#017 Combining Purpose and Profits with Juho Makkonen

[00:00:00] We might decide to invest in other, two-hour-done businesses for example that are doing

[00:00:04] at J's and things that are connected to our mission. Or maybe we lower our prices.

[00:00:09] Because I think our prices are too high today.

[00:00:13] Hi and welcome to the Code & Conquer Podcast. This episode we're talking to

[00:00:18] Yuvo Markonen. For the last few years, Yuvo has been visiting his company Sharedripe,

[00:00:24] a no-code slash code marketplace builder for other V2B and P2C founders.

[00:00:29] We're talking about how Sharedripe came to be, how they went from full-on transparency

[00:00:34] about everything in the company to a little more reserved about sharing everything

[00:00:39] and how this Stuart ownership model can be an alternative for a business that wants

[00:00:44] to support and reward its employees. I hope you enjoyed this episode.

[00:00:48] Let's jump right in.

[00:00:51] And welcome to a new episode of the Code & Conquer Podcast.

[00:00:55] Today I have Yuvo Markonen with me, with his company Sharedripe, Yuvo.

[00:01:00] Who are you and how did you get onto this podcast?

[00:01:03] Thank you so much Tobias for having me. Indeed my company Sharedripe helps founders, entrepreneurs

[00:01:10] to build online marketplaces. So basically we combine a no-code solution with the developer platform

[00:01:16] that's making it possible for somebody to launch quickly but then also scale.

[00:01:20] So I ended up here as you discussed. Obviously this is a blog that talks a lot about development

[00:01:26] but also lately we've been talking a lot about no-code and we are in the intersection of that.

[00:01:31] So I reached out because I felt that this would be interesting to have this conversation with you.

[00:01:36] And I'm very happy to have you. I think you're the third person now on the podcast

[00:01:40] that does a lot of no-code in their application.

[00:01:43] So for people that are not as deep into the whole development thing that we're doing here,

[00:01:48] so could you say one or two sentences about what do I use Sharedripe for?

[00:01:53] What's the marketplace and this? What do you consider a marketplace? What can I do with your app in the end?

[00:01:57] Yes definitely. So I think the good point of comparison is maybe something like Shopify

[00:02:02] which allows you to create your own online store where let's say if you are an individual merchant

[00:02:07] you are making some physical product and you can sell it through Shopify.

[00:02:10] Whereas we do two-sided marketplaces. So imagine a website like Airbnb or eBay

[00:02:17] or even something like Uber where basically there's a variety of suppliers offering various goods

[00:02:23] or services selling or renting and then this is the customer side.

[00:02:28] And the marketplace is actually not owning any of that inventory but they are just facilitating the transactions between the supply and the demand.

[00:02:35] So we basically help our customers build platforms of that kind.

[00:02:40] So that's something you cannot really easily do with e-commerce solutions like Shopify

[00:02:43] because they aren't really built for that. Probably like a Shopify for marketplaces would be one analogy

[00:02:48] for Sharedripe in this sense. So while Shopify is doing like I a lot of B2C

[00:02:53] and a lot of one company sells two different individuals you guys can facilitate having individual sell to individuals

[00:03:02] that's really much different. Exactly, yeah we are actually like a really big part of our customers

[00:03:06] are doing like a peer-to-peer like in the style of eBay or Airbnb.

[00:03:10] So peer-to-peer rent, or peer-to-peer selling of used goods from your closet and so on.

[00:03:15] How did you come up or what was the starting point for Sharedripe?

[00:03:19] How did you get the idea to do this and become a competitor to all these other solutions?

[00:03:25] Yeah maybe not so surprisingly usually this kind of a start from you having the problem yourself.

[00:03:30] So we launched a marketplace of our own. It was actually in a university research project where we

[00:03:36] like first launched our first marketplace with my co-founder it was this peer-to-peer platform for

[00:03:42] sharing various things selling your old coursebooks and borrowing tools and like helping each other out with I don't know moving or something like that.

[00:03:50] And then it got some initial nice initial attraction into campus. This was back in 2009 that we launched there

[00:03:57] and then we got the idea of spinning it off as a company and we did that.

[00:04:02] And then at some point lots of people started reaching out to us and say hey I also have a marketplace idea but I don't know how to code can I just use your

[00:04:11] tech and wide label that and then at some point when we had gotten some outreach is like this we realized that maybe this is actually

[00:04:18] the problem that we should be solving because at the time Shopify did exist like WordPress did exist,

[00:04:22] WordPress did exist like Squarespace did exist but none of these tools really worked for this problem.

[00:04:27] So there was really nothing out there for that market so then we set out to basically make our software customizable to create that thing.

[00:04:35] And when you started out as fairtrip like the first few iterations of the app was that already the no code platform that is today or did you start out just

[00:04:44] white labeling the stuff that people needed.

[00:04:47] Yeah it really went through a couple of iterations so the first product we launched back in 2014 was fully no code.

[00:04:52] So the idea was that you would be able to without any coding like launch a very simple marketplace website,

[00:04:58] it could do rentals like Airbnb or sales of use goods like eBay or selling some basic services like Fiverr.

[00:05:05] So we had a couple of these categories you would be able to customize some things but then actually at some point you would run out of ability to customize.

[00:05:13] So what we quite soon learned is that ultimately no matter how many features be built to that platform that would never be enough like marketplace are really complex that they are not like online stores,

[00:05:26] they are like really it's almost like every marketplace is unique and everybody would have some feature that they wanted that was very specific to them.

[00:05:34] And that's then like when we realized that okay, it's really we don't really believe that this whole like no code approach really allows them to take them to the scale where they want somebody

[00:05:44] would want to build the next Airbnb and so on. And that just wouldn't fly so then we actually ended up creating a completely new product that was only developer focused on that launch in 2018.

[00:05:56] So that was basically it would be a headless marketplace software, so we offer you an API and then top of that some open source templates that would allow you to spin up something really quickly but then also on top of that you could just really develop everything you want with code.

