Aotearoa, New Zealand
Loomio is an open-sourced software built by a worker-owned cooperative social enterprise. It was developed out of the belief that inclusive decision making can change organizational dynamics at a global scale. It offers discussion tools that make it easy for anyone, anywhere, to participate in decisions that affect their lives.
May 29, 2020
How does Loomio help move away from a hierarchical structure in decision making to inclusivity?
As a discussion and decision making tool Loomio in essence is non-hierarchical and can be used for different types of decision making. One end of the spectrum is consensus, trying to get everybody to agree and in most cases that really doesn’t work in practice. As well as other decision making processes like advice and consent based.
Loomio is a tool that allows you to invite in the people that you want to participate in the decision. Whether it’s to agree for a particular outcome or to be involved, you at least have a say in a decision that is affecting you. The tools that we have through the discussion, polls, and proposal can help to facilitate a discussion through to a decision.
What we also encourage through our tool is a process of divergence to begin with and inclusiveness to involve as many people from as diverse a range as possible. By getting that wider input, you can then look at the information you have available and begin to work towards an agreed outcome. That’s the DNA of the tool, the values of inclusive decision making is hardwired into how Loomio operates.
How is Loomio encouraging input from its community users, do they get a say in decision making?
Yes, we have a community of around 1,000 or so people in our Loomio group and they are quite diverse in their use. There are people that are detail practitioners within their own organization to open source software developers, it’s a pretty open unstructured community.
We encourage people to discuss in the community group when they have ideas for a feature or even if they have problems. We see and when appropriate respond to comments and the discussions within the community. We use that as our primary guide for the decisions we take in terms of product developments going forward. Last year we did a major revamp of our software user experience where there was a period of around four months with about 1,000 different releases. Each of the releases were being tested in the community and they would feedback their experiences. In a couple places we actually rewrote sections of the software because of the feedback we had.
What I’m also touching on is another practice that we have in our organization called agile. Agile development and agile processes is one where you prioritize building something and getting it out there into the community to get feedback quickly. From there you iterate and improve it rather than going away for a year in the background and then coming back and saying it’s all done. Sometimes that gets us in some trouble but most of the time people are quite responsive. We do a lot of testing in the community space and when we did that release there was a Beta period where people could opt in and explore the new software and use that as a way to feedback their experiences to us.
When it came time to turn everyone on to the software we already had months and months of experience and confidence that the software was solid. Ultimately we need to take responsibility for the decision of how to get feedback, when and how to respond to that information, and when to do the releases. This is not a consensus, we are not waiting for all 1,000 people to agree on every particular feature. People have the opportunity to feed into the processes of doing that but we keep moving forward. The reality is that it’s impossible to please everyone all of the time and we need to prioritize toward as many people as we can and their experience. Sometimes that requires harder decisions for people but making decisions is really critical for any organization to move forward. They have the opportunity to be a part, that’s what really gets to the heart of our mission.
We’re also structured as a social enterprise and our purpose is to help people be involved in decisions that affect them. That doesn’t mean helping people to make all the decisions but to be involved in the process of doing that. We believe that’s important because there’s both a responsibility and sense of empowerment by having the opportunity to be involved. You feel you are going to be listened to and can have a say but at the same time understanding that ‘I’m working as a part of a collective here and I want to contribute but I’m happy if the decision doesn’t go the way I was expecting, at least I know more about it.
A great example is happening right now how different countries around the world are responding to the pandemic. When people have some involvement and greater understanding they can be more tolerant of the hard decisions that have to be made. People get very fearful when they feel like they don’t have the information and things are happening behind closed doors. One of the cooperative principles is to help your members be better cooperative members. There’s a responsibility for the cooperative to help people participate and also accept the responsibility of membership that comes with that.
Why was it important for Loomio to provide an open-source software?
We wanted to build Loomio software in the event that if we fail to keep it alive and drive it forward it would be there and made available for people to continue further. We also felt that it’s an opportunity for more people to be involved in the creation of the software and to feel a common sense of ownership.
Another reason the open source is helpful is for security, it gives people confidence that they could go and read the software code to see that there is nothing untoward going on within the code. Whereas prosperity codes are generally locked down and not made available to anybody so you can’t really be sure what’s happening. Knowing that there's transparency, which is one of the values for Loomio, in the way the code is written, helps people to have confidence in the code. Loomio the cooperative is a software but we also operate it as a service. There are many groups who like to take the software code and run it on their own servers for their own internal use which allows people to take it for free and be able to use it as they wish.
