Pia Mancini joined the show for the first episode back from a nearly 5 year hiatus. We talked about her work at DemocracyEarth, being a mother, her new role as CEO of Open Collective, their focus, supporting ad-hoc community formation all around the world, their revenue and growth plans, and their path to sustainability.
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Pia, you're now the CEO of Open Collective. We've had you on the Changelog episode #234 back in January, 2017, and that's where I got to know you at... But you've got a much deeper, richer story; you're newly CEO, but that's not your first time as a CEO. You're from Argentina, so you're also an immigrant in the United States... You live in the coolest city in the United States, New York City, and now you're here on Founders Talk.
Hi, everyone. Thank you for having me.
Absolutely. I've been a huge fan of you and the work you've been doing with Open Collective for quite some time now, so the recent news that I saw for you to bump into the CEO role was -- I was like "Yes!" Behind the scenes I did a little fist bump for you.
[laughs] Thank you.
How are you enjoying this new role for you? Is it a challenge? Is it your main focus?
It's definitely my main focus, and it's definitely a challenge. This is the first time that I took over a role like this in an actual business. I've been leading organizations before, but in the either political or non-profit space. It's quite a challenge for me from a numbers perspective, potentially... Getting used to having that -- I'm not the most detail-oriented person, so that's a learning curve for me, and I'm super excited to do it.
Let's dig into some clarification, so that the audience listening to this can kind of have some frame of reference. Currently, you are the CEO of Open Collective, but you've got this rich history of activism around democracy, you now call yourself an open source sustainer, obviously one of the founders of Open Collective, you are still currently the chair of Democracy Earth, which is a foundation, which I'd love to have you share more details about that... You're from Argentina, but you're doing some interesting things for a while now. How far back into your past do we have to go to kind of find what might be the thread of the beginning to where you're at today?
[00:04:09.21] When it comes to activism, pretty far back, I have to say. I started the first organization with some friends called Interrupción that still exists; it's like Interruption. That was many, many years ago, in 1999.
That's a long time ago.
That was a long time ago when that started...
I went into the military the year before that. In 1998 I went into the United States military, so that's been a long time ago for me, so I know for sure that's a long time ago for you.
That's a while, yeah. I was pretty young. We started this organization in sort of fair trade and responsible consumption, and we started working in that space... And then very soon after that I moved into politics, pretty much straight away, and I've always been involved in politics from different spaces and different areas. I started doing in think tanks, and more traditional civil society spaces, and then I moved into government, I moved into campaigning, I did campaign management for several 3 week campaigns in Argentina. From there, I moved into co-founding our own political party, and then running for elections myself. This was in 2013.
Yeah, that was fun.
What is it about politics that gets you going? Some people get into it, some people don't - what is it about politics that gets you going?
For me it was a couple of things. I guess deep, deep down it was a sense of responsibility, in a way. I come from quite a privileged background; I was always able to travel. Both my parents are self-made, but they did very well in life, and we always traveled. I was able to do internships and work for free in order to gain experience. I studied in a very good university when I wanted to study, so I felt very privileged, and I always had this feeling that I had to give something back.
So that was one area... And then the other reason, or what really gets me going about politics is that it really impacts our lives, like nothing else. I was always very interested in power and dynamics of power, and how we can set rules to govern ourselves, that really make us be our best selves... That really gets me going, I'm fascinated by that, and it's something that is kind of ingrained in my DNA, I guess; I can't get away from that.
Like, no matter what you do... Like Open Collective, for example - you're still getting into politics in a way, because you're abstracting away the business and the banks and the LLCs and all the minutiae, and providing a clear path to organization for some folks around the world. That's, to some degree, political.
I believe, in general, that there's three ways of achieving systemic change, like changing systems in a really massive scale. One of them is revolution, and we know that that's not the best avenue. It's a process that you can't control, there's a lot of human suffering, the costs of a revolution are great, the results are completely uncertain, and everything is up in the air.
[00:08:03.17] The second avenue for systemic change, at least in my mind, is changing the system from within. That's probably what I try to do for many, many years, like running for elections, getting involved in politics, doing activism, trying to change things, pieces, tweaking the way the existing system works, and I got very frustrated by that. I think while there are some benefits in these incremental changes, it also has a very clear wall, that is that you are dealing with power, and those in power don't wanna leave power, so they don't really have an incentive to devolve power and change... And I really learned that the hard way.
Then the third avenue for systemic change is building alternative systems, and rendering the existing systems obsolete. What I'm trying to do with Open Collective and also Democracy Earth - that's the approach that we take. Open Collective is an alternative system for communities to be able to fundraise, to have an organization, to work at a different level of this stuff, if you want... And abstracting all of that away, and enabling groups and communities and networks to thrive and do what they love, without having to worry about [unintelligible 00:09:33.14] being inside our legacy system institutions. It's a mission that I have in life, and Open Collective is part of that.
Since you've mentioned Open Collective and Democracy Earth - I know you kind of teed up Open Collective there, but maybe go back to Democracy Earth... What are some of the things you're doing there? What are these two entities for you?
Democracy Earth is a foundation, and what Democracy Earth does is thinking about what democracy looks like for the 21st century. So what kind of political institutions we want to give ourselves for the type of society that we have today. The government that we have today was designed 300 years ago, for a completely different society, that had information technology that is 500 years old, that is the printing press [unintelligible 00:10:26.19] based on where you're living or where you were born at.