[00:06:09] So the focus group was really developers idea was to be developer first which naturally then meant that the main problem with that product was that it was not accessible to 90% of the founders who we encountered because they didn't have the budget to hire a developer, they wouldn't have the coding skills themselves.

[00:06:25] And then finally like early this year we actually launched our most recent iteration which basically combines these two so now there's exactly one product you can launch without any coding you can get to up to a certain point but then you can also start custom.

[00:06:38] You can also start customizing that same marketplace that you built without coding, you can just customize its code base and add any feature you want so that's basically no limit what you're going to add it's an open developer platform.

[00:06:50] It took us quite a while to get there but I feel that this is really the ultimate thing that kind of combines the best of no code and the best of yes code.

[00:07:01] Yes code that's not the way to say so how does the combination work like when I start out with you guys and I'm for example building a marketplace for selling t-shirts and I have the designers on the one side and the customers on the other one.

[00:07:14] And I want to bring them together and they can sell the t-shirts on the platform for example how do I then go from just using the basic blocks that you guys have and now I need some different solution that you actually can't do with that.

[00:07:27] How do I start with actually adding code to the platform then yeah so basically we have two parts so we have an API and like share drive core that we as we say that we host and like you can so basically you just connect to it through our APIs and then we have what we call a template app which is basically this like hosted client application and so we are hosting a version of that and it's configurable so you can make many changes that from the admin console without any coding.

[00:07:53] But then if you want you can just install that open sourcing to your own server and then you can just start customizing the code and then calling our APIs and so mostly most features you can build with just front and development so it's fully headless but then you can also plug in your own back and database if you want to do something that is not at all related to the core marketplace functionality so that basically allows you to integrate any third part of service add anything you want to the marketplace.

[00:08:19] But still at the same time our core handles most of the heaviest lifting like any kind of headless service.

[00:08:27] So it feels a little bit like I'm comparing it to the create react app that is doing like a basic react app and at the beginning there was a web pick technology underneath I think they changed it now to a year's build or something so I'm pretty much ejecting from the no code part and then I can change pretty much anything on the code that I want to set some like this that the comparison to the tips.

[00:08:48] Yeah, you know what yeah like the in practice we have this way of that template has this set of configurations that it just gets through our API so basically we just have this.

[00:08:58] What we call assets which are basically a chase on configuration files and then you just get a set of those so then we can put any no code configuration there and then we also have the system that allows you to really quickly create like new no code UIs because then you give it like a chase on and then the chase on schema.

[00:09:15] It's like just generates new UIs for those nice no code UIs for the for for any new configuration where we are adding new feature and then it sends to the template so it makes it also really fast for us as bad news stuff.

[00:09:27] I think it's a little said that we can't do show a demo of this product on the podcast because I would really love to see it right now.

[00:09:34] Yeah, you're trying out.

[00:09:36] So we have to point every listener to do actually what's that there is like a way where you can play with no code and code together and I think you guys doing a pretty cool way to do this.

[00:09:47] So you're deferring from platforms like bubble where people can only put pieces together at bubble knows of course there are plugins who are supporting a lot of functionality that I would want but moving away from bubble in at least in my head feels pretty hard to do.

[00:10:03] I pretty much have to develop everything again.

[00:10:06] What's your thoughts about platforms like bubble that are purely no code and can't add much code to it?

[00:10:13] Yeah, that's really good question. First of all, I really love bubble.

[00:10:16] I think it's an amazing product and like they it's doing a tremendous work to empower like people around the world.

[00:10:23] So I really think that this is the main thing about no code how many people it really empowers the build something of their own.

[00:10:30] I think that there are two main challenges though with bubble one is that nowadays it's so powerful that it's basically what they did themselves say that is visual programming.

[00:10:40] But even visual programming it's still programming actually quite complex to learn like bubble themselves say that oh, it takes maybe a couple hundred hours to get your MVP and maybe a couple thousand hours to actually get like something that is actually really professionally launchable and so on.

[00:10:55] It can really like also be very complex and you can hit performance issues if you do something wrong and so on.

[00:11:01] Whereas in our case it's more like our value proposition is that you can get marketplace running in one day.

[00:11:06] So it's really like actually I really like loved what like Laura said in an earlier episode of yours but actually having like a limited set of features in the very beginning and certain constraints can really help founders because if you like if you have lots of flexibility people just end up building and building and like never launching.

[00:11:24] And I think bubble maybe also has some of that so lots of people just build cool stuff with that but then points where you actually need to start making money is that really happening.

[00:11:32] But that's anyway like one thing this clearly way more learning curve and then if you like have like more constraints, then you can get that process more straight stream line so that then the important stuff is actually really fast as to set up.

[00:11:44] And then the other challenge comes at the other end.

[00:11:47] At some point you're going to run into this situation where you actually cannot build this thing.

[00:11:52] So let's say you want to build bubble with bubble so that would be it would not really works so there's but that's like a maybe like far fetched example but there are lots of these other things still where ultimately it has its limits if he hasn't been configured to do something then you can do that it has lots of plugins today, but the plugins work in a specific way and if you want.

[00:12:13] A connection to certain API to work a bit differently than the plugin, then you just cannot do it without coding so then always you anyway need to code but then I feel that bubble still because their vision is so much that OK, you should be able to do anything without coding.

[00:12:29] I feel that they haven't ever really optimized for a great developer experience and like so I haven't really heard software developers saying that I love bubble that's my favorite development platform and that's not something you're really here.

[00:12:43] And I think that's the thing that we think that we want to be a platform where developers say that OK, I love developing this thing it's so easy like it's so has great observability like when it comes to something is going wrong.

[00:12:56] It's so easy to connect with all these other software systems that I actually need to connect to that are also all APIs that there's all this complexity that goes with like building like a professional app.

[00:13:07] And I just think that ultimately at some point it's just easier to handle that complexity with code and just trying to create like a visual language for doing all that and that's why I somehow feel that ultimately like no code will remain a tool that will be used to test ideas quickly.

