5 ms·

Ask HN: How can you keep a non-evil company on track?

22 points by Vivtek 10y ago

Here's a bit of a "corporate charter hacking" question. If you're founding a company in order to effect social good - some specific purpose that goes beyond shareholder value, that is - is there any way of being reasonably sure it will continue to fulfill its purpose after you've retired? There are organizations that have stayed true to purpose for long periods of time (the ACLU comes to mind) but if the intent is also to make a profit, I've heard of too many companies that lose track of the purpose of social benefit in pursuit of the profit. Is this a circle that can't be squared? What mechanisms are already out there? I'm not even sure where to start.

df3 10y ago
You might want to look into creating a benefit corporation, which is essentially a for-profit entity with goals beyond maximizing shareholder value: http://benefitcorp.net/faq http://benefitcorp.net/faq In terms of making sure the company stays true to your purpose, that's what board seats and voting shares are for. Beyond that part of entrepreneurship, and working with others in general, is accepting that we won't always get what we want. You might have to accept that your company at some point focuses more on profit than you'd prefer.
- Vivtek 10y ago
  Yeah, the public benefit company is already something we're looking at - Kickstarter is one. And the knowledge that we don't control our children is also something we're looking at, on a philosophical level. To be honest, I keep thinking about Charlie Stross and his corporate charters written in Python, then reminding myself that is not yet a practicable plan.
tpaschalis 10y ago
All companies with human shareholders will work to maximize profits, be it short- or long-term. If you can provide the environment where any 'evilness' will actually work against bigger profit, then the shareholders will try to make sure this doesn't happen.
- valuearb 10y ago
  Profits are proof of societal benefit. The ability to make something customers value at greater than it's cost of creation is the definition of the creation of value.
  - Vivtek 10y ago
    Have you read Brian Alexander's Glass House yet, about how private equity profit was not creating value for Lancaster, Ohio? I encourage it, especially if you're from the Midwest. It's more than a bit confusing from the timeline perspective, but illuminating.
sova 10y ago
Training seven or more people to "carry the baton of culture" once core leadership is gone. Making sure they keep their kinetic cultural fire going, so-to-speak. That and getting more artists into the mix. Also, having a good corporate slogan can help. I think if your company contributes knowingly to the greater good, and you make that a core foundation of your company culture, it can last far beyond one person's contributions.
Nomentatus 10y ago
The nature of human beings, who are able to convince themselves they are doing good while in fact being quite destructive - means you can't set up something great and good that will last forever, with any mechanisms. I think the Cooper Union scandal shows this well enough. Still, Cooper Union lasted a long time in roughly its original form, before our corrupt generation took it down. That much you can hope for. http://fusion.net/story/192436/cooper-union-endowment-tragedy-betrayed-legacy/ http://fusion.net/story/192436/cooper-union-endowment-traged...
- Vivtek 10y ago
  This is exactly the kind of situation it would be nice to avoid. It's probably impossible. I'll keep thinking. This is the kind of thing I was looking for, though - thanks!
  - Nomentatus 10y ago
    I too will keep thinking on this, hoping to come up with a better mousetrap. Let us know if you come up with a better mousetrap.
darpa_escapee 10y ago
As long as the profit motive incentivizes bad things, you probably won't be able to escape it.
- Vivtek 10y ago
  True. Very true. I'm more concerned about profit to top management outweighing profit to the company, though. Or more accurately, I'm thinking about two different situations here - one is a startup a friend is founding; he wants to keep it true to purpose. The other is a company I plan to found in the future; I intend to make sure it provides economic stability to the community for the long term. To be honest, I keep conflating these two goals, but they're not the same; they just fall into the same kind of ballpark, which is: how do you guard against poor judgment on the part of top management? And the answer is: you can't, not perfectly. Because if you could, they wouldn't be top management.
  - darpa_escapee 10y ago
    Maybe a for-profit company isn't the structure you want to establish towards that goal. Such an entity is going to have inherent incentives to generate and increase profits through any means, good or bad. Management will have to bow to those needs and they'll have their own profit motive to do so. It would take a miracle of human nature to make sure the company behaves in a 'non-evil' manner to that end in every situation for all of time.
    - Vivtek 10y ago
      "All of time" is maybe overstating my ambition, and "non-evil" was not the best choice of title. You're not wrong, though.
sprafa 10y ago
Look into Toyota
- Vivtek 10y ago
  Toyota is not at all a bad model!
itamarst 10y ago
Might want to read http://zebrasunite.com/ http://zebrasunite.com/
- Vivtek 10y ago
  Ah - thank you! (edit) More than thank you - thank you! (Now that I've read it.)
AdamSC1 10y ago
You're asking a question about how your company should continue on in its legacy when you haven't even started it yet. Just get started. Over the span of your working lifetime the approaches to this are going to change a great deal, and you can always change your approach later on. But, at the end of the day start a private company so you eliminate the concern of being pushed towards maximizing profit. If later you need to take on investment, take on small minority investments from groups that truly believe in the same goals you do. If the company is mostly kept in your control, then when you decide to retire you can appoint a replacement who truly holds the same values you do and allow it to continue in that vein. Doing good and making money are not mutually exclusive. The problem becomes when companies aggressively try to maximize their returns by sacrificing their product or their users. A modern corporation is kind of pushed this way especially after IPOs or in situations of minority control - but, if the individual at the helm and those invested in the product truly believe in the mission then it is easy to meet the standards of fiduciary duty (https://www.law.cornell.edu/wex/fiduciary_duty https://www.law.cornell.edu/wex/fiduciary_duty) whilst remaining true to a social good mission. I'm fortunate to work at a company where members of our team strongly believe in our mission, and so does our CEO and investors. I think if that runs through the veins of your company it will be fine long term. You just need to ask yourself, would this person I am hiring sell out value X for $Y - as long as the answer is no then you're good to go. So: Step 1: Actually start your business. Stop worrying and dive in. Step 2: Do social good, start to make some money. Step 3: Hire people with as much belief in the mission as you have. Step 4: Retain as much private control of the company as possible, or seek investors who believe deeply in your mission. Step 5: Do more social good - because we need more of that in the world!
