we weren't going to be a non-profit. We weren't going to be some like hippie collective We wanted to be a company. So we had different models that were available to us a partnership We could try a standard equity model. We could do an umbrella thing where everybody was an independent consultant We actually talked about something pretty neat a few people. Whoa, sorry. I think that was actually me a few people discussed Decaying equity or like an equity wedge where when you leave the company you have equity in the company But your equity decays over time so that you can't just hold on to a piece of the company forever like my precious And then the last is a cooperative, which is what we ended up choosing So the definition of a cooperative I already sort of went over about a workers Cooperative is where all the workers all the employees in the cooperative own the business equally and that's important because people were asking me last night Do people who've been around longer have more ownership of the company or people with more like seniority blah No, just it's a lot easier if you just give everyone the same amount of ownership Alternatively, there's such a thing as a consumers cooperative where the customers all own a piece of the business equally. We're not one of those So what ends up coming out of this that people can't really get their head around is that if everyone owns the company nobody does Which is kind of magical thing because you get rid of this Emotional tie-up to the company like me. It's mine. I need this. I own this. I need it to be a success You still want it to be excess success, but differently, right? And the reason that we couldn't do one of those other models is because founders leave Owners who might not be founders, right? They might just people be people who gave you money They can get bored. They can exit people lose focus. So your employees your founders can get bored Businesses can sell out which a lot of people are kind of like gunning for these days is like I want to get rich by turning my business Into something that I don't control That's not winning in my opinion. Think what you want And people die, right? So like the absolute highest level of this is the survival of everyone drops to zero Over a long enough timeline and so remember projection So you're taking the the business that you have today and you're projecting it into the future, right? So these are friends of ours Friends of ours run a small company called ActiveSphere, which is very similar to Nolento in a lot of ways It's like small consultancy. They do more node.js. We do more closure, but whatever doesn't matter And so they have actually encountered this problem, right? So they've had people leave who were founders and now I've asked them for permission to use their logo, by the way So they are looking at other models and we're like, hey, you could use our model because it's not so terrible So cooperatives have these properties, right? They do not decay over time your founders when they leave it doesn't matter because they're not special in this spectrum of people That you have working there They do not require any fiddly equity paperwork and if you've ever tried to deal with equity in any company You'll know that that's a huge relief. They are just a simple entry exit scheme, right? When people join they get the same thing that everyone else has and when they leave they lose it, right? That's it Cooperatives, therefore, are institutions even if it's your first day as a cooperative You think of an institution as being something like MTR. There's been around forever. Well, actually just 50 years or whatever But but if you have two people and they own something equally and then every person that joins owns it equally And nobody can leave and destroy that thing. It's an institution, right? It's not backed by the people necessarily So there are some huge cooperatives out there So the co-op, which is like the least creatively named corporate cooperative in the planet Is a cooperative from where I'm from in Canada. It's really huge. It's actually a federated cooperative Which means that they own subsidiary cooperatives But everybody all the consumers own all the cooperative equally. Amal is another cooperative In India, but it is not a corporate cooperative by the definition that we're using here So a corporate cooperative is not these things Including at the bottom the Indian cooperative legal entity and we'll get there. It's not a union, right? So people always like want to draw this comparison to unions. It's like all of the management and then the workers It's like no, those are the same people now in a cooperative. It's not a kaboots So like it's not like people like live in the office. Well, Lena did for a couple of weeks But that was just because he didn't have a house So it's not communism. It's not a hippie commune. It's not socialism It's not a special equity structure at all nobody has equity in the company And it's definitely not a nonprofit, which is a weird thing that I have to explain when I go back to Canada people were like Oh, you work for an NGO in India. No, it's a company So India unfortunately does not have corporate cooperatives. So we've chosen an LOP agreement to structure our company, which is a limited liability partnership, which is a new thing It's been around for about five years to replace the existing partnership structure Private limited was too restrictive to move people in and out of Of the ownership of a private limited is really cumbersome and it has like time restrictions and stuff on it So we couldn't do that and the Indian cooperative like literal cooperative is not an option for a technology company It's mostly geared towards agriculture And it doesn't