[00:13:25] But then the biggest companies in the world are and like pretty much the businesses that will employ multiple employees don't feel have to like serious revenue they will ultimately will be doing at least some custom coding always.

[00:13:38] Mirror my experience with having a news bubble for a second when bubble came on my radar I think I got it from one of the indie hacker podcast episodes but we're talking to another founder who's doing all of it in no coding tools.

[00:13:54] And then I tried bubble and my experience was exactly like you described it I tried it out and I was like I can do this faster with code.

[00:14:03] Then with this platform where I have to drag and drop all of the stuff in and learn the way that bubble is doing stuff I was very skeptical and I pretty much told all developers that I shouldn't really check out no coding tools because it seems to be another just another learning path towards coding

[00:14:21] and if you already a coder doesn't really make sense your platform might be different there since I can go from like trying out something with an MVP and then take it out and develop it all on my own.

[00:14:33] Yeah, I really like the headless approach as well. I think there's a Shopify API that does this as well but probably not for the kind of marketplace that you guys are doing another question I had for no coding since you already since you created this company in 2009

[00:14:48] and you're on the market now for a long time and no coding tools have been very different in 2009 than they have been today.

[00:14:55] What kind of changes that you see in that market in that time that you were in there?

[00:15:00] Yeah, definitely I do think that in the beginning they were more like like simple like website builders and obviously if you look at the no code world today

[00:15:09] now we have these tools that are really almost visual programming so I think what like what you mentioned about webflow in the previous episode that if you use the flow it feels like okay I'm actually coding and yeah exactly.

[00:15:20] It's very powerful but also that does mean that it really takes a long time to learn and that is also like one more concern that I have with no code is that it's like a programming language and a developer platform that is fully owned by one company

[00:15:37] and the thing with that is that company really often is also like VC funded which basically means that they're probably looking for an exit and that exit might come for example by selling their company to Google or Facebook or Microsoft

[00:15:49] and then I'm just really curious that if you think of building a business or a company would you really want your entire product to be owned by Microsoft which would mean that they could suddenly decide okay let's increase the price by 10x

[00:16:04] or let's just shut this down because actually we don't want to support the developer platform anymore and still the thing I like about code and open web is that nobody owns them.

[00:16:12] Like most of the programming languages are open source obviously you still need to use like AWS and all our operator services often but you don't have to necessarily like they are always for all these ways for you to actually get freedom of them

[00:16:26] and actually run without this dependency on the big five and having to fear them suddenly changing the rules of the game.

[00:16:34] So me in question then but how do you guys support people if they want to leave your platform is there a way that I can take the stuff that I'm doing on your platform

[00:16:44] and take it and put it somewhere else completely independently of shared drive?

[00:16:48] Definitely so I think that the important part of that is that whenever you are building something with us you are building that we code and typically you are customizing this open source template we have and that is just open source.

[00:17:00] So you can take that whole thing both the custom code that you wrote but also all the stuff that is in our open source repository you can just take it wherever and you are not dependent on us.

[00:17:10] So you would need to replace those APIs that we have that we have in our core so this work for you but you would get to keep everything that you built and more.

[00:17:20] And that's so different from bubble where you might have spent like thousands of hours and you get to keep nothing okay you get to keep your data but you need to rebuild everything

[00:17:30] and there's no API documentation that will help you build the remaining bits there.

[00:17:34] So I think that's a very different situation there.

[00:17:38] It's going to be a pain in the air just taking all your losing all your bubble code or your code in parentheses and having to develop everything on your own and only having your data that's going to be like that I would just abandon the project.

[00:17:53] I think one more question that is always one thing I'm always thinking about right now because it's so in the discussion on Twitter is a lot about payment the last few months for at least in my experience.

[00:18:05] So when I'm going with a product like yours how do you handle payments for your users like for the developers that are doing marketplaces there and especially the tech stuff because we have a lot of talk in the last few months about lemon squeezy about try not supporting text.

[00:18:24] And a lot of people just watching Texas obviously that seems to be a thing in the India ever bubble to just not to just not talk about the text problem like what do you guys want your opinion what do you guys do there yeah that and I have to say that I feel that many of our customers are probably.

[00:18:44] I mean, they are waiting that in the beginning. I also do understand it like sometimes because that stuff is really complicated and I also somehow feel that all this regulation that kind of is there in place for like big companies like I would prefer maybe some rules were more relaxed for like somebody who is just starting out because it's also just insane if you need to add like always six months to your development project and the very first version just to support some complexity.

[00:19:12] But yeah, they are ways around that but indeed that typically involves quite a bit of like manual work and so on and naturally that doesn't help is that every jurisdiction and every industry has it's a bit different when it comes to that.

[00:19:26] So we also do have a stripe out of the box and for sure it handles some things some other things it doesn't.

[00:19:32] We also do allow you to integrate any payment provider of your choice and also like really often recommend so one one really good thing is that there are many of these tools that at least have realized this bird and then you can just okay just plug in this API just calculates the sales tax for you.

[00:19:48] And then they usually point people to those but really often we also just advise that okay maybe in the very beginning just send manual it invoices the the group of people and I like just see if you're constantly working and then at the same time.

[00:20:02] And then the point when that's really become something pain than investor bit of mine time to handle the developer.

[00:20:08] Yeah, I think also of the opinion that especially the EU where I'm and you are also placed and we have a lot of loss that are prohibiting small startups and indie hacking businesses in a way of doing things fast.

[00:20:23] The GDP are laws which you have to comply at the beginning because the I think the lowest payment that you will have to do when you're not following the law is two million I think 4% or 2 million so 4% of revenue auto million and whatever is higher needs to find that you have to pay if you don't comply.

[00:20:44] I think the things that the two things that are flowing us down most are the GDPR there's good things in there of course but one is the GDPR and the second is the text the text stuff which is really complicated.

[00:20:56] We've noticed that we've when it comes to GDPR like we have purposefully tried to avoid like adding built-in integrations that are in conflict with GDPR so then we're more like okay so actually this you can really quickly launch a basic version that actually just doesn't do any non mandatory cookies.