Democracy Earth - what it does is it imagines what's the democracy that we want for the technology that we have today, for the society that we have today, for the communication technology we have today. So the foundation not only does the abstract thinking and writing about this, but also the practical aspects of it. It develops a platform, actually a liquid democracy protocol called Sovereign - an online liquid democracy protocol. A liquid democracy is a system of democracy where you can vote yourself on issues, or delegate your vote, your power to someone else for that particular topic, anywhere in the world.
So I could delegate my vote for environmental questions, I could delegate on someone else my vote for healthcare issues, I could delegate my vote on someone else on matters regarding tax reform, and it doesn't really matter where they are from, or if we are living in the same space.
It's thinking about democracy at a global scale. We think of the world as a network of peers that share a planet, and we think about what the democratic protocols for that constituency would look like.
And at what point did you co-found Open Collective?
[00:12:08.08] Xavier, my business partner in Open Collective - he started Open Collective in 2015, and I was nine months pregnant when he called me and asked me if I wanted to join as a co-founder in this project that he was starting. For me it made a lot of sense. What clicked for me was that we were helping shape the organizations that would use this new democratic protocols that Democracy Earth was thinking about. So I said yes, and a couple of months later I started. So Open Collective is as old as my daughter, pretty much.
Yeah, I guess. They were born around the same time; you were nine months pregnant... Everyone thinks at month 9 you have the baby; it's actually the end of the 9th month, so really technically 10 months.
Yeah, no one tells you that.
No one tells you that. I mean, this is a first for me, I believe, to be in this position to have a conversation like this... One, for a woman CEO, and then also a mother, and an immigrant. That's just intense for me. There's a ton of different directions we can go, so obviously take us in the directions that are most appealing to you. You're a co-founder of this thing, you've done Democracy Earth... It's interesting that you say that the reason why you were motivated by Open Collective and what it was doing was because it was allowing organizations around new political protocols that you were helping develop. Obviously, it's leading into the right direction, but so many people around this world try to organize, especially obviously in open source, which is where you've found some significant success... Obviously, in localized meetups, whether it's technology-based or not... You've got people who are trying to organize (or self-organize), and it just is painful to create an entity just to do things. That's, in a nutshell, to some degree, what Open Collective Provides - a platform to be able to have a front-end, which is the people in the community, and some sort of back-end, where you have either a foundation, or... I think you call it a fiscal sponsor - is that correct?
Something like that behind the scenes, to allow money to be transferred, to enable things to take place... And to organize and sustain things. That's an interesting direction. Maybe speak to that, since you said that Open Collective -- your daughter is roughly the same age, because of the same timeframe... What was that for you? It's that your first child? That's a new thing for you, it's gotta be scary.
Yes, Roma is my first child. And yeah, I think that when I agreed to join as a co-founder and started pretty much full-time in open collective, and Roma (my daughter) was two months old, or even less, I think I didn't really know what being a mom entailed. [laughs] I wouldn't say that I would do things differently, but... You know, it's when you go into something without knowing what to expect, and you just launch into things, and things happen... But if you knew in advance how hard it was gonna be, I might have not done it. So I'm really glad I didn't know.
[00:15:47.29] But yeah, I have some really funny stories. I had one interview, a meeting with a potential investor very early on, and Santi, my husband, was stuck in traffic coming back from Palo Alto... I had to meet this guy, and I had Roma, and we didn't have any childcare... So I called him and I said "Look, I'm with my daughter. We can postpone this meeting, or you can come over to my place and we can have the meeting here." He's like "No, no, no. I'll go over, don't worry." And at one point, I was pitching Open Collective, I was showing him the platform, and Roma was a bit fussy, and I had to give her a bottle... So I just looked at this guy and I said "Do you mind holding her for a moment?" [laughter]
He was sitting there, with my daughter, while I was preparing her bottle, and pitching Open Collective at the same time... [laughs] And he left saying that he was absolutely sure that he wanted to invest. No doubt, it was funny. He was a really nice guy. Yeah... I've done a couple of things like that. She's been around every call, every morning stand-up. I don't know, it just works. You just do what you have to do, and make it work.
What do you think the biggest challenge -- I'm pretty sure you've been a CEO before, based on my research... Is that correct? This isn't your first time.
Oh, a CEO of a company - yes, it's the first time.
This is the first time, okay. So new mother, growing, so still evolving, still making her mark with Open Collective... It's obviously doing good, but it's not like it's -- I don't know how to describe it. You know what I'm trying to say...
You can say we're growing.
Right, yeah. You're still attaining stability.
Ups and downs, ups and downs, and every day is different, every month is different, every year is different... So new mother, new CEO - what are some of the biggest challenges you face today, with those two roles upon you? They're both huge roles.
I don't think I face particular challenges from the motherhood perspective. When I got pregnant, I sat down with my husband and we agreed that this was 50/50 equity on our daughter, and that's something that's a rule in my house. So we really share all responsibilities. I would say at this stage - Roma is two and a half years old and she's pretty independent, and has her own organization, nursery school and things like that, so it's easier. I think it was really harder on me when I was breastfeeding. That's very challenging.
I remember we started working at this office space and the bathroom didn't have a plug, so I couldn't pump, right? I didn't wanna stop breastfeeding because I was working, and I didn't wanna stop working because I was breastfeeding, so I had to run out of the office to my doctor's office... He would lend me a room to pump for half an hour and then go back to work, and things like that. The world is not super prepared for these situations in general, or the office space... I think that that was the most challenging thing for me, having to come back really tired, and put Roma down, and pump while I was answering e-mails. All of that -- the first four, five months are very hardcore. After that, at least for me, everything has been much easier.