it doesn't really work for international business So Indian cooperatives are mostly like you grow this rice and then you sell it to other people in India It's very India focused And I really hope that that will change in time because we would totally be a cooperative if we could being an LOP is actually kind of a pain in the butt So lies that we wanted to avoid So going back to uber for a second every driver is a partner. No, they're not they're a contractor The word partner means something it is a literal definition and it is not an uber driver, right? I don't care if they're making great money. Whatever. They are not a partner in that business at all zero That's a lie. We're a collective if you're a collective everyone needs to own the business collectively, right? You need some paper definition for that thing. This is your business Is it then give me the paperwork that says that I own the business, right or worst off? We're a family early I remember when I first heard that when I worked at one of these companies that I used to work at and the guy was like Oh, we're a family. I'm like, that's incredibly creepy because you are not actually my father and this relationship is So please don't do that with your business So what we wanted as a company was actually different From what a cooperative structure is we wanted some extra stuff, right? So we want to continue to education and corporate cooperatives and I'm guessing I'm all as well Promote continued education for all their employees because of course they own the business. They should be smart They should be doing the right things But we also really like open data open source and being an open company at least internally so far But we had these other things that really have nothing to do with all these ideals, right? We wanted to travel. We wanted to work remotely. We wanted to be distributed and this is sort of saying like I'm a king But I really want to be like a big king, right? Like I want to fly around the world and live in Spain and that's fine, right? Like we this was the conversation in Adiga's like, what do you guys want? They're like we want to live in Spain and we're like, all right fine We'll try and do that. We don't have anybody living in Spain yet by the way, right? We all live in Bangalore and we want to build good technology. So that's sort of like central access for running the company What we discovered later is that hiring people is really hard And this is a privilege thing, right? So if you're coming from a great company and then when you leave that company You're like I have this resume who wants to hire me and everyone wants to hire you You're privileged and that's pretty much all of us in this room right now And it's a different kind of privilege than being able to fly to Spain, right? This is This is personal business, right? And so a co-op is kind of a cheat because you can say you own part of this business You can influence this business you can participate in a democracy So I encourage you to take some version of that Home after today and this is another thing that we discovered later and this is where the disaster porn starts is We did not have a solution for ops people when we started out and we still don't right so our security guard our Secretary and our cleaning lady are not on our LLP agreement and we don't really know what to do there Right because we're teaching them English, but they don't speak English So they can't even really sign the LLP agreement plus are they operating in the same capacity as technologists? We don't really know right so it's not like this like super hippie ideal that people think where it's like everybody is equal The world over that's not true So as we come out of this birthing phase and we start to think about our idols and inspiration, right as a child You need heroes so as a child Roberta Williams might have been your hero, right? She like she basically birthed MMORPGs and it's like wow that's pretty cool I want to be her or maybe you want to be Liskov, but we're talking about business people and Roberta was a business woman So ThoughtWorks is definitely one inspiration, right? So like ThoughtWorks is think about their company however you want But they're interesting to me because they're global right and they're not global out of necessity They're not working out of Nicaragua because they need oil. They are Global by force they push themselves into other countries because they can see this right? They know business is going to be global inevitably you might as well start now Semco is an interesting one if you guys haven't read Maverick. I really encourage you to it's a fantastic book So he has a lot of weird things. He really hates nepotism. So he doesn't allow anyone in the company To have another family member join the company. It doesn't matter whether they're hiring them or not He's just like to avoid nepotism. Just no family members are allowed in. It's like well, that's kind of like a Bazooka solution, but it works So what's interesting about Semco to me is that they are a service-oriented business in the way that we would construct service-oriented Architecture in that if they have a department that grows large enough They actively encourage their employees to leave and go start a business that they can outsource to and they'll Have this kind of arrangement where you're a service that we now consume which is sort of antithetical compared to a lot of corporations these days Buffer is a fairly new one But buffer kind of has this like radical transparency thing where you can go to their website and you can see everybody's salaries and their equity breakdown They do participate in equity that whole game, but they're super transparent more transparent than us And 