Business Plan

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So you say you want a business plan, eh? Perhaps the monocled agents of commercialism are banging at your door? Quietly mentioning potential liability or other such legal "entanglements", etc, etc.?

Hackerspace Movement: A Plan for a New Economy and Great Society[edit]

author: @Xer0Dynamite, 1997, 2001, 2015

The overarching goal of the hacker and makerspace initiatives are to create a better word by fixing the failures of the old pyramidal model of [current] industrialism which focused on control and dominance and, ultimately, replacing it with something sustainable, less mediocre, and more human. Current capitalism is like an addict who doesn't want to admit that they have a problem -- no matter how much you say how unhealthy their behaviors are, they refuse to give up.

While the initial focus will be to create a sanctuary for those casualties of the existing economy (including various artists, misfits, and malcontents) and an incubator for the recent generations poorly served by it, the best wisdom from industry itself suggests that radical lifestyle changes will be necessary within the decade, pushed by practical and environmental concerns related to Peak Oil, Peak Energy, and the predicted planetary transitions expected given our stages of human development and expansion. Done correctly, lifestyles will improve as prior excesses from the old paradigm gets churned and redeemed into new value for the Creative Economy, allowing resources to get (re-)allocated where they can make the most benefit for the community. This effort extends the efforts of generations past (like the communes of the 60’s) by integrating maximal participation rather than “tuning in and dropping out.”

The movement has a lot of interest world-wide. It doesn’t belong to anybody no matter who may try to co-opt or possess it. It's not structured as like the old monolithic businesses (with a president and all their underlings), it's a socio-economic revolution: providing an interesting, safe space where high-schoolers and general community members can make economic value together. They might even meet to play Dungeons & Dragons.

Privately, the scope of the movement will require changes to the entire commercial banking sector, away from merely securing deposits and towards new wealth generation by pairing innovators with hard-to-acquire (or otherwise expensive) tools placed in creative and functional real estate. Ultimately, creative social encounters should have outlets involving raw materials and technical know-how on-hand. Further, the public sector will have to be regrouped to address former missteps taken with the building of America and the apathy garnered by decades of misuse of the Law. For the academic sector, new bridges will have to be built to repair some of the historical detachment from the world. This is an arena where the players have not yet come to the fore to acknowledge the need to be engaged.

If you're in the business sector, see the Executive Summary. All else, it’s going to be a r(EVOL)ution. That spells LOVE.

Hackerspace plan:[edit]

Customers: 1) creative high-school students with time on their hands, 2) college students looking for a good space to build, 3) craftsmen/women of various trades that otherwise don't have access to major tools, and 4) artists/misfits of various types that have been cast aside from the existing economic system.

The basic plan is to create an economic sanctuary for the Creative Classes (the hackerspace aspect) and start building a new, innovative industrialism that can link with existing mechanically-inclined individuals from the community (makerspace aspect), bridging high school education with post-secondary education and with the industrial economic system (that is, a virtuous circle for all three groups to benefit). The main feature of these centers is it's decentralization: there's no "boss" telling people what to do: people become members, learn from each other, and participate in the community creating new value in the process.

This initiative is designed to be paired with hackerlofts and new living co-operatives to form the basis for radical lifestyle changes and to showcase best practices for creating a transformed society which simultaneously is both post- and neo-industrial. Hackers and makers generally require just minimalist accommodations to provide the focus towards the many improvements to the existing technological, industrial, and urban infrastructure that will be required and available as opportunities. The initial outlay and risk is small.

Basic ideas for hackerspaces can be seen with the link given, but focus here is on hardware, software or craft projects that take less than a month (or less than $500) and events (teach-ins, demos, music) that bring the community together. Projects here could be pre-cut kits taken from MAKE Magazine, for example. Makerspaces, on the other hand, have bigger needs and bigger liability. There, rather than soldering irons, you have heavy machine tools and high voltages. Here, one must have a professional.

To ensure success in the decentralized community of the hackerspace, this initiative includes use of a technology called the Pangaia World Game. The name derives from the hippy Gaia Hypothesis of James Lovelock who conceived of the Earth as a living (self-organizing) organism and Buckminster Fuller who conceived the concept of a world peace game -- a systems-based approach where everyone would participate in fixing the world’s social and economic problems. In this case, we're solving the problem of organizing hundreds of independent individuals -- not an easy task.