[00:19:46.08] I'm sitting here listening and completely empathizing, because I'm not sure when Roma was born, but my son Eli was born in March of 2016, so I think they're in similar age, at least... My son's just under two and a half years old, so they're in similar neighborhoods, and I can totally relate that the first few months are absolutely hard. Super challenging. They need your attention, they can't walk, they can't do anything for themselves, and you're trying to keep doing, but then also doing your responsibility as a parent, and it's just probably the most challenging part of a parent's life - those first six to nine months of the child's life.
Yeah, for sure. But it also gives you an extra energy, extra creativity... I don't know if it's the hormones or what, but you have that...
Yeah, you go into a different gear. You just keep pushing forward. I don't know if that's something that kind of makes you just shift gears and do the extra thing, and you can do it. Also, what I found mostly with motherhood is I don't have time for BS, essentially... Like, at all. I have very little time to waste or to spare, so you become -- at least I became really good at saying no to things, and just really cutting loose things or situations or people that I just didn't have time for. It made me much more focused, because the time I had away from my daughter, it's like "I'm doing this", right? Otherwise I'm with her.
Yeah, it'd better be time spent well, otherwise you're like "I would have loved just to hang around and cuddle, and snuggle."
My funniest moments is just snuggling with my son; he's just so much fun to hang out with, and chase, and play, and stuff like that. You take that time from me, if you're wasting my time with something else - it's a distraction. It's you and the relationship you have that suffers, because you could have spent that time better.
Yeah, but I don't know... I grew up with a working mom, an entrepreneur mother, totally self-made, so for me this is... I don't know, it feels very natural. Now she's at the age that she started to complain that I'm going to work, but she's been used to that. I also travel a lot, and she's used to me traveling, but every now and then she gets unhappy around me leaving, so I just have to explain to her that I love what I do, and then one day she's gonna find something that she loves, and she's gonna love her work, and she's gonna do something that is meaningful for herself. Yeah, that's really the only thing I can tell her, because then I'm just gonna go and do my job, and do what I wanna do.
In 2016 was when you were asked to co-found Open Collective, and Open Collective's focus is around crowdfunding, building transparency into organizations... You were motivated to join as a co-founder because of the work you were doing with Democracy Earth, and the different political protocols that you've been putting in place, and how that actually trickles into self-organizing collectives, so to speak... So maybe let's start there for this next segment - what Open Collective truly is to you, and the goals that it has; it's been in place for a couple years now, so you're sort of two years into getting it right. I think when we spoke to you on the Changelog we talked a little bit about this, about just finding your way; you were still discovering what it should be, and I think now you may have a better perspective... So where are you at?
I think that the way we think about collectives - we see them as new human and economic unions; we see the collective as the new economic unit that exists in the world and the community. And the community doesn't fit the assumptions that the financial system has of how organizations operate. Our system thinks of organizations as corporations. Whether they are for-profit or non-profit, it doesn't matter... But corporations are hierarchical organizations, they have a president, they have a command and control structure of sorts, [unintelligible 00:25:17.10] you have to be incorporated somewhere... And the associations of the internet generation are not incorporated anywhere in the world.
We really set out to serve that community, we really set out to serve associations of the internet generation, and we define how open collectives are and should operate. Open collectives are very fluid structures, they are bottom-up, they have core contributors, end contributors, they're transparent by design, they operate in the open, and they need a way to get funding without necessarily having their own legal entity or their bank account, because they don't want to have a president, they don't want to have equity. That's not how they operate.
I think that we really hit a very difficult problem, and the need for Open Collective became very clear for us. We keep seeing different examples and different collectives from different spaces joining, that are not only open source. We discovered the most acute challenges that they face, we're trying to solve them, and the challenges that we face as a company, as an organization, and we set out to solve them, as well.
I think we're in a really good place at the moment, where we've figured out what we're doing, we've figured out who we're doing it for, we've figured out the problems that we face or the challenges that we face, and what we need to focus on now is how do we scale and how do we grow.
So that's where we are at, and we are facing -- I don't wanna say a decision, because we already made it, because it's who we are, but we decided that we wanna grow in a horizontal way or a decentralized way. We do not wanna grow as a classical company that just grows a lot of engineers, or is growing in hiring and staffing. What we want to do is to build Open Collective in a way that anyone can contribute to it, and that different services can be built on Open Collective for the collectives, and that collectives can sell projects, products or services to each other.
We just wanna be the infrastructure on top of which this whole economy for collectives takes place and develops, but we don't necessarily wanna develop all of it ourselves. On the contrary, we really wanna be the foundation, the plumbing, and enable anyone to start building on top of it...
[00:28:03.17] So we think of ourselves a little bit as a browser, that essentially abstracts that operating system, and you operate just on that level. And we want Open Collective to be the browser for all of the collectives, the interactions, and their growth and how they thrive, and to take place without worrying about the government, the operating system, the fiscal sponsorship, the money etc.
That's the hard part, right? If you've got ad-hoc organizations that form around an idea or an interest, or a community, someone's not really that interested in saying "Hey, I will go ahead and form the LLC" and kind of essentially take on all the legal liability, and that means they've gotta deal with taxes... And I'm just making the assumption based upon my experience here in the U.S., because that's where my frame of reference is... But those are a lot of truths for organizations, and what you're doing is allowing them to organize around either -- I think you're now a 501(c)(3)... Is that right? Or what's your status now?