37 signals for like heralding the bootstrapping revolution, right? If it's a revolution at all because that was part of our initial plan as a cooperative We can't take VC so we have to bootstrap by definition And lastly Tesla for vision, right? So if you look at Tesla, they're quite different from a lot of companies because they're sort of like we are doing this projection thing We're doing it on a 20-year timescale or a 30-year timescale We anticipate that the market and the industry and the technology is going to go in this direction and we're going to try and meet them there along the way, which is Encouraging so at the end of the day, we decided we will be a cooperative consultancy for funding startups or something so we don't really know what we are yet, but we're sort of starting out and Oh, no, it's my it's my like transition slides So anyway, this one says act one try not to die, right? So this is I don't really think there's an analog for being a child because usually your parents will take care of you But we're out on our own and so this is another slide of the DOSA from Adigas. So oh, there it is And so referencing this period where we were doing these round table discussions We were having this sort of referendum for every little bit of the discussion about what our business is going to be You end up getting in this habit of holding referendums, right? And when I tell people of even last night We were like, oh, we work in a cooperative and people are like, how do you not just get everybody arguing with everybody all the time? And actually right off the bat we did, right? So we started the company with everybody talking all the time and we carried into that and so We found out that we're not so much Like the Knights of the Round Table discussing things all the time. We're more like So Voltron is this cool robot and he's made up of I don't that Voltron is maybe a he or a she I'm not actually sure So he's made up of five robot cats and they are manned by people So they are also robots and they're kind of like coming together and forming this thing But we weren't really like that. We weren't really like a super cool robot that flies through space We were more like this little girl dressed up like a super cool robot that flies through space and actually she looks pretty bad So we're probably not like her at all We're probably more like this dude who has taped some cats to himself and is kind of like flailing around But probably we're a step worse than that and they're actually kittens, but I didn't have an image for that So this was our first production release, right? If we're going through the software development life cycle or whatever mode you choose You have to get production at some point, right? And our customers were not happy with us our software broke And so this was our plan and this is why it broke initially We were like we'll form a democracy of some kind and then question mark and then profit right this like old meme Part of the issue here was everybody's their own boss So with everybody is their own boss everyone wants to take sabbatical right because that's really fun and cool And like we'll go find ourselves in the woods or whatever That didn't work That actually did real damage to our projects and we still haven't figured this one out, right? It's really tough to run a sustainable business and let people go on sabbaticals even on on schedules So we haven't sorted that yet But the really big one was we started our first experiment. So this was we can so it's open source now You can go have a look at it It's a decent little rails app, but it was built in in one month I was meant to be this like wiki that we would sell But instead what it became was poor Tim who was assigned to work on we can so Was just the center of this table, right? So everyone is standing around and like do I have this idea is greatest idea But no one else was actually doing any work And so going back to 37 signals is an inspiration, right? They say this in relation to remote So people ask them the same questions. How do you do remote? How do you don't you need to have conversations all the time and they're like no Work is about working. It's not about talking to each other constantly. It's not about making decisions, right? and so we sort of went in a different direction and we instituted an executive Which is basically the suits, right? And so what was the executive for? Well, the executive Did these things right? They made the difficult decisions Such as to kill sabbaticals They had the difficult conversations so we had difficult conversations inside about performance we had difficult conversations outside with our clients Hiring people I'm saying telling people that we won't be hiring them And then finally and most probably most importantly taking this round table of opinion, right? And rather than having everyone sit down constantly and always be talking to each other Try to condense the opinion piecemeal as you speak to people and have these conversations and you try to gauge How much you should be having them so this is actually this is interesting, right? We've split ownership So everyone owns the company equally, but not everyone is participating in the operation of the company equally So I think people get confused about that often And so work is mostly about working that means that mostly those people that were standing around yelling at Tim Need to be writing software, right? So we need to spend 80 to 90 percent of our time doing software development But there are other things that are not just banging out code and doing billable hours in our case because we're a consultancy We needed to come up with a hiring process and a hiring process where people get to become partners in