[00:21:17] So you actually don't need to have the whole content bar and so on so which kind of helps people to avoid that then we are like a bit trying to not to be able to okay actually just try to start simple try not to spy on your users and actually it would be better of avoiding some of this complex.

[00:21:30] Maybe don't add Google analytics as the first but like exactly so they're lucky like we have integration to plausible which we're also using ourselves from there lots of others nice analytics tools luckily these days that that's kind of allow you to do the same tracking in a nicer way.

[00:21:44] Yeah I'm using plausible as well also want to show to another fellow IndieHacker who's doing simple analytics. I think Netherlands I'm not sure but what his name is will link him somewhere simple analytics and plausible are pretty much the ones that I've seen and heard of in their fully GDPR compliance so they can sidestep their problem for you for pretty much any end IndieHacker listening and not have so many European law problems.

[00:22:07] We are already on our way to like transparency questions you guys as a company and we're an IndieHacker podcast so we have to talk about this.

[00:22:16] New guys as a company have done full transparency reports and have opened your company to the public a lot in the past.

[00:22:25] How was that for you guys how did you manage to do that what did you do there?

[00:22:30] Yeah I remember that when we were about to start our company and we were in this incubator with my co-founder and then there was this lawyer who was talking about NDAs and like all this protection and they really like we really don't want to do this this is not us can we just have something where we are just fully transparent about everything we are doing and then we created this concept of an open company like as we called it at the time and we went like really far so our communication would happen on a kind of like a public IRC channel.

[00:23:00] That everybody could join at the time there was no slack we would have an open Google Drive folder where most of our documents were just there for anybody to see and we just our whole idea was to look at the default to transparency and then we only hide something if that's necessary.

[00:23:15] It's said that it still was a bit of an experiment naturally at some point you would realize that the challenge with that is that you still have like lots of stakeholders and all those stakeholders have their own kind of like perspective so well once the stakeholder is your customers who might not want to get the same.

[00:23:29] Who might not want to get all their data and like your contract with them and all that stuff like exposed and the other is naturally your team so every individual still has their certain rights about their stuff.

[00:23:40] So we have reverted from that approach in the sense that we no longer I think there's still exists like a public folder but there's I think it only contains a way more limited amount of information for now but they still somehow believe in the core idea of that when you

[00:23:56] think about whether some information in your company should be like public or private then I really like the idea of defaulting to transparency within our company still that is the case so everybody in our company has access to pretty much everything except that they are like this one folder that's for one reason or another if you are this health information about employees obviously for obvious reasons that just cannot be that would not be anybody's interest to have that transfer and broadcast it but it's really like there.

[00:24:25] There should be a really good reason for not not publishing something but I also did notice that when it comes to broadcasting outside our company I realized that actually if we just have everything there most of that is just noise to somebody so I actually feel that it's better to that in a way that when you are publishing something you have actually put it to a format that actually offers value to somebody who doesn't have all the context of like actually being inside your company.

[00:24:52] So that is one lesson that we learned that okay just by transparency by just dumping stuff there that would be just like you are like open source without documenting your code or investing into investing anything into making it actually like a nice to install and so on.

[00:25:09] And so for now we that's how we think and actually that takes some time but we feel that currently we probably bring more value by being more conservative about what we expose but then putting some effort into putting that into format that it's easier for people to consume.

[00:25:24] You stated that at the start you pretty much shared everything was there a point where share tried just shared everything to the public like employees salaries and stuff like that or your investment states.

[00:25:35] Yeah yeah it there was a point where for example I remember a block post where we say that okay this is exactly like how much every person in the company is making but at that point is basically the company was three people.

[00:25:46] So it's also like very easy for us in the early days where just okay and we were making all like low salaries so it was like we still have transparent salaries within the company so everybody knows exactly how much everybody else is making and that's always been the case and that has worked really well for us by.

[00:26:03] I know there are some companies like Buffer who also like open that like publicly so maybe we'll do that at some point but then also again that might be something where I feel that you want to justify it but by also really receiving that in a format that also gives enough context on like how we come up with this salaries and so on.

[00:26:22] So let's see if we do something like that in the future.

[00:26:25] And you already said that a lot of stuff is noise to people through the outside for example what are the important parts you think that you that the company should share because it provides some kind of values to the public.

[00:26:38] Yeah good question and I kind of at least I feel that many more companies could share more about their operating principles so like how they work as a company and also maybe something more about how they're being owned, how they're being.

[00:26:54] Like for example in our case it's like very clear that we have this system and I think we're going to get into that in place that we have this structure that kind of and we have these certain rules in place that basically dictate how our company can be governed but can somebody who owns what and who has more power over that and they are these type of things that I feel.

[00:27:16] For a certain type of consumer protection for example if I as a customer you think that who are you dealing with.

[00:27:22] Then I really feel that sometimes I see company marketing websites where you actually don't really see who are the people behind them why are they doing this how exactly is this company owned like how is this company like govern to really has to say and so and I think these are important questions when you especially if you are relying your company in one way or another on using that company software like in our case like many of our customers.

[00:27:45] They really need to ensure that they also stop like are they going bankrupt tomorrow for example you have been profitable for the past three years and that's the and I think it's so at least saying something about your financial situation can definitely put your customers in a more comfortable position.

[00:28:07] So another thing would be like the one thing would be the processes shared so people actually know and maybe other companies know what you're doing and the other one you just mentioned in the last two sentences like revenue and costs are shared still to this day with the public.

[00:28:23] Yeah, we don't have a public dashboard but for example I definitely that's something that I have been sharing some so right now for example it's around 200 per month is our revenue so basically I think we have been doing something like we thought we're two million.

[00:28:35] A year profit margin has been pretty narrow so far but it is there has been there for the last three years.

[00:28:41] So that the definitely is information that I have to share.

[00:28:45] Yeah and also there are reasons why that that margin might not be as big as it could be we're going to talk about that in a second one more question towards this kind of category is when you're sharing lot of this stuff and you have shared a lot of data in the past.

