March 20, 2001 unveils 'revolutionary' coder cooperative business plan

Author: JT Smith

- By Grant Gross -, the group of coders who've banded together to democratically create Free Software, has unveiled a "revolutionary" company structure in which programmers who join the cause will get a piece of the pie.

Called "the Community is the Company,"'s new company structure, announced today (March 20) is something like a farming cooperative, in which hog farmers pool their resources to form a slaughtering facility. But the programmers don't need to erect a building, they just work together to create software, and the proposal goes well beyond the traditional cooperative, says founder Tony Stanco.

"This goes so far beyond anything else, because it is intellectual work and international, that we don't like to compare it to anything out there," says Stanco, a former senior securities attorney at the U.S. Securities and Exchange Commission. "If we are going to compare it to anything it would be more like to a HUGE partnership of super architects. But it would be one hell of a large partnership with all the architects in one firm ... But that doesn't really get it all either, because while the community shares and builds
everything together, they are really all working on one huge interconnected project
around the world. "

Here's how it would work: Ownership of the developer cooperative,, will be placed in a 10-year trust, with approximately .8 percent of the ownership of company released to the participating developers every month. That developer cooperative will have majority control of the Free Software Marketing Company, which will be a public company with investors.

"The major innovation of the FreeDevelopers structure is that it inverts the traditional developer-marketer axis, so that the community of software developers controls the marketers," says the guide document. "The proprietary structure has it reversed -- the corporate marketers have been controlling the developers."

The proposal also calls for hardware companies to join with, to deliver better products. Customers benefit from this whole idea with "superior code development, stability, security, greater efficiencies, more innovations, less upgrades and no supplier lockup," the guide document says.

Developers don't have to contribute code to become part of the company; all they have to do is become a member, Stanco says. "For contributing code there will be salaries (but salaries come from sales revenue, so there needs to be the build up in sales first to start
paying the salaries. But as sales start happening, we can start paying the

People interested should read and sign's Declaration of Software Freedom, which promised the commercial organization. The declaration, released on Valentine's Day, 2001, has been signed by more than 620 people from places such as the United States, Poland, India, Australia, Greece, Iran, Romania, and Ecuador. Among those who've signed it is Richard M. Stallman, founder of the Free Software Foundation, who's given his blessing to (Someone calling himself William Gates has also signed it.) The declaration received some mixed reviews, with critics saying the Free Software people were stretching to compare themselves to the freedom fighters of the U.S. Revolutionary War.

Next for, founded in the fall of 2000, is feedback from the community on the proposed company and building up the membership. "Once we hear back from the community to make sure we are on the right track, we will include with any improvements/suggestions and move on to formalize it," Stanco says. has about 700 active members, who've mostly been working on projects assigned by Stallman, Stanco says. has hosted an e-voting project.

"[Number] comparisons are not really appropriate, because this is the time when we are really turning to the business side," Stanco says. "Up until now, we were laying the philosophical and ethical foundations and precedents ... Now we are calling up all the troops and are getting ready to seriously fight the war, which has to be fought on an
economic front. As such, we are now telling people what is in it for them, how they will be paid, how they will benefit. And there will be many, many more interested in how this will help them than were interested in knowing how they could help free software."

The entire developer community of 4 million people are potential members/owners, according to the guide document. "The more that join, the more powerful it becomes, and the more valuable is the company."

Stanco is optimistic that the proposed company structure will work. "I'm a former Securities and Exchange Commission securities attorney, Internet and software group, and have a masters of law in financial regulation," he says. "I think this is a very revolutionary structure."

NewsForge editors read and respond to comments
posted on our discussion


  • Open Source
Click Here!