Open Collective is a C-corp, and then it has non-profit organizations that we created, partner organizations. So we have a 501(c)(3) that's a foundation, a 501(c)(6) that is the open source collective that does the fiscal sponsorship for all the open source projects. Then we have Open Collective Europe, and we partner with -- we started seeing people taking on Open Collective hosts and starting Open Collective hosts, so fiscal sponsors in different countries... Open Collective Mexico, Open Collective U.K., Open Collective Brussels, Open Collective Paris... And that's how we wanna grow. All those organizations are not ours, we don't control them. They are like chapters of what we do. It's just people that are interested in the same mission, that wanna join our mission, and the way to do it is by creating a host organization.
For example, Open Collective Paris is the fiscal sponsor themselves of all the collectives in Paris that are around civic tech, that are interested in the civic space, especially [unintelligible 00:30:23.07] So they are the hosts, they manage, they deal with the taxes, they take their fee for doing it, but they do it on the Open Collective platform, because it enables them to do all of these in a transparent way, which they wouldn't be able to do otherwise... Or it would be more cumbersome for them to do otherwise.
Right. So you've got a C-corp that you formed to operate Open Collective, the platform. Then you've got your own 501(c)(3) and 501(c)(6) foundations here to act as fiscal sponsors, so that those organizations [unintelligible 00:30:55.21] without having to do that step, because you're doing it for them, can utilize you as a fiscal sponsor, or bring their own if they have one already.
And then in the other mission you've got, hey, if you wanna be a host in Paris, France, or your home country, Argentina, or somewhere else, someone in those areas can reach out to you and say "Hey, I wanna be a host. Can I be a host?" and then you allow that, and then there are fiscal sponsors available to those people in that particular localized area... So the platform Open Collective acts as this -- sort of a front-end to all these foundations and different legal entities in certain areas to provide the necessary back-end plumbing, right?
[00:31:39.20] Yes, that's exactly right. And even existing organizations, for example, that are not Open Collective dedicated... Women Who Code, for example - they have their own 501(c)(3), but they manage 72 Women Who Code meetups around the world on Open Collective.
TechSoup, for example, is coming on board to manage the NetSquared groups around the world on Open Collective. So it's a way for also existing organizations that replicate very fast in different cities and in different areas, because you know, there's an idea, it replicates very quickly, someone else takes it on, they study it in their own city... So a way of keeping all those ecosystems sustainable and being able to create those larger networks - they use Open Collective to do that.
If someone's listening to this and they're thinking "Okay, it sounds like I can go on here and I can form an organization..." -- or can someone come on there as an individual organization? Let's say I am a community of one... Or at least one so far.
Yeah, absolutely. You can host your own collective yourself. We have, for example, the Django Girls Group in Marseille - it's this girl that's self-hosting her own meetup. Her meetup is not super big, but their budget is small enough that she can host it in her own bank account, because she became the host of her own meetup. It's what they were doing before, right? They were receiving some money from sponsors, they were paying things, they were hiring the venue, but now it's all done in a very transparent way, so that enables more money to flow because there's more clarity about where the money's going and what the money is being spent on... Not only from a sponsor's perspective, but from her own perspective; she's way more comfortable with using her own bank account, because there is no issue with where the money is going. It's very clear what's happening. That enables her to become a host of her own group.
And what I'm trying to get to is that people have choices on how they can organize and sustain, so to speak, whether they're an individual or they're a full-on community that just doesn't -- they wanna have a flattened hierarchy, they don't wanna have any minutiae of sitting up a company... All the things that Open Collective does well. But then you have alternative ways to do that. For somebody who says "Hey, I wanna do this fun thing I do, and I just want people to donate to me. I wanna leave my job and start raising funds." They have choices of where they can go, and I'm curious when someone chooses Open Collective, let's say there's opportunities - Patreon, or other opportunities - how do they make choices and know that Open Collective is for them?
I think that Open Collective has traditionally been more focused on communities and groups, and now the whole transparency aspect of it is very important... That you know where the money is going, and how it's being spent. And then I think that the other very important aspect of Open Collective is that it's easier for companies to give money to projects on Open Collective that are being fiscally sponsored, because they receive an invoice from the other side. If not, they need to give money to a person, and they need to treat them as a contractor, and issue a 1099 for them... And in big companies, it's almost impossible to do that.
It's even a pain in the butt; they just won't even do it.
They won't do it, so we are seeing companies now - this has happened very recently - asking developers to open a collective, because they wanna give them $5,000, but they can't give them $5,000 directly, or on Patreon, or on anything that doesn't have a proper invoice for them to process this internally.
[00:36:01.19] That's true, because you need some sort of entity to send an invoice from, because otherwise it's "Hey, this invoice is from me, Adam Stacoviak. Can you give me some money?" They're gonna say "Well, I can't" because of the legal issues of like 1099, or just the complexity; they'd have to involve certain departments, or whatever. There's just too much red tape.
Exactly. And some companies are like -- it's like dealing with government... [laughs] They have vendors, you have to become a vendor, and do purchasing orders... And God only knows. With Open Collective, the fiscal sponsor takes care of that. It's not that if you receive the money through Open Collective you're not gonna receive a 1099; you are, it's just that the sponsor is not doing it, your fiscal sponsor is.
So the company is not doing it, your fiscal sponsor is.