a company is More complicated than hiring processes that I've done elsewhere, right? So that hiring process is staged We do three months as a contractor So you come in you work as a contractor with us we might pay a little extra to like cover the risk that you're taking by being a contractor and then We hire you as an employee and for three more months You're an employee and then after six months you join as a partner But that actually gives us a really long time to kind of evaluate each other You can say do I like working at this place and we can say do we like working with this person? Another one that's more recent was finding a polynomial salary curve. So we tried this in 2014 It didn't really work out our polynomial was very jerky Well, not a polynomial and our polynomial is still not a polynomial We're so we're trying to fit everybody into this curve that seems fair and seems smooth and makes sense Mathematically which is harder than you would think and finding that curve is not about sitting there and discussing what it should look like Right that was NID and Deepa sitting in a room with Microsoft Excel for two days and Burning their brains out trying to make the math work, right? That's work And then finding health insurance was another one So that is going out and investing the different investigating the different companies and then bringing all that information back to everyone in the company and being like What kind of health insurance do you want? Will this work for everybody? That's not really so much a conversation until that last point where we sort of finalized the decision together if we're doing it democratically So we reverse this fix that for you profit first, which is the 80 to 90 percent software development And then we actually have question marks remaining for like what is the rest of the business, right? So now we have a foundation of we just want a sustainable business that can move forward And then we'll do interesting stuff later So this was in our child analogy a child's garnering their sense of self, right? So who am I I am this physical entity and sort of stumbling forward like Voltron or or a little girl or whatever The next step was asking ourselves, what are we actually good at? And we're pretty good at running software projects or reasonably good at it So why don't we run the software company like a software project? And so Tejas who's actually in the center of the front row here He wanted the credit for this and I'm happy to give it to him So he created these hideous crafts, right? But they're amazing. They're really fantastic. So he's laid out our cash flow our Incoming invoices our sales leads, which at the time of this graph were not particularly good At the bottom there and he's done this all with a script, right? So that we can run this once a week and just shove in everybody's faces Our profit or our lack thereof because that's your sustainability, right? That number one if you don't have profit your business goes away And then you don't get to do all the other fun things of being cool Voltron together So then the next thing that we did and this is a much more recent development is to take Our strategy for a software project, right? So everybody's strategy for a software project is more or less the same I hope which is this sort of ordered thing of one two three eliminate processes as much as possible and then Take those processes and automate them with software if we can or automate them some other way or worse But still functional outsource them or at least document them Right, and so this is our attempt to say everything about our business We are going to document and then if we can we'll automate it with something behind that But this is your entry point if you want to know how to take a vacation If you want to know how to take a sabbatical if we ever get there If you want to know how to file for health insurance, it should all be on here, right? This should be the one place that you go for all the information about the company Including everybody's salaries and all of our finances and all of that sort of stuff So going back to disaster porn and mentioning running software projects, so this was This was not our best software development project This was us trying too hard, and so we picked up a client that was particularly bad They had a lead developer in the US who was Mildly racist the guys on the team all the time not all the time but frequently They didn't have any sort of project management. They didn't know how to run a software project at all So that was left to us And then the last straw was it should have really but the last straw really should have been the racism But we weren't Thinking clearly the last straw was finally where they brought in a project project manager Who told us that you guys need to work this weekend? It's like this is an arbitrary like there's no reason to work the weekend And we fought back eventually, but we we made the mistake of trying to make this work, right? And I think that if you're running your own business, which I had never really done before and not seriously It's tempting to make this mistake, right? Things are looking like they're dying and you want to save them You want to pull them back from the brink and you try really hard to do that But sometimes if you're gardening you let the brown things just like turn into compost, right? And you tend to your other plants, so this is the first lesson if it needs to die let it die So at this point That's sort of a divergence that was just like one really bad thing that happened with us Which is sort of a data point for us not necessarily always knowing how a software project should work This was our first look in the mirror was fairly shortly after