- Vivtek 10y ago
  But what would the world be without carts before horses? No, but seriously - this isn't (entirely) a delaying tactic before diving in, this is me actually getting to the point where I will soon be diving in, and wanting to feel more competent about what it means to have a company that's more than just me. I've put a lot of thought into how to solve my technical problems, because that's what I do - but soon, like within three years, I'm going to be in the position to make decisions that will affect human beings who aren't my family. I'd like to think I have the competence to do that right. But I don't. Fortunately, I still have some technical problems to work out before I can make a credible start on the business per se! So I can kick that can down the road a little, and hopefully read and think some more about these things that worry me.
dbrunton 10y ago
You can do it! Have a mission. Imagine a kid dribbling a basketball along the baseline, while staring intently out-of-bounds. "What are you doing, kid?" "Making sure I don't go over the line!" Coach tells the kid to focus instead on moving toward the goal. It's definitely possible to do well while doing good, but in order for that to happen, you really need to focus on what the good is, not on not-evil. It may require a suspension of your belief that the two are in tension; Kierkegaard might call this a "teleological suspension of the ethical." I think a great example of this is news organizations (there is also a warning there, I suppose). The focus isn't "maximize shareholder value while hopefully not forgetting about news" (well, again, a warning). The focus is "truth at all costs" and the profit is a thing that inevitably happens by running it as a business.
- Vivtek 10y ago
  See, now this is the kind of thing I want. No discussion is really a true discussion until you get to Kierkegaard. What concerns me is that profit is not assured by the "truth at all costs" DNA. You need a plan to make sure your family gets to eat and go to college. Some middle ground is necessary.
  - dbrunton 10y ago
    Yeah! Kierkegaard! I agree with your point, even though I wouldn't call it a middle ground. I think, "make as much money as you can without being evil" is, maybe a middle ground. I think, "make money while doing a particular, real good in the world" is not- it's a thing that actually happens in the world we live in. Maybe the news example is a little of a red herring (both an example and a counter-example in one).
herbst 10y ago
Not taking external funding is a good start imo
- Vivtek 10y ago
  Yes. Actually a very good point.
Mz 10y ago
I happen to have tripped across this yesterday and you might find it pertinent: http://redf.org http://redf.org But I will suggest that you also reconsider your view that business is inherently evil or inherently prone to evil. Historically, some of our most civilized civilizations, like Persia and Greece, revered the honey bee. The honey bee is a metaphor or mental model for trade. The bee benefits the flowers without harming them and it also benefits from the flowers. Trade is a civilizing force. Yes, trade can be done badly and people can be exploited. But that isn't something inherent to trade per se. At its core, good business benefits both sides. That's why customers will pay you. I am a woman and former homemaker and former bleeding heart idealist who used to do a lot of volunteer work. I have thought a lot about not for profit vs for profit organizations and I do not believe not for profits are inherently better. In fact, many of them require people to first be "losers" and also self identify that way in order to get assistance. This inherently tends to go bad places. I have been homeless for over five years. I have seen how easily charity can go bad places. The longer I have been on the street, the more I have looked for market based solutions. The food at an eatery is better quality, thus healthier, than the food at a soup kitchen and there are government controls insisting on cleanliness, etc of the establishment. It is a vastly superior way to feed people. I also would rather earn an income than seek charity. It is a better experience, it gives me more agency and it has a more positive impact on my life. There are ways to do charity well and there are forms of charity that I am happy to receive and that I think are fundamentally healthy things. But a lot of charitable organizations strike me as a cancer upon society that the world would be better off without. I will also suggest you read up on Deere. I wrote about it here, but should probably update it some time: http://micheleincalifornia.blogspot.com/2014/04/lemon-meringue-pie-is-better-than-sour.html http://micheleincalifornia.blogspot.com/2014/04/lemon-mering... The pertinent section says: So here is a bit of history of some "PR" done right. According to the history section of the John Deere site: 1933 Business is almost at a standstill. Sales plunge to $8.7 million. Though it is losing money, the company decides to carry debtor farmers as long as necessary, greatly strengthening farmer loyalty. As I understand it, John Deere was the only tractor company that made that choice during The Great Depression. Other companies repossessed the tractors when farmers could not pay. This really did them no good because there was no market for them. It really did not recoup them much, if anything, and it burned the farmers when life was at it's toughest. The mild statement above about "strengthening farmer loyalty" does not give the same impression that I got from some article elsewhere. According to the article I read, for decades after The Great Depression, if you were a salesman for another tractor company and you saw a John Deere on the property, you might as well keep driving and not bother to stop and make a sales pitch because John Deere had that family's undying loyalty for generations to come.