The World Game is a low-tech catalyzer on a simple cork-board to link ideas with people and resources. It fosters a space`s "organizational memory" to showcase what people are engaged in and allows asynchronous conversations for the many people who move in and out. The Game addresses the perpetual problem of tension between order and disorder, between organization and spontaneity. It also exploits the power of Reed's Law -- the ability to create 2n exponential scaling by providing not only the geometric n2 value that is formed by linking people together, but the additional multiplier gained from the ability to create arbitrary groupings. Such technology has the capacity to transform society in a matter of a decade rather than centuries. Believe it. Purpose: fix the underserved, transform society towards sustainability, teach the high-tech methods that are now available to the masses, and empower people to take control of their government. And there's a lot to organize: events, projects, teach-ins, and RPG-nights.

Organizational Model:[edit]

Whether the space is underwritten by the banks/investors or powered by the community and philanthropists, hackerspaces thrive with maximum freedom, but also can lose energy and dissipate funding without some guidance. The Pangaia Game is designed to channel this energy into useful projects and highlight qualified mentors and willing volunteers for every need of the hackerspace. Nonetheless, a final power should be established on whose shoulders responsibility rests.

A Statement of Purpose should be written to establish the legal relationship of the space with regard to liability, use of funds (for-profit vs. non-profit), and possible tax status. Liability should not be too-highly emphasized except for minors as the basis of American Law establishes a country of individuals who must watch out for themselves (despite the many failings of the legal establishment in holding up this truth). It's important to establish this Statement if you're going to work with a group, as it forms the core DNA in which to establish a basis of discussion and legitamacy. If one is not present, you probably shouldn’t establish a space, because eventually issues of either money or liability will arise and without establishing a sane and decent Statement of Purpose, you won't have much basis in which to argue.

All the people who help craft this core "DNA" are automatically Founders. In the cases of a space receiving Public funds (i.e. from the government) or Corporate/Bank sponsorship, an opportunity to create a Board of Directors may be desireable (presuming they accept or help the original Founders recraft the Statement of Purpose) and may be necessary in order to create the relationship with your funding sources. In such case, control should not exceed 50%, as it is not a kind of organization that can be lead from above without a clear visionary. Save that for the Game.

UPDATE: One possibility is to sell shares to create the hackerspace, allowing all assets to be owned by shareholders, but 51% of the votes belong to Founding members as above.

Scaling up a Vision:[edit]

The goal is to accelerate a great transition and make a Creative Economy, but it can all start with a small effort.

For the following table, the left column signifies the approximate monthly investment or commitment (per a given degree of magnitude) for creating the level of engagement which should promote the next level organically and automatically as the demand and interest from the community increases. Consider using cryptocurrencys for holding transactions. So starting from the beginning:

  • $10/month Notice of Incorporation: Written document informing any interested parties your intentions; business cards to help people feel like they’re part of something great, giving links to your domain, and helping them to co-create the next level of engagement.
  • $100/month Digital Presence: Domain name, web page, discussion groups giving concepts behind the space, mailing list to start acquiring member interest and communication of ideas and possible space locations, perhaps a dedicated linux server and static IP address.
  • $1K/month Hackerspace: Basic Physical Presence. This level has ability to create hobby and community projects with team members talking about possible large-scale projects and establish residential lofts. Non-profit level that should engage with the education sector.
  • $10K/month Makerspace. Add industrial equipment and high-voltage service. Tools for woodwork, metalwork, papermaking, textiles, and perhaps plasticswork. Has the ability to create products. Meet with public officials, chamber of commerce, commercial banks. Spin off a co-working B Corporation.
  • $100K/month Industrial Shop. Add milling machines, steel forge, metal supplies. Has ability to create new automobile designs. Start interfacing with corporate sector.
  • $1M/month Global Domination: space-faring scenario, every city engaged and interlinked. American karma and history resolved to create the 21st century economy: Neo-industrialism.