[00:29:01] What do you think about your competitors because one thing that the building public and IndieHacker communities always criticized for is you're basically giving away all your secrets what's your opinion on that in terms of open source.

[00:29:14] Of course and also sharing revenue sharing marketing strategies and stuff like that.

[00:29:19] Yeah, I think that for sure like there's a kind of like a that's one aspect of that what the other aspect is also that's by sharing that like you also probably make yourself better know so you it's a way of like spreading the word about who you are what you're doing.

[00:29:38] Probably if you are actually sharing something that is valuable to others and you're giving the way for free then there will probably be also like people who will encounter you and some of them might actually be also interested in the in the paid service that you're offering.

[00:29:51] And naturally it's also like I feel it's also like a form of building your brand that okay this company is doing these things right and if somebody has the same values at least I prefer as a consumer by buy from companies who somehow feel that they share.

[00:30:07] Similar values so to me this is a kind of like a purchase preference and naturally the same applies for recruiting any team members so we have a certain type of culture and I think that when the more we share about ourselves obviously it's easier to find great candidates but also easier to filter out maybe candidates that are not fit for us because they see okay so.

[00:30:28] This environment is not for me and that's great because there's no environment that is great for everybody and like that's why you want to find those people who are who really share the same values because that I think is quite important plus also just I think that I don't know I sleep better at night I feel better about myself and knowing if we do things that we feel aligned with our values.

[00:30:52] I think you already started us into the third part of our interview here so what we haven't talked about until this point is that you guys are not a traditional limited company in that sense you guys operate as something called a steward ownership what does that mean and practice for you guys.

[00:31:11] Yeah that's a great question we used to be a traditional limited company we even used to have a VC investor and like when we founded the company we really didn't think much about the purpose of the organizational structure we just went what we knew and what everybody said and we felt that okay so we have we are an impact company for sure we felt that okay for us the social impact is the most important thing but maybe the purpose on profit our fully aligned so there's no reason for us to just continue raising money and doing what's what every.

[00:31:41] Other startup is doing only at some point especially when we were in the field of the so called sharing economy and so we started looking into these companies like Airbnb and Uber and Etsy and at some point we started wondering that today they are do building great products they're doing great innovations but they're also quite causing quite a lot of societal chaos and sometimes it feels that actually the profits might really be in conflict with the original purpose.

[00:32:10] When I noticed that when that happens if you have raised lots of VC money then it's not easy for the original founders to say actually we are going to choose purpose over profits and let's do this decision for let's say if Airbnb would say that you know what actually we don't we want to get rid of all the commercial landlords and we really want to go back to trust people sharing their so fast and spare rooms because that we think is really the most impactful thing that I don't think that would fly with the board.

[00:32:39] Even if that's what they wanted and at some point we realized that we don't want that to ever happen to us.

[00:32:45] We like our mission is to democratize the so called platform economy so we really dislike this idea that there would be a world where a couple of these try and silicon valley platforms would just own all the transactions happening between individuals and businesses in the world and they would take their 20% cuts for everything.

[00:33:06] And our approach to that is that we just try to empower everybody to just okay just vote with your feet create your own platform, create your own rules break away from that.

[00:33:17] But when we were talking about this mission in events conferences and the people said how about yourself and you're going to be just another extractive let's start giant if you are really successful you raise lots of VC money then you're one of them then you are going to be the one who extracts that same value and we didn't have a good answer for them.

[00:33:35] We really didn't and then and this is what we were wondering when in 2017 where we were planning to raise an extra amount of funding and then we came across this concept of steward ownership which is a it's a new label for like a really old way of structuring company so companies like Carl's vice and others like they they use that already in the in the 90th century.

[00:33:59] So basically the idea is that in a way the company's like a self owned so typically how you do that is that you set up.

[00:34:07] You give some shares to a foundation that has its rules some setup that typically prevents the company from being controlled by investors so in our case how this works is that that basically be transition into this model that works so that it splits at the shares that are for profit sharing and the shares that are for voting.

[00:34:28] So those are different like share classes and it our shareholder agreement now says that only people with an active work contract at share drop can hold voting shares and voting shares cannot get any dividends or that they don't have any other value value than voting.

[00:34:46] And meanwhile the investor shares or the profit sharing shares the way it works is that the company will use 40% of its profits every year to buy those back and it buys those back in the we did one crowdfunding round we raised more than 1 million with this model and the idea is that people would buy one share per 20 euros per piece and then eventually we will buy that share back for 100 euros.

[00:35:10] So basically you get a return as an investor and that's a 5x return and so that's a cap return and that is very good return I would say like for an investor let's say if you get 5x in 10 years that's way better than any stock market anything but it's also not infinite because we think that why the problem if infinite returns is the phenomenon that creates this kind of like growth issues that we specifically want to avoid.

[00:35:36] So you have shares for pretty much everyone that works there and those are the ones that are deciding stuff in the company and then there are shares for investors who buy them at an x amount and then you buy them back if you have the profits and 40% of your profits go towards buying them back at a higher price so they actually get an return in a profit that they should get for investing but it's not like we see funding anyone that actually invested in you guys wants to now see a 10x or 100x.

[00:36:06] Or go to market on stock on the stock market because they don't have the control over the company correct exactly exactly and the way it works that eventually we have both back all those investors shares because we are the returns come from true share buy back so if you have both all of them back and then we also have this we have a similar model for like compensation for like powders and early employees so eventually after the investors have been bought out I also have some of those profit sharing shares.

[00:36:36] And the company will eventually buy those back from me and then when those are all being paid back then all the profits of the company are being used to advance its mission in the way that the teams is fit.

[00:36:49] Maybe it's investing back in the company maybe it's donating the nonprofits maybe something else but it's it cannot be put into the pockets of the founders or shareholders.

[00:37:00] So what you're also saying is that the money that you can get as a founder from founding the company is hard limited to a certain number for you.