Right. You're making it easier for someone to give you money without having to be obligated to deal with the legal things, and that's what the fiscal sponsor does.
That's also why that fiscal sponsor has a fee, because there is -- it's not so much to... Maybe in some cases it might be to actually make a little bit of money, or just maybe cover expenses to deal with being a fiscal sponsor, but there's a responsibility on their part to do what they need to do legally which costs money, and that's why there's probably a fee. I'm not sure what the fees are, but there is a fee. People may be surprised, like "Oh, I thought this was free and open..." [laughter] Well, nothing's totally free.
Yeah, and different fiscal sponsors -- we call the fiscal sponsors host organizations... The different host organizations have also different fees. For example, an organization that can mainly provide their collectives with branding may charge a fee; an organization that provides their collective with training might charge another fee, because what they're giving them has a lot more overhead. And it also depends on where they're at.
Open collective has a 5% fee across the board, and then the host organizations that we create and manage have another 5% fee. But it really depends on your host organization.
Yeah, and I'm sure everyone has different rules and details, so it's... It's just part of how things work. So you're two years(ish) or more in - is that right? What's the number?
Almost two and a half.
Okay, so two and a half years into Open Collective, you've been involved pretty much since the start... What are some of the biggest lessons learned in terms of helping collectives organize?
It's harder to spend money than to raise money. We've found that especially in the open source space. We have collectives that have a decent budget, and it's harder for them to decide how they're gonna spend it. We had to help some of the collectives go through the process of figuring out how they wanted to spend the money that they had. We have sponsors that want to give money to collectives, but because the collectives are not spending it, they are not doing it.
There is a lot of money out there for this, and sometimes it's hard for such distributed organizations - especially when this is your craft, your product of love, your passion project - to decide how you're gonna spend that money collectively, not yourself as an individual. I've been working on a couple of features to help in that area, to add transparency to what's okay to expense to a collective and what's not, and things like that. But by far, the most successful collectives are the ones that are spending their funds.
[00:39:53.27] That's kind of like the point, too... One of the reasons why it seems to me that one of the primary drivers of forming the collective on Open Collective is to be able to raise funds... If that's your motivation, you have needs that are gonna cost money, so you need to find ways to raise money to be able to spend money, and the cool thing about Open Collective is that it helps you do that transparently, sending invoices, all of it is available to the whole community and to the general public as well... And you get into a position where like "I've gotta spend some money, but I don't know how to spend it." And on your part, you're trying to create a successful platform... So you've got several problems - you've got the problem of 1) creating the software, which is hard...
Yeah, not fun.
...the community, and then you've got all this work that goes into attracting collectives, and then unless they're actually successful, then you're not successful -- so just growing by one more collective doesn't help you, unless that collective is successful. So you've gotta now put in the work to help them become successful.
We need to help them activate, essentially.
Okay, good term.
So look for money, which is also not trivial, then receive it, and use it. So it's a full cycle. We study and we understand the cycles of a complete collective, an active collective, when they actually did all of these steps: they raised money, they spent it... So that's how you start having functioning, sustainable organizations.
So yeah, you're absolutely right, the challenge is to set the software, the legal and financial aspect of it is also a challenge, payment processors -- it's a software that uses several payment processors, that involves money, which is also a different pain... Because in the world of PayPal, we are all [unintelligible 00:41:57.18] And then once we set the infrastructure up, we reach out to the collectives, they see the value in what we do, they come on board, then they need to activate.
It's quite a process, but we are becoming better at helping them through the whole process, the whole cycle. We are the stage where we have collectives in all these different steps, and we are figuring out and designing features to help them in that whole cycle... Which is great, because now we are seeing the process in its entirety.
What is your focus now? You've become a CEO recently... I checked into some of the things you've done; I think you have this pretty interesting thing - an investor update once a month. The last few have been by your other co-founders, and you did the latest one, at least from what I can tell. I think that's pretty interesting, because while those are sort of focused on investors, it's interesting to see that it's like a "Hey, here's kind of like a heartbeat of how you're operating." You could do a health check by reading up on like the last six months of those, pretty much...
And I love that they're open. For one, that helped me research easily, but two, it just goes back to the model of transparency, for you as well.
And also because that's how we want to grow... We want to have more host organizations, more people doing Open Collective chapters around the world, more developers building features for collectives on Open Collective... So being open and transparent is not only who we are and how we've done everything before, but also we see it as fundamental to the way we want to grow this project. We wouldn't be able to do it otherwise, so it's very important for us.
[00:43:58.27] What is success for you then? When you do a startup - and I'm not sure if you would consider this in traditional terms a startup... It is a C-corp obviously, you do have to be profitable, you do have to pay people, you do have runway, you do have burn, you do have all the other things that go into it... But what is success? Coming from your background and your motivations for this, what do you see as success for Open Collective? What are your goals for that?
For Open Collective as a mission and as a project I see success as really seeing a whole new economy created for the communities. For example, now there are a couple of developers that are working full-time for their collectives... So someone needs to figure out what the benefits are, and how to provide those benefits, right? Someone has to figure out if the communities now are the center of an economy, what services to we sell to that community?
So for me, success is really a new economy where the collectives are the center, where the way to bring ideas into the world is by creating open collectives. That for me is success. You have an idea, you want to test it, you wanna get some people together, you wanna try it out, you wanna build something... The default way of bringing things into the world is Open Collective. That's where I wanna take this.