The intent is that if they develop anything further on top of the code then they bring that into the main code base to help strengthen it. We have a number of free people using Loomio software around the world for their organizations. When I say free, it’s not a charge to us but they still have to pay for their own hosting costs as well as maintaining and running the software.
The last point I would say is that it gives confidence to businesses. We have a bank currently that’s running a version of Loomio within their software and banking system. Their need for data security is very important but they are also looking for software that can have a life beyond itself. If our cooperative stops supporting the company then they could either continue to support or develop it themselves or pay someone else to do it. It actually gives freedom of operation for companies.
How did Loomio obtain funding for the software?
We have tried a whole range of different funding but our first significant funding was a crowdfunding campaign in early 2014 reaching out to activists and our networks across the world. We had around 1,500 donors that contributed around 300,000 or 400,000 U.S. dollars in a fairly tight campaign of six weeks. There was a big preparation beforehand and at the time we hadn’t figured out how we were going to charge for Loomio so it was just free. We had a lot of goodwill and support from people around the world which also helped us really launch Loomio. We never had sufficient funding to do a lot of marketing so most of our growth comes from referral or word of mouth and that was really launched from the crowdfund.
The second significant type of funding that we had is redeemable preference shares and that fit our model well, we raise around $800,000 with that. It is a face value share that doesn’t contain any voting or ownership rights. It worked in the cooperative in that our cooperative members have voting rights but don’t control the value of the share, the investment was kept separate. It’s not like ordinary equity, we did not give up a portion of our company to raise those funds but it was equity. It works well with donors and individuals, it hasn’t worked well with institutions, they prefer ordinary equity.
We’re planning for a more substantial fundraise probably next year and we’ve made some changes to our cooperative structure that enabled that to happen. It’s a good question because raising funds in a cooperative is one of the hardest jobs to do. However, we’ve always built and had in mind to build Loomio for a sustainable operation for the future. Traditional startup types of funding are designed around equity and capital gain that encourages the owners to sell out at some point in the future. The returns on the investment for an investor in a cooperative aren’t as high as they might be if you were a successful venture capital funded business. We’ve worked really hard to set up Loomio to be a sustainable venture into the future and not have to rely on extraordinary growth to generate value that will ultimately wrench the company away from the members control. The capital funding structure is really critical to a cooperative model.
We benefit from and R&D tax loss credit which is a special thing in New Zealand. Since we’re spending money on software developers who are building the product it’s considered research and development. There are a few little schemes like that to help us but you can’t rely on that as a primary source of funding so our model for some time now is the best way we can assure sustainability is to have a strong and robust business model. We’ve been working hard to adjust our pricing and build a sustainable subscription model so we don’t do free for everyone anymore. We have companies like a 400 person human resources company in Toronto paying $10,000 a year versus a volunteer group of trustees in a local community paying $10 a year, we have quite a huge range of different pricing structures.
How has being a part of a collaborative network like Enspiral benefited Loomio?
It’s key, I don’t think Loomio would exist today unless it was a part of the Enspiral collaborative network. Firstly, the original ideas of Loomio met with folks at Enspiral to actually help implement those ideas, Ben and Rich met with Alana and Rob and the other members of Enspiral. It was only because of the software development expertise within the Enspiral network that allowed the original and the very first part to get going.
Secondly, they were really the first customer, they were the key Beta customer for all of the testing in the early days. They had quite an influence on the direction of how the software was developed early on. As the network grew, the partners, consultants within Enspiral, and various other spinoff ventures of Enspiral were the early customers for Loomio and helped spread the word about it. We never really had any real money for marketing so we needed the Enspiral network to help develop.
During the crowdfunding campaigns in the early days, the Enspiral network helped to amplify whatever activity that we could do just as a small group of people. At least half of our team have also been with Enspiral or other Enspiral ventures. It’s a great opportunity to recruit and have a good quality staff come and work amongst the cooperative and become members. That is a big step forward for us because we already know the people, have some knowledge of their values, we have seen them already in action and the work that they’ve done. Similarly, it provides a place that if the cooperative can’t continue to support a particular individual, they can use the Enspiral network to find roles and jobs.
Enspiral is an alliance of broadly liked minded people who are coming together to try to work for good in whatever form that takes. There are a lot of training workshops and training organizations. The Enspiral Dev Academy is actually a co-working space and a bit of an incubator for developing ideas. There’s a structure around the membership of Enspiral that is strongly built on intent, developing relationships and friendships while exploring ventures and opportunities.