[00:37:10] That is exactly correct so I and it's a significant amount still at least from my perspective so the maximum I can get for true profits is 1.9 million minus taxes but then if I've gotten that that is the maximum and then on top of that salary and then everything else will go towards the purpose of the company.

[00:37:30] So in a capitalist system that we live in a lot of people would criticize you for this or would think you're crazy because people will argue that you as a founder have done all of this work for years and you you deserve telling the company for 10 or 100 X of your actual of your investment or your time for that pretty much mostly what do you think about that like how why do you not want to sell the company for 100 million for example.

[00:37:59] Yeah, I think that it's important if there's one lesson that I think that kind of like I would want to pass on to every person who is considering starting a company is that you start from thinking what is the thing that you want out of life.

[00:38:14] Like why are you doing this thing do you want to get really rich if you want like why and what kind of life do you want to live like how do you want your days to look like are there some achievements that you want to get like how do you want to be remembered like all these type of things.

[00:38:28] And that answers really different for every individual and for some people the answer might lead them to concluding that raising lots of venture capital is the right choice because let's say they want to I don't know build like a new form of creating sustainable energy which just happens to require 1 billion of investment and 10 years of research before it actually like works or some like really big thing.

[00:38:52] But if it is a software company that can be bootstrapped can be like made profitable quite early on then you don't necessarily need that cast infusion and if your goal is not to get exit and then live after 35 just leave your life do nothing but if your goal is actually to live like a satisfying and fulfilling life and part of that is actually contributing to something which might involve some form of work.

[00:39:18] Then actually like crafting the company so that it can be your ideal workplace for the years to come and can be like a really good choice and that's what we realized at some point we specifically don't want to sell the company because we just want to keep working here.

[00:39:31] And we want to we had this unique opportunity to design our own workplace and I have lots of say on like our working conditions who we work with and what we work on.

[00:39:41] And like why would you want to give that up ever this is the best thing I don't know if I would make an exit and make 10 million I would probably get the rest because what would I do then.

[00:39:51] I've been thinking about this for a few days as well yeah one thing I'm thinking about is the profits are obviously not limited so there will be more profits if the company is growing and at some point you don't really need more people to run a marketplace business

[00:40:07] because it's just going to be more customers not more things you have to do for that so what's your plan on what are you going to do with the profits that eventually will come out of this business after you bought back all the shares.

[00:40:18] Lots of different options so one is that we might be because I think there are lots of initiatives that are advancing our mission but are not necessarily directly related to our business but could really use our help and we could help like we could donate we could do like other things there

[00:40:36] because if you have that money then we could help in that way or we might decide to invest in other steward owned businesses for example that are doing a J's and things that are somehow connected to our mission.

[00:40:46] Or maybe we just invest in like new business life let's say like you mentioned earlier about payments maybe we should really create an open source payment company that somehow just takes that problem away and is to our own that doesn't try to extract so

[00:41:00] maybe we create something new like that ourselves and invest the money into that or maybe we lower our prices because I think our prices are too high today.

[00:41:12] That's one thing because we need to keep our business running and because of that we still need to charge quite a bit of money and I know that for some people even it's not that much.

[00:41:22] Like you can get marketplace for up and running for less than $100 a month so it's not a huge amount but for some person it might be too much.

[00:41:28] Our mission is to make this thing accessible to everybody and ideally the price would start from zero at least to people who in certain conditions

[00:41:37] and if we are making lots of profit the best way of using that profit might actually be to make less profit by lowering our prices because that might have the biggest impact that we can make.

[00:41:50] I just imagine the unashore liberal capitalist guy listening to this episode and completely losing his mind.

[00:41:58] How you fit your have discussions like this with other people whether when you're completely nuts you're completely crazy and no end shouldn't do business with you.

[00:42:07] Now I like every now and then it's naturally interesting when somebody like considers using our software when I tell a bit about this background and so on but I so far at least I haven't anybody said directly that okay we are not doing business with this kind of company.

[00:42:21] So usually still at least from the perspective of if I think about our customers like the fact that we are structured this way actually works quite nicely for them because that means that we cannot be sold nobody can shut us down.

[00:42:33] And so we like still from their perspective even if they go like some of our customers plan to raise money lots of money and have raised fees you money and so on and that's completely fine but still from their standpoint like the way we are doing these things just ensures that we are like a reliable partner for sure if I would be going more to start a conference is maybe I would just let me know who would be very disturbed by this or but I don't know I in the end like I've had less less such conversations that I would have expected over the years.

[00:43:02] Maybe good thing so when you guys like as I understand it everyone in the company has a vote about things that we have to decide about what does the process of making a big decision for example we want to make a payment processor for example we're going to make a new product what does the decision making for you guys look like if it's not like a typical normal company where I see all decides on them on like on him or herself.

[00:43:27] Yeah really good question first I want to stress that the two other ownership structure doesn't necessarily mean one person one vote type of thing or even like everybody having the votes there are lots of several companies this is not our invention there are many companies around the world operating with this model.

[00:43:43] Patagonia actually operates in a very similar model like they transition into this new model and there are many others like in some ways like Bush that the huge company that is that they have this type of model so they also cannot be taken public or sold in this way but it doesn't necessarily mean that you have like a completely flat hierarchy or one person one vote thing.

[00:44:04] We are planning the transition into infrastructure where they would be like one vote one person but in practice I think that every time we end up voting we have failed or our decision making has failed in some way because I feel that voting is not usually a great way of making decisions at least in a small company because usually you can have a discussion and then after discussion if you have a good way of disignating a decision maker and that decision maker system okay so I've heard your ad

[00:44:33] I'm going to now go to make this decision and then you go with that almost 10 years ago I read this book called re-inventing organizations which talk about talks about

[00:44:42] teal organizations and self management and so on and I think that since then that has gotten a lot more traction and there are many aspects of that in our way of I wouldn't maybe call us exactly teal in this way but there's definitely like some of it in our decision making also so there's no like even though like I am the CEO

[00:45:00] and there are some decisions that fundamentally would be ultimately would be made by me if like a conflict and if we solve in other ways but that's very rare that I would need to like exercise that usually is more okay who is the person closest to the problem that person then asked advice from others and then that person decides or then there's a strategic topic so there's an open strategy meeting everybody can join we discuss at some point we just conclude okay it seems that the majority of people think that we should do this.