Obviously, we've seen success around open source, but what other examples can you give to say what that kind of thing into the world is?
We've been seeing a lot of civic tech projects joining Open Collective... I think that probably the most beautiful example is Brussels Together. Brussels Together is an organization in Brussels, and essentially what they did is they realized that every citizen initiative in Brussels was operating in a silo, and they were all going through the same pains... So "Do we need an association? Do we need a foundation? What do we do...?" There wasn't communication and transparency, so Brussels Together decided to become the organization that empowers all of the citizen initiatives in Brussels.
Now they have initiatives like the citizen networks that are working particularly with civic tech projects, but also a project that is dedicated to having more vegan options in Brussels, another one that is lobbying [unintelligible 00:46:38.24] in Brussels, a zero waste initiative... All of those initiatives that they might have not taken place because it was really hard for them to find a structure to do it, and it was really costly for them to have a traditional association or foundation - they are now happening because they are supported on the Brussels together platform. For me, that's beautiful... That's the kind of thing that I want to see happening everywhere in the world.
It kind of reminds me... And maybe this is not a great correlation, but it kind of reminds me of Meetup.com in a way, because the one thing you missed with Meetup.com or something like that kind of model or that direction -- because they have similar goals of helping people organize, but their goals aren't based in transparency and sustainability... They're just allowing people to say "Here's an interest or a topic and a group. Here's when and how they meet." They're only providing the actual structure of a workflow of organizing, not so much the sustainability sides of organizing.
[00:47:52.23] So you seem to have a similar mission, but backed with "Hey, we'll also allow you to be able to have [unintelligible 00:48:00.08] people to donate into, or provide sponsorships, and take money away and have expenses without having to say -- like we said before, have an actual legal entity, which is completely off the record of Meetup; they're not getting involved in that at all.
Yeah, absolutely. I think there's a lot of synergy that we can build there. We have met Scott, the CEO of Meetup... Now they've been acquired by WeWork, which puts them in a very interesting space, because I think that now they don't have to worry too much about money anymore. I talked to Scott a lot about it, and I think it makes sense for us to work together. I'm not sure if they are there yet; I think they're still focusing on bringing people together, not so much on how they can sustain those communities.
Yeah. But I think it's clearly a really nice synergy that we can build. Another very interesting space for me is the crypto space. There's a lot of projects being created, there's a lot of money in this space, and they're all trying to be sustainable by doing ICOs. And not all the projects need an ICO or a token, and there's a lot of public digital infrastructure in that space that still needs to be developed. The crypto ICO business model might not be right for them, nor the VC business model, so I think that becoming collectives -- and that's also what I was talking before, about bringing these ideas into the world, becoming collectives to build these projects that everyone is gonna benefit from. They don't necessarily have a traditional business model, but everyone's interested in seeing them thrive... The collective is a structure for that to happen.
Is there a case where someone, or an organization, or a collective (to just use that word for you) would graduate or evolve from a collective to a C-corp, or a legitimate business? Is that ever a possibility, or do you see that as part of the picture?
We just saw it a couple of days ago. Gatsby was an open source project that was a collective, and now they are a proper startup, with a three million dollar round.
Yeah, it's amazing.
Yeah, I don't think they were graduated... They were a project, they had a collective, they had a little bit of money, and now they -- maybe it helped in the transition, maybe it helped them think that maybe being sustainable was something that they actually wanted.
Yeah, I mean... I used the word "graduate" simply because that's just a graduation, that's just a natural flow, not so much like that's their -- I just think it's interesting that you can have an idea and leverage an utilize something like Open Collective to organize and sustain and raise funds, do it transparently... Do it in a way that's trustworthy to a community and provide a healthy ecosystem of growth until you can make a choice on which direction you should go, like in Gatsby's case, for example. They were probably happy as an open source collective, doing open source work on GitHub, and providing value back to the community, and then at some point they were like "Hey, things have changed. We can now have a new opportunity", but had it not been for the abilities they were given by being a collective, they may not have gotten to the point they're at today... At least sustainability-wise, organizational.
[00:51:55.09] Yeah, totally. I think that the overhead of having an idea and testing it, or starting to build a community and being forced to have a legal entity, and have equity and ownership and hierarchical structures - it pretty much kills your idea. The bar is just simply too high.
Paying taxes on money is not fun. Let's say you didn't fully earn, but you have to act as if you did fully earn it to the IRS, because that's how the basic operations of an LLC is. It's a pass-through to the owners of it, so even if you're leaving that money in the bank account, you're gonna see it on your tax bill at the end of the year. So it's like "I don't wanna deal with that!"
Yeah, and not even going that far... Even having to talk to lawyers and accountants. I mean, I don't have anything against lawyers and accountants. Well, maybe a little bit--
Maybe a little bit... That's a different podcast.
Exactly. But it's really hard to argue that that's where these projects need to put the focus. It's a non-starter for many of them. So you start your collective, you get some traction, you get a little bit of money, you get a community together, you start doing whatever it is that you wanna do, and if you wanna take it up to the next level, then that's amazing. Pay it forward. I e-mailed the Gatsby guys and I said, "Great! So how are we gonna support your dependencies now?" [laughs]
Right...? So I think that's right, it's like a -- I don't wanna say a kickstarter because the name is taken, but it is a little like kickstarting a community that is sustainable, and then taking it to a next level whenever you're ready. And maybe not. Maybe you're always gonna be a collective, and you're gonna be a very successful collective, like Webpack is... And now Babel is taking more and more contributions, and it's growing, and now Henry is open source full-time... I think there's a great opportunity there for all of the Babel team to grow their collective. It's happening, I'm seeing it, and it makes me very happy.