this Where it actually came out of an internal argument So the internal argument was we'd mostly decided on us being a cooperative And this was like more or less the structure that we were going to do And somebody disagreed with that vehemently In the midst of actually a project that we're working on and so I do do this on a whiteboard This isn't the original drawing, but it looked something like this Which is our foundation is the cooperative and then on top of that we have some democratic something right at the time It was an executive, but it's whatever and then on top of that We have a revenue stream which is consulting and we can replace that for some reason by the time I finished drawing this it looked like a layer cake So I put candles on it the candles are experiments that we run and what this represents is how quickly things change with time So the stuff at the bottom changes slowly and the stuff at the top changes Maybe daily if it has to really quickly it can be volatile. So the candles are volatile. This is a terrible diagram but it conveyed the intent and Then Nina came up with this so he was like it's not really like a cake because it cake doesn't change with time Other than getting consumed so it's more like a planet where the core is this nothing nothing thing And then outside of that we have the notion of the cooperative and then outside of that We have some sort of structured democracy and then outside of that we have our primary revenue stream Which for the time being is consulting, but maybe we'll build a product and make it rich or whatever and it'll replace the the crust on the earth's surface there and then the trees are the experiments and They become bedrock when they die, which is kind of backwards But I mean all these diagrams are gonna be kind of broken and Tim noticed the other day that actually our planet diagram is very similar to this unpublished Dilbert cartoon, which is somewhat embarrassing and this is the danger of Coming up with imagery or coming up with slogans or coming up with a mission statement Right is that as soon as you do that you embed something in your culture that maybe you don't want And so what we do want is a constitution We want something that's legally binding and defines our company in terms of lawyers, right which is a weird thing to say, but So a constitution is great and we effectively had one that we'd verbally agreed on we're gonna be this cooperative and blah blah blah Write it down right you need to take this constitution and you need to legally embed it and we started out With sort of a constitution, but we did it backwards So we took an LLP agreement from our lawyers, but we just took a vanilla one and we were like we'll just fix this later Right like I'll just I'll just do this hack now and like I'll fix it tomorrow. I'm tired. I haven't had enough coffee We screwed that up royally. This is actually really really hurt us So this has been two years in the correcting to get this LLP agreement back to where it needs to be So take your constitutional ideas and write them down as best you can they won't be perfect But if you're starting a company you want that right off the bat and if you happen to want to be a cooperative Please wait, we will once we have this LLP agreement ratified that's been it's two years in the process But it should be done by August September once all the changes are through we will open source this actually So because there's no such thing as a corporate cooperative in India This is an alternative you can use this document as a template and you could come up with your own should you choose? So at this point we had some ideological exits So these ideological exits were people who how am I doing on time actually? 15 minutes, okay So these were people who came in and they were in the nothing nothing phase and they're like we wanted to be just about anything, right? and What we chose was this cooperative and they left and what you need to learn from that and what we needed to learn from that Is to be okay with exits, right? So this is really tough you have to be okay with leaving the company Tejas left the company recently It is so like sad for people right, but you have to get over it because people move on people find other things to do right and it's okay And so the truth is that our core this nothing nothing thing it does change with the company but slowly right and so in the analogy of an evolution of a species this is Possibly a flawed mutation is one of these ideas coming up and then not blossoming or possibly it's a new species And that's what your company becomes So the lens of itself from the very beginning this nothing nothing notion It was an experiment and what we've tried to capture is an experiment culture So some of us like to think of this as test-driven business So you set up the test and then we try to come out with a positive outcome from that This is just like basic science right hypothesize something and then you try it and then you get the data And then you figure out whether or not you were right and that's because we're all wrong about everything all the time Basically, so running a business is not like being a London cab driver being a London cab driver your hippocampus actually changes shape and you remodel your brain physically To deal with all the streets in London because their test. It's called the knowledge is very intense Running a business is more like this You have the Google Maps directions to somewhere and if you get off of those directions You might be screwed right unless you know what those streets are like the back of your hand like a London cab driver You're not gonna do very well if your GPS GPS conks out and so this is what we are So we have to use experimentation