Tech companies have a high risk associated with them. Working together with transparency and democracy minimizes or eliminates most of the risk traditional startups face. Most of the risk in our current economy occurs in the separation (and therefore informed guessing) between the creator and the user. Most of our true risk exists in the first project and we have less risk as we progress and gain members.
I looked up what risk a startup faces and I found this article “14 Startup Risks Entrepreneurs Should Consider When Launching their Startup”
I will go through each of the points and explain how a company owned by all of us and operated with transparency and democracy minimizes or eliminates almost all of them.
Their words are in bold and how we deal with this risk is under each
1) Capability Risk The risk that the startup is unable to scale its capability on a timely basis and at levels required.
We are deigning every project with scalability in mind. Our members are financially and emotionally invested in our success and will work with us as we increase capability when we are less than optimal. We are holding back our scalability to remain functional as we systematically grow. When we manage to effectively work with the starting number (10K-1 million) then we double by allowing everyone to invite 1 person. If the starting number itself is too large we ask the large membership for solutions, and create those solutions first.
2) Design Risk The risk that the product or service design does not meet the required performance standard.
We are designing the apps for the request of our membership if it does not work we have systems in place to hear why it is not working and get it to work. Allowing issues to be brought up by any user means that we all get a better product with high standards. Again members are emotionally invested and will bring up their honest feedback to improve the product for all users.
3) Development Risk
The risk that development of the product or service is not completed on time, within budget or to defined specifications.
This is a risk but minimized by our structure and transparency. We have $250K and a budget that is lower so we have a large contingency fund. If we DO go over budget the entire membership can offer solutions and cost saving strategy or we can fund-raise more money together (have everyone put in a tiny bit more or recruit more members at original investment of $25)
4) Economic Risk The risk that the company’s success is sensitive to external economic factors.
We are creating a whole new system that does not rely on current existing market forces. Currently we need to be aware of the economic factors that directly impact us and if there is a problem we need to see it quickly, deal with it and learn so that it is less likely to happen in the future. Many eyes and brains that are involved and care about our success can forsee problems and brainstorm solutions in a much more agile way.
5) Economic Life Risk The risk that the product or services useful life in the marketplace is shorter than originally anticipated or projected.
We are constantly improving our projects since we are the developer and the user. We listen to our membership and create new ideas constantly and improve old ideas so there is always improvement in response to the members requests and suggestions. Some projects may outlive their usefulness but the data and function can be saved and put into newer versions.
6) Funding Risk The risk that funding will not be available at a level or timing required for the startup to succeed.
For the first few projects we are Crowdfunding (not making it within budget or time frame is addressed above in point 3). The funding model is eventually like Netflix where people pay $10 a month and get access to our catalog. We are listening to our membership and designing tools that have the most positive impact on their lives. There will be little attrition and we can budget for our numbers growing or remaining the same. We have steady income to budget from. This risk is minimized (not eliminated).
7) Legislative and Policy Risk (a.k.a. “Regulatory Risk”) The risk that legislative and policy changes will result in higher costs to the startup.
Transparency and crowdsourcing are our greatest assets in this risk. In the beginning the laws could be changed to stop us before we have enough membership or our name known so that people care and can work together to stop it. With so many people able to see where laws restrict us (new and existing) we can work as a large base to make sure we are in compliance AND change the laws that are unjust. When we lobby we do so with complete transparency and involvement of our member base.
8) Maintenance Risk The risk that maintaining the company’s assets at appropriate levels will cost more than anticipated.
We have a much lower maintenance costs then a single start up as we have economies of scale. If it cost more than we anticipated to maintain our current apps we can vote for solutions; more members, higher subscription fee, only make income generating ones for the next few projects or just maintain our current ones. Again having the membership as owners and operators means that solutions can and will come from anywhere.
9) Management Risk The risk that the management team lacks the skillsets and experience to execute the startups’ business plan.
We are using democracy and transparency to offset this risk. The board of directors is the closest thing to “management” and they are operating in full view of the members that empower them. We all fail or succeed together. Anyone can offer management level suggestions as they have full access to all the information. If the method we are using is not working to move us forward, we troubleshoot THAT.
10) Operations Risk The risk that operating costs are greater than budgeted, or that the service cannot be provided at the projected costs.
We are designed to have minimal operation costs. We reduce redundancy of departments where possible (one legal and HR team for dozens of projects not one each). We utilize volunteer labor of crowd sourcing whenever possible and create platforms to help members find the jobs they WANT to do for free. Our finances are completely transparent so that any member can suggest ways to bring down our costs or bring in more revenue. Again our membership are direct owners and if we go out of business they lose all the tools we have co created. We will always vote to maintain the company (with people who do not want the changes needed, leaving).
11) Procurement Risk The risk relating to the ability of the startup to procure quantities and pricing of required scarce resources.
We are starting as a tech company and there are few scarce resources involved. Labor is one scarce resource and we have a different incentive than the tech giants to recruit with. People who want to work for the greater good while having all their needs and most of their wants met will choose us over the Tech Giants to work for. Those that hold salary above all else will work for the Tech giants. We get the workers who are dedicated to our mission.
The other scarce resource we are dealing with is “phone realestate” of our members. All apps have to compete to have their space in the lives of their customers. Our apps will be designed to work in unison so that less real estate is needed. Dozens of features in one app takes up less space then dozens of apps by themselves.
We are creating the tools to deal with scarcity IRL for our members. We create tools to give our members access to food, shelter, resources etc for less and less money/time. When we move into IRL solutions (buying up the means of production etc) we have the data to minimize this risk but it still exists ( on a much fairer scale then under current capitalism). We work together to find internal solutions to where scarce resources are best utilized
12) Research Risk The risk that the quality of the initial research upon which key company assumptions were based was flawed in an impactful way.
We are not researching to see how we can create something to profit from the hypothetical masses. We are asking our membership directly what they NEED. If this research is wrong then the membership themselves did not know what they wanted. This is a real risk that we are constantly looking for so we can correct for it. Eg the members say they want a platform that helps them share food but then it is too complex for most users, so we make simpler version for those that require it.
13) Technology Risk The risk that less than optimal technology is developed or utilized or that a competitor leapfrogs the startup’s technology.
The ONLY way we fail is if EVERYONE gives up OR if someone else does what we are doing faster and better.
IF they do that, we join them.
If someone else happens to create a transparent, democratic technology company we all own together before we do, then WE don't have to. We are doing what the for profit tech companies can not do and they are not our competition. Any competition must also be owned by the people and be open to everyone. We are the people so we can join them too.
14) Volume / Demand Risk The risk that the actual market’s demand for the product or service will not yield the projected sales volumes.
This is a REAL risk that we account for in the beginning. We do not make our first project (or any subsequent project) UNLESS a minimum threshold of users/members is already interested. We are not hoping that 10,000 people will want to put in $25 each we are waiting until they DO to start the first project. We are creating in direct relation to demand and supplying what they want.
Because we are doing it TOGETHER there is no failure. We are constantly seeking out ways to improve our lives and the company that gives us those tools.
The exact structure of every aspect may change as what we thought would work needs to be tweaked. We create a dynamic system that responds to the needs of our members (all the people of Earth who want to) by allowing anyone to voice opposition or risk as they see them. We encourage descent we do not suppress it. Every mistake is learning and helps us improve as individuals as well as improve the system itself.
