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Since I started working on the concept of a guild for WordPress product businesses one of the key questions (and where I’ve had some of the most feedback) is governance. How’s it going to work? How will decisions get made?
I had a chat with Lesley Sim after reading her piece on WordPress as a Commons and one of the ideas she conveyed on the topic of governance was to be clear on what problem we’re signing up for. The idea is that there are benefits and tradeoffs of any given approach and when deciding, just be clear on what the problem of a given approach is so you can take steps to mitigate.
With governing a guild, the key problem I see us signing up for is decision making. Who decides who can join? Who decides how member resources are allocated?
Lesley pointed me to Elinor Ostrom’s book, Governing the Commons: The Evolution of Institutions for Collective Action, and as I’ve dug in I’m forming what I think is a clear sense of direction.
As best I see it now, the guild would be organized within two complimentary parts.
The first part, let’s call Guild, Inc for the moment. The way I’m seeing it is that it would be the “operating” organization for the guild. It would acquire and manage WordPress product businesses to the benefit of the ecosystem with the intent of perpetual holds, lead investments in other product businesses, and generate revenue that both earns a return for its investors and contributes to the member pool.
I see Guild, Inc as being a fairly straightforward business, with decisions accountable to a board of advisors and investors.
The second part is the member pool. The idea here is that each member in the guild contributes from 5% to 20% of their revenue and that 100% of that revenue goes directly to member benefit
And this is where the decision making part requires additional effort. What we’re after is an efficient and sustainable decision making process that minimizes the risk of capture and remains focused on member benefit. Put bluntly, as much as I favor my own decision making ability, it’s clear to me that putting a person in charge of decision making isn’t going to cut it.
The Tragedy of Tragedies
Alright, so this is where it gets interesting. The tragedy of the commons is a concept that I’ve been aware of for awhile, but only recently became more explicitly familiar with.
Josepha wrote recently about Open Source and how we sustain ourselves. In it, she introduced the Tragedy of the Commons and the Free Rider Problem.
She explains it as:
The Tragedy of the Commons is the most recognized economic problem we discuss in open source. It uses the example of a public pasture to demonstrate what could happen if one group sent all their sheep there for the best grass without doing anything to make sure the grass remained the best and greenest for other sheep.
As Ostrom explains in her work, many folks over the past hundred years or so have referenced the tragedy of the commons and presumed that a common pool resource (or a CPR, as she refers to it) will, by nature, end up overused – hence the tragedy.
As I’ve learned from Ostrom’s work, though, the real tragedy is the belief that the failure of a commons is inevitable.
Most folks over the past hundred years or so have accepted that there are only two workable governance models for common pool resources:
- Entrepreneurs – Individuals create firms that “privatize” the commons, working to bring it all in balance in a sustainable way to support their motive of profit.
- Dictators – The “state” takes over and orchestrates management of the commons, using coercion where needed as their tool of choice.
What Ostrom posits (and won a Nobel Prize for) is that there is an alternative and it’s not new. Common pool resources have been successfully governed, with a profit motive and without coercion, throughout the world for hundreds and in some cases even over a thousand years at a time.
CPR Design Principles
Ostrom suggests, with confidence, that common pool resources (CPRs) can be effectively self-governed. After a careful, extensive study of CPRs around the world, she settled on a series of seven core design principles (with a bonus eighth) that lay the foundation for effective self-governance of a commons.
Using the simplification of her work referenced at OnTheCommons.org, I understand the principles as follows:
- Define clear group boundaries – A CPR needs to have clear definitions of where it starts and ends as well as the “members” of the CPR, able to partake of its benefits.
- Match rules governing use of common goods to local needs and conditions – There isn’t a one size fits all. Each CPRs rules need to work for the boundaries that it operates within.
- Ensure that those affected by the rules can participate in modifying the rules – The members need to be able to adjust the rules to meet their needs.
- Make sure the rule-making rights of community members are respected by outside authorities
- Develop a system, carried out by community members, for monitoring members’ behavior
- Use graduated sanctions for rule violators
- Provide accessible, low-cost means for dispute resolution.
- Build responsibility for governing the common resource in nested tiers from the lowest level up to the entire interconnected system.
The idea, and what Ostrom’s work has shown, is that if you apply these design principles to a CPR, the members are able to effectively self-govern, without a profit motive and without external coercion.
Governing the Guild
With that context, here’s what I’m thinking about the guild. As I see it today, the guild will have a single CPR. (Initially, I was thinking multiple – and adjusted it to a single pool based on feedback.) The “resources” are the member revenues, based on which pool they opt in.
My current thinking is that we have a single pool, participation in which is set at 5% of revenue revenue.
What the money gets spent on is another topic. The focus, though, would always be the three problems: compatibility, distribution, and monetization.
What I’m focused on today is how decisions about it are made. Applying Ostrom’s design principles, here are my current conclusions:
- The pool is governed by the members. The members themselves choose who’s admitted or not into the pool, based on behavior, following (if they so choose) the guidelines prepared by Guild, Inc.
- Members establish and adapt the rules of the pool by a majority vote (using, perhaps, a bicameral system), fine-tuning them to the needs of the pool, as long as (I suggest) it stays focused on the core problem of the pool.
- Members themselves monitor other members behavior, ensuring compliance with the value-based “rules” of membership and holding each other accountable for their contributions to the guild.
Details remain. At a high-level, though, this feels right. Guild, Inc serves as a guide to the member pool and provides scaffolding and resources as needed to support the CPR.
The authority for the CPR, though, rest within the members themselves, mitigating the risk of capture by Guild, Inc or any one member of the guild.
Here are a few of the outstanding questions I’m exploring:
- What’s the right legal structure for the CPR? Do we go with a non-profit? A public benefit corporation? A decentralized autonomous organization? I see this as ultimately being up to the members to decide.
- What’s the best way to “kickstart” the CPR? My current thinking is that Guild, Inc paves the way through its acquisitions and investments, modeling contributions to the CPR by guild-owned businesses and making membership a perquisite of investment.
I’d love y’all’s feedback. What am I missing? What questions does this spark? What else should I be considering?