I'm gonna drop an earmark here for the listeners too, because we talked about Gatsby, and we do have plans to talk to Jason... I'm not sure how you say his last name, so I'll just leave that off, but I think he's the person who started Gatsby, so we're talking to him on the Changelog later... I think it should air sometime in July, so just heads up on that if you're listening to this and you wanna catch up on the details of Gatsby and what it is technology-wise. We'll probably talk a bit about their path too, sustainability, and ultimately going into a company, too... So earmark that.
We only have a few more minutes left, but I did wanna talk a bit about revenue... And not so much to the fact that like "Hey, how much money do you make?", but mostly around the pains of finding investors, dealing with runway, dealing with burn, hiring people, giving them autonomy to do well, but at the same time still focus on the mission of the company, so that you can actually have more revenue coming in... Can we talk a bit about some of the numbers there? I'm kind of keying off of -- I believe the way you pronounce his name is Xavier, right?
I think it was the February update he mentioned -- and I'm just gonna use this number, because it's a good, round number, it's easy enough... 100k in donations, and you all have a 5% cut of that to operate the platform, so that's roughly 5k in revenue per month. Is that the only source of revenue for Open Collective to operate on?
Yes, we have investors.
You have investors, but...
You don't need to have revenue, yeah.
Yeah, so we need to grow, I would say, at least 10x before we run out of money. We're growing nicely; that number now is up 150k already a month; at this growth, we're not nearly where we want to be, but we're making progress.
[00:56:23.04] For us, there's a couple of different things that we look at. We have a very [unintelligible 00:56:28.11] still, so we are not super-focused on the numbers. We do obviously want to increase the volume of funding that goes through the platform, that's our main goal, but for us it's also important the way we do it.
To do it in healthy ways, not just simply for the sake of money through the system.
Ways that money can actually be used.
Yes, and we're also focused on trying to grow as healthy as possible. If you have a few very large sponsors, you are in a more vulnerable position than if you have a large mold of many smaller backers. So we are trying to work out that sweet spot between companies that are really interested in giving donations, and taking those donations and building for them, but at the same time also making sure that we are building for smaller backers... At the end of the day, they are the stronger mold, the stronger network that we can have, right? It's more dependable for our collectives.
So we focus on both things. We're not strongly looking at the numbers; we are looking at also how many donations we have, how many subscriptions cancel, how many collectives activate... Those are the metrics that we are more interested in. Yeah, that's kind of how we analyze the growth of the company.
Another interesting thing about Open Collective is that we took a 10-year vesting, which is not normal or average for a startup. For us, it was very clear -- we wanted to give a very strong signal to our investors and to our community that we're in this for the long run. We're not building fast, and then [unintelligible 00:58:35.26] This is a project that is our life's project. We love it, and that's why it was very important for us to give that signal, so we decided to take a really long vesting (a 10-year vesting).
That basically means that your equity isn't fully owned or realized until 10 years?
And then for us, raising money was a conversation. A lot of backwards and forwards about how much we wanted to raise, and if we wanted to raise, and how we could do these and support ourselves in a different way, and we played with the idea of doing an ICO for a very long time, for sort of like an Open Collective coin, we could do a crowdsale...
Taking money from investors wasn't our default mode; it wasn't just the thing that everyone does so we went ahead and did it. It was a process that we suffered through, from a decision perspective... And we were very lucky in that... And I guess it also has to do with who we are and how we think of ourselves, but the investors that we have are very much aligned with what we do and the way we do things. And we were also very careful to make sure that we filled the round with as many entrepreneurs and founders as possible. For us, that was also very important.
[01:00:11.14] You mentioned that you need to 10x to survive... I can't recall if you used the word 'survive' or not... Does that ring a bell to you, survive? Would you classify it as that?
I would say -- yeah, just sustainability.
The point is that you've gotta get revenue coming in. I mean, it's great to have all these altruistic goals, help communities, new economy... But that doesn't work unless you can get some of the systems right, and I'm talking about where you're investing in terms of like how you're investing in the current 650+ collectives that are on the platform, how you're helping them be more optimized for their own personal growth... Because, obviously, if they grow, then you grow. But the point is that the key metric that you're pushing is growth in donations.
Right now, 150k (a couple months back 100k) - you need to 10x that. That means roughly a million dollars a month to hit the goal that you've gotta get to. How are you gonna get there?
That's kind of the big question, how do we get there? And for us, that question has to do with "How do we grow?" You can get there by building faster features, and growing your team, and thinking of a Salesforce to sell, get more sponsors, and go to companies and do enterprise sales to get donations, or sell support contracts for the collectives etc. That's one path that we are not very fond of.
I think that the way we want to grow and how we get there is by scaling horizontally, by enabling more hosts to bring onboard their own communities, so we have an exponential effect. One host that brings a whole ecosystem... Just to give you an example now - with the NetSquared network, it took them about a year for TechSoup to come on board, but now that they're here, they have a massive network that they wanna start bringing on to Open Collective.
The .NET Foundation is another example. The .NET Foundation started very small on Open Collective, but as soon as they get comfortable with it and they start bringing on their user groups, you're talking about thousands of new contributors and groups and collectives from their own ecosystems. So how we want to grow - we want to grow like that; we wanna get there by enabling more organizations to bring their own ecosystems, by enabling people around the world to create Open Collective chapters for their own countries, for their own cities. That's how we grow, that's how we get there, by growing a network, not by growing a company.