Vivtek 10y ago
It's precisely that attitude embodied in Deere in the 1930's that I aim to get back to - I'm from Indiana farm country myself, though, and I can tell you that Deere is no longer that benefactor. Nor are the many other once-community-minded companies that used to employ the heartland. As a freelancer myself, I certainly don't think that business is inherently evil. I do, however, think that today's insistence on shareholder returns to the exclusion of all other principles (up to and including stewardship of long-term value) is hollowing us out from the inside. Find me a large American company who would ever do the kind of long-term thinking Deere exhibited in the 30's. There aren't any. Charity is not at all what I'm talking about. Charity is good for what it's good for - but it can't keep a society afloat for the long term. Only a healthy business ecology can do that. Long-term prosperity is the only possible goal, and it can't be done with handouts or noblesse oblige. I currently live in Puerto Rico. We have a lot of problems here - problems that are deep and long-lasting - but I think they can be solved with a business model that focuses on long-term stability even if short-term profit will be lower. And it will be. I really need to write some kind of long-form coherent presentation of what I'm talking about in Puerto Rico, but frankly I'm still learning a lot of basic things about the economic situation here that have a direct bearing on how I see the future. So I'm not ready yet. But thanks for your input! This is very useful.
- Mz 10y ago
  I actually have done some recent reading on developments in Puerto Rico. I gathered some of that here: http://www.metafilter.com/162634/Salud http://www.metafilter.com/162634/Salud Maybe that will help you do a long form write up on Puerto Rico. Best.
  - Vivtek 10y ago
    You know who's actually doing the most for sustainable local agriculture here? Walmart. It just plain freaks me out. But they have an angel fund to support local farmers, and preferentially deal with them. They're the only chain I know of where you can get bagged coffee that's not produced by a Coca-Cola subsidiary. Thanks for the link! MeFi FTW!
    - Mz 10y ago
      I am actually a fan of Walmart. I respectfully suggest that Walmart is a good example of good business that is not evil, in spite of how much people talk trash about it. I suggest it is good food for thought that, no, not everything has completely gone to hell, in spite of how easy it is to feel that way thanks to the 24 hour news cycle where "news" is always bad news, basically.
      - Vivtek 10y ago
        Walmart has done incredible damage to the local economies of the Midwest - they've essentially eliminated small retailers over much of the country. It's true that they're simply part of an existing larger trend - but they've profited hugely from it and have cut a lot of ethical corners in making one family the richest people in the world. Walmart Puerto Rico is a wholly-owned subsidiary. Here, they've done less damage (there wasn't as much damage to be done) and they've done positive good.
        Mz 10y ago
        Eh, I see it differently. I think Walmart gets blamed for those trends and no one thinks about what the world would look like with those same trends and no one like Walmart to serve certain purposes. There are 7 or 8 billion people globally and in my lifetime we went from being mostly agrarian to having more than half of all people living in cities. These are unprecedented global changes. We have nothing to compare them to. And people keep bellyaching about overpopulation and global warming and THE SKY IS FALLING, meanwhile, people are living longer...etc. I fundamentally don't agree with some of the assumptions behind accusations that Walmart is evil and predatory. That doesn't mean they are a white knight or have room for improvement, mind you. Best.