[00:45:29] Let's just put to our internal messaging system okay we decided on this unless anybody objects. We are going to be doing this if you object then you are responsible for helping the original proposal to come up with that I meant the proposal so that you can access it anyway just like lots of freedom and responsibility for people to back home on the decision by themselves.

[00:45:50] So in the Stuart to go that there probably is some kind of security as well for decision making so what for example you as a CEO decide to do something that all of your employees think is a bad idea but since you're the CEO you're the only one making their decision is there something in place to stop you from doing that.

[00:46:10] So that the Stuart ownership model itself doesn't dictate that so every company needs to design their own model are the way we are planning to solve that actually we haven't yet exactly managed to solve that so that's one piece that is still in the process.

[00:46:24] So today me and my co founder have way too much voting power so we have a better power so we are trying to get rid of that situation fixing that fun final bug in our operating system and then the way the transit I the way things will ideally look like after that transition is that so we will still have the CEO.

[00:46:41] And the CEO did there some decisions like ultimately if some one individual would be behaving badly and they would need to be issued a warning or be fired ultimately that would be like a CEO decision like there are some rare decisions like that.

[00:46:54] And then there would be the board who appoints the CEO and then they are the shareholders people who have the voting rights which is basically everybody in the company in practice probably we're going to have some pressure like you need to be stay with the company for two years.

[00:47:08] And you need to go through some training that what does it mean to actually be like a steward and then after that but basically like everybody who just does that just gets that.

[00:47:18] And then ultimately those people decide who is in the board so then if you're not happy if i'm doing something bad and more than 50% of the people think that I should go any time for me to go.

[00:47:30] And that's the thing that keeps me accountable.

[00:47:33] You just talked about you being let go where your own company what happens to the shares that you hold when or that an employee holds when an employee leaves the company or let's say you don't have any interest in doing marketplaces anymore.

[00:47:48] And you leave what does that mean for the stewardship model in ownership and shares that have been distributed and stuff like that.

[00:47:57] Yeah so basically again there are these two classes of shares so I for example i hold the profit sharing shares which eventually the company will buy back nothing will happen for them.

[00:48:07] I would see if i would leave i would be just like an investor i would be holding those and eventually i will get some returns and then there they are there's the voting share.

[00:48:16] Eventually i will hold just one of those just like everybody else and basically we have said it so that the company will redeem that for the price of one cent or something like that so because that really doesn't have any monetary value because it cannot be in return so we have got another decision from the tax officials that yes this voting shares can be considered very cheap.

[00:48:37] So that means that it can just be redeemed by the company and so you need our rules say that you need to have an active working contract if I stop having that then then I need to give that up and the same would happen for any person who leaves the company.

[00:48:51] So people who have been in the company for two years and becomes two years they get the share and then people who people who leave will have to give it up.

[00:49:00] That sounds reasonable I think you like this holds to a should model already I think promotes work balance better than an usual company does that what's as share tripe what's your process towards providing work balance and not you're not profit driven your profit driven of course but it's not the number one thing that you worry about what's your thoughts as a company on workplace balance and having enough time of vacation and stuff like that.

[00:49:29] Yeah good question I think from the beginning like balance has been like one of our core values we've gone like to multiple iterations or defining like what are the most important values for culture balance is the one that has stayed like throughout all those iterations.

[00:49:44] That's something that I discussed already with my co founder when we're starting the company that we the company should allow us to leave the type kind of life that we want to live and that life has also lots of other aspects like besides just doing work.

[00:49:58] And I think we respected that pretty well like I have we have never worked more than the usual around 40 hour work week we've always taken around five weeks off actually for the past couple of years I think I've been away because I since getting children I've been away on average nine weeks or so per year.

[00:50:16] I think that one way so one way is just okay it's we embed that in our values and then like also the people who are in key positions like the founders like model that why actually showing like what it means.

[00:50:28] The other thing is comes back to transparency I know that some there are some companies like Netflix and like that that's in Silicon Valley created this culture of unlimited vacation policy which really often let to just nobody taking any vacation because then they were worried that then I'll get and they will perform less.

[00:50:46] Well then they're here to go their way like we haven't done that but exactly it's like more transparent in our system everybody's expected to take that five weeks off every and then it's visible in our system that everybody that okay hey somebody's accumulating their vacation so hey.

[00:51:02] And we have the discussion what's going on you probably should be taking more time off and also we really encourage people to if they feel that for example 100% work time is too much you can easily do 90% you can do 80%.

[00:51:15] My co-founder actually does 40% right now so he's are 40% CFO and then for the rest of the time like he does like life coaching and running a hundred workshops and things like that because he has passion for that one and I by this type of thing and I do 90% myself so I also did a bit less than 100 so by this type of thing we tried to show that there's no just like one.

[00:51:36] You shouldn't work yourself to this and they're multiple different parts of contributing to our company.

[00:51:42] You just mentioned that I think the law provides employees in Finland with I think five weeks that you just mentioned right and that you that people are supposed to take but you also mentioned that you have done nine weeks it's at some occasion in some years how does that work then is that unpaid leave for the employees or how do you guys manage if someone needs to take more than the five weeks.

[00:52:05] Yeah, I think that in I think that has been partially because I so I was working 90% but then I actually would end up doing more weeks more hours and some weeks and then I would take more time off so partially that's partially the fact that there are parental leaves that I used because like when you get children then you in addition to that you get.

[00:52:24] Get that and I just distributed that over so no no special extra holidays there so that is still that I didn't want to play everybody so there's no extra take more holidays rules for the CEO.

[00:52:35] Just want to make sure I didn't imply that it's just I also know of a stewardship model in Germany here and those guys are actually providing the same like with the lawful I think I think they are providing more than the lawful I think 28 days like this that's the standard in Germany pretty much and then if you need to take more you can take unpaid leave.