That's really interesting... I'm sitting here nodding as you're saying it, because we talked about that earlier, and I didn't quite see what you were talking about in terms of horizontal growth. But it totally makes sense, because -- I'll just give you some initial validation that's a good direction to go, because that's probably the direction I would go if I were doing it... It's that essentially you're just replicating yourself. You have the goal as you've had, as Open Collective, to enable organizations and communities, but what you're doing is you're now allowing other Open Collective-like entities to do that same thing, and use Open Collective as the platform to do so.
And they've already got the networks and relationships and all that stuff, and all the trust; you don't have to go and do all that work, you just say "Hey, trust us as a platform, and we'll go together."
[01:03:52.05] And we are transparent, and open source, and our investors updates are published monthly, so trusting us as a platform is easier because of who we are and how we operate. For us, that's very important. And yeah, absolutely, it's about providing the planning for anyone to be a host, for anyone to be an organization, for anyone to bring their own networks here, to manage that in a transparent way, in a horizontal way, in a very bottom-up way... And that's how we're gonna grow.
When we choose, we have very limited engineering resources, and when we choose how we spend them, how we use them, we want to use them to build Open Collective in a way that anyone can build an Open Collective app... So an app for collectives, right? Figuring out the type of API that we can build, so anyone can kind of build plugins for their collectives. And maybe someone who wants to build an app network, for example, for collectives... One that doesn't have any third parties; they just create a network and they offer the collectives -- they pair the collectives with companies that they know, and they build that into the whole Open Collective. That's what we want to do. We want to enable [unintelligible 01:05:16.01] to happen. That's how we get there.
And obviously, the platform itself being open source is a pretty key component to that, because if it wasn't, then it might be a little harder for you to onboard contributors, or just general interest of people who wanna just help, that they can now see the codebase, they can get involved, they can play a part, essentially, in building the platform.
Yeah, absolutely. It's not only about being open source, it's about being open source and open to contributions.
Super key, yeah. There's a big difference there. "You can see my code, but you can't contribute" - that's way different.
Exactly. The API is, like, nothing.
So we need to invest time and resources into building Open Collective in a way that is open to contributions, and we are investing there. Our path to growth has to do with that also.
You've got a lot of work to do.
I can just see not so much how small you are, I can see the size you are and all the different directions you can go, so I can see how - you said earlier as a mother you've got no time for BS; that becomes even more clear when you add being a mother, as well as being a CEO of this. You've got zero time to do any BS-ing, because you've gotta focus.
Yeah, absolutely. That is the best challenge ever. I thrive on things like these, because I love what we do. Making the things that we love into just plain, old corporations for me is not an option... That's how I feel our collectives feel, also. Community feels like that - they don't want to build corporations for what they do, for what they love, and providing them with an alternative is an amazing feeling.
We're getting close on -- we're actually over time by a little bit, but that's okay... But I wanna give you a chance to share anything I may not have asked you. If you were like "Hey, I really was hoping Adam would ask me about this..." Is there anything like that that I may have missed that you wanna share?
No, I think we covered pretty much everything, really.
Let me see if I can ask you this other curveball question then, which I did not prepare you for... But it could be easy to answer, or it could not be. You don't have to answer it. It goes something like this - what is something super secret, something on the horizon for either you or Open Collective, that's coming up that no one knows about, that you can share here on the show.
We have Sustain Open Source 2018 coming in October, and it's our event that we talk about sustaining open source, and what it looks like, and how we can do it. I really want to invite everyone to join that. Changelog is a big part of it; we forgot to talk about Sustain... So in October, Sustain is gonna happen in London, U.K., on the 25th of October.
[01:08:20.02] Nice. The website to go to is SustainOSS.org, and October 25th, 2018 in London, U.K. Does this cost money? What tickets are available?
Tickets are not available yet, but you can sign up on the...
You can join the lsit.
You can join the list.
The tickets are gonna cost -- last year they cost $50, so I'm pretty sure we're gonna keep the same rate... But there are also sponsorships for the tickets, and a travel fund. For companies out there, if you wanna support Sustain, this conversation about open source sustainability, there's already a way to support the travel fund and the scholarship fund... And also childcare fund, obviously.
I'm glad to mention that, because I had that in my notes, but I didn't mention it; I was gonna ask you about Sustain. We were there in San Francisco last year, and we were looking forward to playing a part, but it's hard for us to go across the ocean for things. We've got several things happening this year, so we're gonna miss (I think) this year... But I'm sure there's gonna be somebody there that we can have represent us, from at least Changelog's perspective.
It's been a blast to be a part of that, too. That first one at GitHub HQ was just very small, very intimate... It was just the right kind of recipe. You couldn't have done a better job; it was absolutely perfect as the first version.
It was the beginning of something, right? It was a kind of kernel there... It was great, I had a blast.
A one-day event for open source sustainers. No keynotes, no talks, no slides... Just good community, intimate discussion, deep dives, break-out sessions... That was a lot of fun.
Alright, Pia, thank you so much for joining me here today. It was a pleasure to dive into your history. Thank you for sharing parts about your past too, and areas that may be vulnerable to you. I really appreciate you sharing where you've been, the lessons you've learned, and what you're doing with Open Collective. Thank you so much.
Thank you for having me. It was a great way to end my week.
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