What is the greatest challenge in nurturing a decision-making collaborative?
To begin with, the decision-making collaborative was highly project oriented, the purpose was clear to get the first version of the software code up and running. We used to call it a swarm, once a week there would be a meeting together. The critical part for all organizations is how are decisions being made. From the early days Loomio developed as a non-hierarchical structure and to make decisions wasn’t entirely clear. Initially, they tended to be consensus oriented but the numbers of people grew and the areas of the business got more complex and more specialist in some areas. We started getting different areas of the business with different skill sets better able to make certain types of decisions.
The nurturing there was noticing that and developing processes to allow us to continue making decisions at the speed that we needed to. The challenge here is how do you keep moving forward at the pace that you need to, particularly as a software company in a fast changing world. What are the processes and practices that you have around decision making that allows you to do that effectively. Trying to get everyone to agree on everything all of the time is just impossible but at the other end of the spectrum you don’t want to just have one person deciding everything for everybody.
One of the key practices or processes we’ve put into place really comes down to our planning and agile sprint rhythms. We have a handbook called Loomio.coop where we talk a little bit about strategy planning rhythms and our weekly sprint rhythms. We found that the rhythms are the most important check in. We start out in the beginning of a two week sprint with a clear goal of what we’re trying to achieve.
Right now we are revising our pricing which impacts the whole company but there are three of us that have the mandate to prepare and get it to a point where it’s established. We use the Loomio thread to run the conversation about the work that we are developing so that it is visible to anyone in the company but the work is actually happening within one group right now. People can be involved in it as well as see the progress and weigh in if they see something going off track. When it comes time to present our new pricing, there’s a clear record and trail going back to see all of the thinking iterations that have gone through and the research that has led to that.
A decision like pricing is a fairly significant one that I don’t think will be made by the whole cooperative but it will go up as an advice based process. We put it out there to the community that we want to make this decision now, we’ve sought the advice, would do one last check in if anybody had any other advice, and if it's something that totally changes our views we’ll move forward. Some of these issues are very complex and they require a lot of deep research and thinking and also expertise, consultation expertise.
What is the greatest benefit in nurturing a decision-making collaborative?
The greatest benefit is actually having these conversations about decision making, it makes it clear how our decisions are being made within the organization. We built a culture of responsibility around decisions. We do a retrospective at our agile sprint every two weeks. During the sprint, if somebody says this decision was made or this thing happened and it wasn’t really following the framework then there’s an accountability that comes into play.
Rather than letting issues build over time we are dealing with them pretty much as they happen. These practices and processes have checks and balances that allow you to deal with issues and conflicts as they arise and when they are still relatively small. If they are left to go under the rope for a while then it could become a big issue. You’re actually building stronger relationships within your organization and that’s good for everyone. It’s good for your wellbeing, the wellbeing of the organization, and the resilience of the organization. I think that’s the biggest thing of being a cooperative and collaborative, if we were operating like a traditional startup or traditional software company we probably wouldn’t be around today because we’ve been through a lot of ups and downs throughout the cycles.
One time in particular I recall sitting around in the grass one Sunday afternoon out on a retreat, we were running out of money and effectively checking in to see who was in for the next phase. We were making a re-commitment back to the cooperative for at least another year, some people couldn’t do that, sad to say that but it was a conscious decision that everyone made. To get to a place where you are having those sorts of conversations that is what is sometimes needed for resilience within an organization.
I was a little impatient in the early days, saying why are we spending all this time with cultural relationships but it turned out to be some of the most important work we’ve done. Everything else has changed, our product has changed and our markets have changed but the core culture, values, essence of how we work together, and our relationships have grown and strengthened.
In the early days we had a lot of strong leadership so that meant it was harder for leaders that were also strong but not quite so vocal to step out. I think if anything my advice would’ve been to stick out stronger in leadership earlier. That was the key thing, allowing leadership to emerge wherever it comes from in the organization is probably the most important and there was a lot of work that was done early on.
Knowing what you know now, what advice would you have given yourself when the cooperative first began developing?
I would also have suggested looking very clearly at focusing on a particular market first. That was always a bit of a challenge for Loomio because we have a very bold and open objective of helping people wherever they are involved in decisions. Today we cover quite a wide range of markets such as activists, community volunteer groups, government, businesses, non-profit, and charity. I’m not sure if I would’ve given me this advice but I probably would’ve suggested focusing on one of those markets and do really well then expand to other areas from there rather than trying to cover all of them.