This roadmap can be started NOW and be executed across many cities simultaneously, scaling up to a billion people within 1-5 years. It is expected that a post-industrial society and lifestyle happen concurrent to these developments: establishing food sovereignty with permaculture and community gardens, transportation and housing co-ops, urban architecture and redesign, new levels of civic engagement as tools get developed in the hackerspaces.

Revenue and Funding Model:[edit]

Four sources: 1) memberships, 2) patrons, 3) events (house keeps 50% of gross revenue), and 4) retail of items made by members (revenue from selling self space).

Community, of course, is important, but meeting expenses is equally so. First-year funding can be as low as $50K and initial space need only be about 2000 sq ft, preferably located in warm climate, near cultural centers, including universities, coffee shops, or downtown areas. Given the right conditions, the hackerloft living quarters can be acquired simultaneously and should be co-located, otherwise it will have to remain an item “on the stack”. With the partnership of banks, they could acquire and host the assets for spaces where a clear leader has emerged.

Absent a major contributor or philanthropic angel, the initial aim will be for the initial expenses to be supplied by memberships and patrons. The other portion will come later from retail sales and events hosted in the space. The house keeps 50% of all proceeds from events hosted by members and sells shelf space rather than earn commissions on sales. So members can sell things and keep all proceeds, minus a reasonable monthly shelf-fee based on size of item. Note that memberships don’t prevent other people from hanging out (over age 18) or participating as long as they’re with a member who is accepting responsibility for them.

Besides the significant revenue source, memberships give the advantage of quantifying interest of all those who walk in the door and can encourage greater participation if done right. In addition, memberships can give concreteness to liability issues as well as create opportunities with other like-minded “co-operators” (coffee houses could give discounts to members, for example). As a rough example for revenue, 50 people at an average of $80/month gives $4K/month of low-overhead revenue.

Kickstarter has proven that tiered participation equals more participation. Tiered monthly membership structure:

  • $5, Member: Cool card, free access to space whenever it’s open, free wifi, email address.
  • $25, Hacker: Adds use of house computers, Linux account, and small storage locker.
  • $125, Maker: Adds use of machines for steel, wood, plastic, bigger storage.
  • $500, Crew: Gets access code for the space(?), large locker or bunk at the loft.

Additionally, there are non-builder, annual supporter levels for those who believe in the mission (aka "patrons"):

  • $2,500, Patron. Gets acknowledged on website and any publications.
  • $10,000, Shareholder. As above and bi-annual shareholder update.
  • $50K, Sponsor. As above with placard or other visible logo at the space. Can receive updates as desired.
  • $250K, Board member. Can sit on the board and guide the movement’s development (such members not to exceed 50% of organizational control).
  • $1M+, Angel who wants to change the world. Talk to us directly.

A free “day pass” could be considered for those who want to try-out the space, engage community members, and get comfortable. Such pass should have contact info, wifi password (applicable in spaces without good network admin support), and during initial period can act as a coupon good for $3 off initial, base membership. If people aren’t willing or able to pay $2 for a month’s worth of access to the space, it probably isn’t for them.

For starving artists, an "art and project fund" should be made to co-pay the desired membership level as long as they are willing to pay the prior (lower) membership cost, for 1 to 6 months. If they aren’t able to do that, then they should find a sponsor to fill that next interval of membership (so someone who can only pay $5/month for a $125/month membership gets $100/month from the art and project fund, and then $20/month from their additional sponsor, paying only the remaining, basic $5/month fee).

Historical Inspiration[edit]

The hackerspace pathos could be said to borne out of places like the MIT Media Lab (and other, older groups), Homebrew Computer Club, Chaos Computer Club, phreakers and hackers of the past, and the HAM radio enthusiasts who dreamed up the idea of freely communicating to people far, far away a long time ago.

This concludes the essay: Purpose, layout, tools, revenue sources, customers, historical context and highfalutin’ ideas, including global domination: Done.


About the author: The author was a computer engineer researching AI at MIT who left civilization and “ascended the mountain” to contemplate the situation of America. Along the way back, acquired a doctorate but became homeless while trying to plant the seeds to a new civilization. He’s still recovering and awaits the right crew to redeem the world so that children can have a future beyond consumerism, debt, disease, and mass delusion.

Link to original article.

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