to find our way through So we have a few of these going on right now Kulu.in is a product that we're trying we've tried to take external equity in other companies actually So that's another experiment. We've tried and we have a design practice going on which is sort of an addendum to software development But most of anyone's data is not gathered by way of intentional experiment Right, you are not running explicit experiments all the time as a human being to figure things out You're mostly observing stuff, right? So you're looking at things and you're trying to gather the data as you go along And if you notice that something is messed up you will try to correct And so that's actually most of what we've been doing as a business is when we recognize that something is broken Then we'll try to extract an experiment out of that and run that intentionally, but we are not Running experiments all the time for every little piece of the business So once we got past all of this kind of Disaster stuff we started to have a little bit of fun I'll go through these really quickly the success stories of Nolenso or anywhere are the boring ones Right, so we switched from writing a lot of ruby to writing a lot of closure. We started writing services that had really like tight Performance requirements. We threw out a few MVPs Some profitable services and Abinav started teaching Haskell classes in the office Which I don't know if that's going to become a formalized thing that you guys can sign up for or not But they're pretty fun And what we discovered is this number two slot right is and it was sort of implied in the beginning But that we love technology so that is sort of the core of the business is where a technology business We don't necessarily know what else it might become number three is still a question mark And this seems obvious when I describe it, right, but it's not you can make a software company You could be map box right so those guys love maps and they might not love maps more than software And so you might like any of these other things and you might be really excited about those And you might build your business on top of those so you might not be technology at your core This caused another exit for us actually We always had this conversation about we can be anything we can be anything and our canonical example was we could be a cafe Like we could be this cool Bicycle cafe where we were like serve good coffee in Bangalore because it's like it's easy to get decent filter coffee But it's not easy to get decent Italian coffee So we were like yeah We'll be like start this cafe and it'll be really cool and we had a guy leave because we didn't get there in two years Right. He's like I wanted something else, right? I just didn't want to be building software forever and ever and that's sad But you have to be okay with it, right? So this is really important and it's amazing How recurrent to theme this is that you need to be okay with people leaving your company and it's important to be gentle Right in all cases. So it's not like he was fired or anything But in the full spectrum from being fired to leaving of your own volition people have huge Emotional responses to leaving a company and he was really sad and so it's important to be gentle with him and tell him that hey It's okay, man Like if you want to go do something else if you want to be a teacher if you want to go be a farmer then good like more power to You right and what I would say especially in his case, but other people That I've known since I've moved to Bangalore in the past three years is This term that I've come up with To try to contrast the rock star programmer imagery which is gentle nerds Which is people who just like work really hard and think really deeply and often are very philosophical or very mysterious and I don't understand them, but I can identify them, right and I am definitely not one of these people But if you start to see them in the crowd and they're often very young you should pick them up and so what we got to In terms of a place of where we needed to be was Fully autonomous right so trying to find autonomy is difficult And this is analogous to a child growing up to be eight or nine years old And they're taking a BMTC bus across the city for the first time without my mom You know and I'm scared and the reason for this the reason for autonomy is because we went too far with the suit Thing right the pendulum is swinging from Referendums over here to people making unilateral decisions over here And I definitely know that I was part of some of those unilateral decisions on this side Comparatively you could swing the pendulum back right so we did a construct crawl a few months back And there was a Swiss fellow that gave us a suggestion He was like oh you could write an iPhone and Android app and you could have any time a decision point comes up Everyone could get the decision broadcast to them and they could vote on it That's really scary right because we are not a hive mind. I don't know if anybody's ever seen czar does But this is what they do so they're telepaths and they like vote on every single conceivable decision together That's not better right that's just going back to referendums so this is a game called a little big planet and this is a little more representative perhaps than Voltron in terms of what things started to look like over time right so the way a little big planet works is No one can get left behind behind and nobody can die So this is a cooperative game where you have to just forcibly push your way to the front and figure things out and cooperate To be kind of a team together And that's sort of what autonomy looks like right you're constantly picking someone up and throwing them ahead and