[00:52:54] That's where I asked the question. So doing that model as well. I personally haven't done that but many other people in our team have also used that quite a lot so that's also something that you can always do that if you want so some people take it into form of working like a 90% or 80% time constantly and some people do it in the form of okay just take a few weeks off unpaid at some point.

[00:53:17] Well it's very interesting model and I hope the time of all is actually looking up stewardship models right now I would be very grateful if that model becomes more adopted I think it's awesome and I think it's one thought that I have that I just wanted to say here is that we have in at least Europe democratized politics pretty much mostly but we haven't really democratized the workplace and I think models like this can help with that a lot so I'm I would like to see any updates from you guys and what the kind of.

[00:53:47] How do you think about the company goes how the company goes the next few years.

[00:53:50] Yeah definitely and I also like if there's some if there's a listener who is considering like starting a business and they are wondering if this two-odd ownership model would be right for them then definitely please reach out to me every now and then I have these conversations with founders I'm always happy to share more details about our our staff and also one part that is transparent and available for everybody is all our shareholders agreements like our articles of association so all our legal documents we are going to see.

[00:54:16] We are going to see legal documents regarding our structure all of this stuff is ready available if you are interested so it's it's for finished regulation so if you are in some other country you need to you would need to adapt that a bit but I know that they are also great templates available for two-odd ownership in particular in Germany thanks to the purpose that is that is developing the model.

[00:54:35] Yeah for example in Germany the model is not well adopted at least that there is a lot of limited companies but we know of the model at least and there's a lot of resources you can use so check out Germany and Finland on stewardship models and another company I wanted to just mention shortly is outsider which is doing some like this in Norway.

[00:54:53] It's a little different but mostly doing the profit sharing in the company with the employees also interesting to check out.

[00:55:01] You have two final questions that we ask all of our guests yeah the first one is what are you excited about right now can either be technology and work related or completely not can be something completely different.

[00:55:13] Yeah I like I'm somewhat of kind of like a bird kind of like notice that I spend quite a lot of my like free time just like reading about the societal matters and like thinking about like how to evolve this system so some so that's a passion of mine so that definitely obviously some of that we are applying ourselves on an organizational level but I'm I always find it really interesting to also think about okay how could we apply these in a societal level like how what we do is really interesting.

[00:55:42] I don't like how what will be that mean for our economic system for our political process and so on so maybe maybe at some point if I decide that sharecribe is running well without me at some point that I have no more value to offer to that than maybe that's it will be the next thing for me to try to figure out if that could be applied these same like principles on a different scale.

[00:56:03] So you want to say that I'm talking to the future president of Finland now.

[00:56:09] I'm not sure that I don't think that would necessarily be my dream job maybe I want to be more the person in the behind the scenes who is oiling the oil into machine or something about that.

[00:56:19] And one last question that I have that we ask everyone is what's the one lesson or advice you would give from your journey from your experience to someone that's just starting out as Indy hacker or building public creating a company that is supposed to like is created that way that you guys do it for example.

[00:56:37] Yeah, I'm going to be a boring and repeat the point that I shared already earlier today which is that like to me still the first fundamental question if you are planning to start a business of any kind try to understand like why you are doing it if you're an Indy hacker maybe you're doing it just for the sake of building stuff and then.

[00:56:56] And then but meanwhile for some other people it really might be a way to get away from the rat race and be your own boss or potentially to get rich because like you want them the money can buy some security or like things for your family that you really want.

[00:57:09] But just really try to understand those things and try to see like what how is the way your business and its trajectory but also the way the business is structured what kind of funding needs and so on are these aligned if you are looking for an investment at some point.

[00:57:24] Is the investor are the investors interests aligned with your interest so I think that these are questions that.

[00:57:31] I had no idea I should be I didn't really realize that I should be asking this this at the early stage and then we had to figure this out later and then that we also resulted in some

[00:57:42] in some challenging conversations with our existing VC investors so because of that I feel that it would be better to have this more clarity on this earlier.

[00:57:50] I think actually that's an awesome answer and I had to suppress thinking about that when you talked about it on the podcaster will think about it afterwards now you will wear through with the podcaster

[00:58:01] Thank you so much for sharing all of the stuff all of the knowledge about your business the stewardship model and was glad to have you.

[00:58:09] And yeah, where do people find you and your company online?

[00:58:13] Yeah, so that you can find us from sharetribe.com I think there will be a link in the show notes like also if you are interested about our marketplace model and like our thesis for marketplaces

[00:58:24] also like a book that I've covered and the colleague of mine got the lean marketplace so which you can also just room for the show notes that might be an interesting for some folks.

[00:58:33] So then if you want to learn more about the steward our stewardship model we have a blog called balanced so very right more about that and also how we approach other things related to our culture and work time

[00:58:44] and so on so that will be sharetribe.com slash balance and you can find me in I noticed that I'm bit less in in X these days as I prefer something like master dawn but my master dawn handle is too long for me to remember so maybe

[00:58:59] maybe still my X handle slash K you STI is still the best way to reach me in social media.

[00:59:06] And we put all of this stuff into the show notes so people can find it.

[00:59:10] You will thank you so much for being here and have a nice day. Thank you.

[00:59:14] Yeah, thank you so much for having me. This was great.

[00:59:17] Goodbye.

[00:59:19] And that's our episode.

[00:59:20] Thank you for sticking with us to the end.

[00:59:22] You can find you who on Twitter with the handle Kusty that's K us T. I.

[00:59:27] You can find sharetribe on sharetribe.com you can find the link in the show notes as well.

[00:59:33] Please also check out that blog where you'll find articles about the stewardship model why you should work less instead of more and many other topics.

[00:59:41] You can find it on sharetribe.com slash balanced.

[00:59:45] You can find me on Twitter with user name icebellets this I see B E A R L A B S.

[00:59:51] We have a website you can check out go to code and conquer dot F M to find out more.

[00:59:56] You can find this podcast on Twitter, TikTok and Instagram with the handle K.

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