the Structure for autonomy is to throw people in the deep end, but not to let them drown right so if people are Incomfortable taking sales calls first they shadow on the sales call So you take the sales call and they listen in right or they maybe chime in a little bit And then the next time if they're comfortable you have them drive the sales call right so they get on the call They engage the conversation, but you're there to help them along and you help them out until they're comfortable and then they're autonomous and then they take sales calls on their own and This takes forever This took us two years to get to a point where Even a few people have started to like really engage autonomously So don't expect this to be overnight and I don't have a concrete event driven story for you guys there But the lesson is to persevere and even to be relentless you have to be kind of insane with pushing people into positions that they're not comfortable with if you want This this sort of operation in your company And the risk to this of course is not that these people are going to fail So you put somebody in an uncomfortable position they might fail right and say it happens But your business isn't going to be a disaster the risk is self-flagellation That person is going to be really hard on themselves If you remember the first time you picked up a musical instrument or drove a car or tried to write your first program You were really hard on yourself right or at least I was because you aren't comfortable with this activity yet And so you have to be again really gentle with everybody when you put them in these positions It's worth noting that despite getting to a relatively autonomous state Where people are mostly making decisions on their own and you don't have to check in with everybody all the time We still can't decide where to go for lunch on Fridays. So these kind of like global decision-making processes are still difficult There are bonus points for autonomy and this is network resilience, right? So running a company I find is actually a lot like software So if I am in the center there and I'm making a lot of connections But I'm not providing those connections to other people if I'm not hooking people up with people that may potentially hire them away, right or My they might say something silly to if I consider myself this important connector If I leave the company or I die Then we lose all this contact with these clients, right? So what's better is if I can push people let's say it's me It's probably not me But if I'm in that as central position if I can push people to be connected to the clients to say the Accountant or the lawyer or whoever your business is dealing with and each other, right? When I die or when I go find a better job be I go join Flipkart whatever These connections are are not lost, right? So the the Resilience of the network is still there. It's weakened for sure But now you can go around and you can start to fix these connections without me, right? Somebody else can start to take the lead This is also an entry-exit bonus. So again when you think of People joining and leaving your company People often think about the risk of the exit right or like oh somebody's gonna leave like oh my god It would be terrible if this person left the company. It's like well, maybe right? It might be terrible But there's also this possibility that they're going to bring something new right they're going to tell people about your company They're gonna tell you guys in the company about this neat new thing that they're doing and maybe it's not even software development Maybe they did go be a farmer and maybe you want to be a farmer and you're gonna find this out, right? And so trusting people is the antidote to this fear you have to trust everybody that even if they do something that you Don't like that they're doing the best that they can And so a more recent challenge and this is like the last piece of disaster porn and this is From within the last nine months or so Was we hired a business person an actual business person because it was all software developers running a company like a software project Mostly and she came in and she plotted our finances and said hey Did you guys know you've been cash negative for six months? Hi Deepa if you're watching this from I don't know if this is being live broadcast if she's watching from the office So she plotted our finances and we actually did not so great This was like nine ten months ago But it was like for a six month period where we were sending people to the US for conferences and we were trying to get people educated We made these mistakes, right? We were hiring contractors who came in to teach people which is part of our MO, right? Where's your like education is important for everybody in the company? So for ops people it's teaching them English and teaching them to use computers for us It's learning new programming languages and learning new paradigms The contractors were coming in to like help us with closure and to help us with project management We also underestimated our salary spend so there we were just trying to be fair And we sponsored too many conferences in 2015 which was about sending people out for education So our fault and we actually forgot our own rule, right? If we had Tages as graphs at that point we would have been okay because we would have noticed like oh this seems to be dipping a lot So we fixed this since by dialing back back expenses and things just in case you were concerned about no one's those finances for some reason The lesson here is to know your limitations, right? So we were essentially running the business for two years without a competent person at the helm a business person at the helm And so even two years later or like almost two years later when Deepa joined we were still this guy, right? We're still like not super robotic not super sexy. We're still figuring ourselves out and So that takes us to puberty right which is our third year so as Nalenso gets into its third year We're figuring out this third thing So we know that we need profit to stay alive and that we need that more than anything So we need to pay people's paychecks and stuff and we know that we love technology But we don't really know what the future of the business looks like so this is kind of abstract Right, this isn't really like a direction to take and so figuring out Who am I as a child or as a teenager? Who what is my purpose? This is maybe more of an adult adult question. I'll let Louis CK answer this one really briefly People get all knotted up. I don't know what to do with my life Look at her know like what it should be or like I don't know Should I like do with my like my life Just get food put it in That's it put food in here Walk around and look for food And anytime you see any food put it in here. Just take it put it in here So He's being facetious, right? But that's a great lesson to remember So we are these privileged kings and we're giving ourselves more privilege So it was like we've built a software company and now we love technology and we're doing closure We're doing these fun things and you guys are doing interesting things as well You're like everybody's in this position of thanks Everybody's in this position of privilege. This is the last slide and What becomes tempting is to say like all that stuff is easy right paying people's paychecks is easy And we're like we'll just don't stop worrying about that and I'll stop fantasizing about the future of The business and what we're going to become and we're going to become this great thing and we're going to solve world problems We're going to be the next Tesla and the important thing is to match Fantasy with reality and measure the Delta right so like know where you are today and know that that's what's true and Think about what you want to be and fantasize about it all you want right but don't pretend that you're that thing and so this is a very important thing for us to keep in mind and Remember and I think that it's an important thing for all of us who are in these privileged positions to remember If you want to see some of the initial things the resources are here and the slide deck is here So you can get all those links if you want to shout at us If you have any questions about the dumb way we're running our business You can talk to either my Twitter account or our Twitter account You can ask questions in the next three minutes or I guess I'll be outside and I can answer questions as well Questions. Yep. I don't know maybe 150. I'm not sure a lot. This is the first A construct all we had like 50 questions Hi, Steve. This was in there I'm really excited about the way you're functioning and you are experimenting with the organization because at the end of the day Hi, just me He's a very good friend of mine for the past ten years or so He instantly Kind of favored my mention of you which basically says how much love Your ex partners have for the company and that love will take you a lot lot in the future Okay, so what is the I mean when when everybody is a partner? What are all the kind of? Difficult decisions you had to take So one difficult decision so I did I'm assuming you're referring to possibly the like Positioning an executive to make difficult decisions slide. So we actually had an exit which was about performance So that's a difficult decision. It's a difficult conversation to have so you can't have Eight people or twelve people or however large we are now you can't have a dozen people have a conversation with one person and be like By the way, things haven't really been working out that needs to be one-on-one And you need to have someone with the experience to deliver that message and then to have the conversation and to go back and forth So that's definitely a really difficult conversation that we've had The conversations with clients haven't been as difficult right But another maybe more serious conversation would be the conversation with the lawyers So we've hired K-tan and co to look at our LLP agreement for a really long time And they have this thread of continuity And so we need someone who we can trust to carry on that conversation intelligently and remember all the details and take notes and all that sort of thing So that's a another difficult thing that you need to put someone in that position to own that That responsibility so that's actually been made in deep. I have done a great job Question is how do you preserve this culture and what what measures are you taking while hiring or at the time of? So so that's a super tough one. So there's this The way that I visualize it, and I think everyone visualizes this really differently, right? I see it as being a spectrum of Mono culture, which is dangerous and being so heterogeneous heterogeneous That you kind of explode right so like you could hire people that are way out of band So you could hire someone who's a racist or you could hire somebody who doesn't know how to program But that's probably a bad idea and then getting too close to this is probably also a bad idea So it's this thing of like finding the bubble boundary of homogeneity and sort of pushing a little past that But probably not being too exploratory right like we're already pretty diverse We have like half a dozen religions in the office and we have a lot of different ideals So it's not I don't think that we're really in the danger of being homogenous But I don't think there's an easy answer to that question either