- Create a sustainable business model that can be adopted and
adapted by others.
- Create a fair and democratic company that is owned by the
- Have long-term, trustworthy and meaningful relationships with
our staff and customers.
- Egalitarian: The belief that all people should
be treated equally. This includes equality, non-discrimination and
- Sustainable: We have a long-term view on our
business. We watch our profits & spend wisely, we take care of
each other, we support the things we depend on.
- Transparent: We communicate in an honest and
genuine way. Any information or process that can be made open, will
be made open.
- Fun: Create a workplace where people can have
fun and want to work.
- Agile: Be flexible, receptive & adaptive,
especially when dealing with staff and customers.
Concrete tools for helping us live according to our principles,
- Consensus-based decision making.
- Corporate transparency - any information or process that can be
made open, should be made open.
- Licensing that helps benefit our company, our staff, our
customers, our partners and society at large.
- Profit-sharing with staff, contributors and worthy causes.
- Don't try to change people. Focus on getting the best from
their strengths. Develop ways to work around their weaknesses.
- Prefer to work with people who share our values.
- Work against patents and other legislation that harms
Some employee roles may have different requirements
— for example, someone working on customer
support may need to have regular hours. Of course, any differences
need to be noted explicitly in the employee's contract in a section
that clearly details any differences from the standard
- The Employee works in distributed company and may work from
- 75 working hours per two weeks. Ideally, employees should work
schedules that are kind to them and to others.
- Equal free (vacation) time; Everyone has 35 free days a year +
Saturday & Sundays. (This is basicly Finnish 5 week vacation +
10 (avg) weekday holidays). Note that this means that one should
use a free day if one wants not work any Monday-Friday even if it's
a public holiday in your country! Up to 25 free days will roll over
to next year (ie, the vacation part not the public holiday part);
If the employee quits or is let go all saved vacation money will be
paid out. One earns 25/47 vacation days / week of active work (This
is used for the first and last year of employment).
- Vacation money ("Lomalta paluu raha"). When you go on vacation
that is more than 3 weeks (or have used more than 3 weeks of your
vacation for the year) you get an extra 1/2 month of salary. If you
don't keep your vacation the vacation money is payed at the end of
the year under 'get a life' bonus plan.
- The employee will get a shared copyright to
all code and documentation they produce according to the spirit of
the Sun's SCA license agreement.This doesn't include confidential
code/documentation or code/documentation that we do for customers
that require full ownership to the produced
- 80 / 20 rule; 80% of the time the employee should work on
scheduled tasks. 20% of the time they can work on any tasks of
their choice, as long as they will generate revenue, make employees
more efficient, or enhance company recognition in a 2 year window.
The 20% tasks need to be approved to ensure they follow the above
- The employee needs to be transparent with everything they are
doing. Transparency makes the employee responsible to their peers,
and makes them accountable by their own statements. It's also the
best vehicle to create trust.
- The employee needs to do a weekly report that includes
everything they have done during the week, their plans for the
upcoming week, and also any ideas they may have (half-baked or
ready-to-use), that they would like to discuss with others. The
weekly reports should show clear progress in the employee's major
- The employee must speak up if the company is
doing something they think is harmful for itself, its employees or
customers. It's crucial for the success of the company that the
employees are 'on board' with the vision of the company. Politics
are strictly forbidden!
- 2000 Euro hardware allowance at start of position (for laptop,
- 1000 Euro/year hardware allowance for everyone that requires
new hardware to be be able to do their work.
- The equipment bought with the hardware allowances (and any
other negotiated equipment) will be transfered to the employee
after 5 years.
- The salary should be competitive in the area where the employee
is located. The bonus plan is not dependent on where employee is
- If an employee has been of significant help in getting /
delivering a customer order, they are entitled to a bonus for this
work. Everyone involved in a sale will share 5% in the 'price -
cost of sales' portion of the sale (in proportion to their
involvement) and everyone involved in the delivery will share
another 5%. However, any such bonuses will be deducted from their
part of the year-end bonus (provided the company was
- Each employee will be assigned a VIP number of 1-10 (10 being
the highest) to describe their importance to the company. This
number is used to calculate the end of year bonuses and
'sell-shares'. The VIP number is agreed to when an employee joins
the company and will be reviewed yearly by their manager. The
employee will get directions on what they can do to increase their
importance to the company (and thus their VIP number).
- The employee must be able to communicate fluently in English
(at least in written form). If necessary the company will sponsor
English classes for employees that want to improve their speaking
- The employee is assumed to be cost efficient. This means they
should prefer to use:
- Cost efficient communication tools like Skype and VoIP.
- Economy traveling tickets.
- Medium priced hotels, rental cars, and restaurants.
- When traveling they should strive to stay over at their fellow
employees' places and/or share rooms with their fellow employees.
(This item can be overridden with a 'good cause' by their
- If the employee wants better hotel, food, traveling
arrangements, working equipment, etc this can be arranged, but the
difference should be reduced from their salary, contract money or
- When hired, the employee will be considered as 'on-trial' for
the first 3 months. After the trial period, the Company and
employee will decide if things are working out and either hire the
employee or contract him under similar terms as if they were
- People that are not working up to expectations will receive a
warning. If the situation is not corrected within one month, they
will be moved to 'on-trial' status. After 3 months, the Company and
the employee will revisit the employee's performance and will
decide whether further employment is in their best interests.
- When an employee is leaving they can buy out any Company
equipment bought under the hardware allowance. The price is
min(market-price, 'initial-price' * max(5 - years_old,0)/5) (i.e.,
the price of the equipment is reduced by 1/5 each year).
- The Company is primarily created to generate bonuses for the
employees (not to get sold).
- The Company should make it as fun as possible to work for the
- The Company will be a distributed entity and strive to be small
and efficient. If growing too big, it will split into separate
business units or companies.
- Strive for long relationships with employees and customers.
(The Company is a Family)
- The Company needs to respect the individuality of it's
employees. If the employee has reasonable 'extra' demands they need
to be seriously considered. (For example when it comes to work on
weekends, room sharing, not wanting to travel, etc).
- The Company will employ people based on their merits. They will
not be discriminated based on their gender, race, religion,
location, marital status or whom they have married.
- The Company will not require people to work on weekends. The
Company has the right to ask the employee to work on weekends, but
the employee has the right to refuse without any consequences.
- The Company will actively encourage its employees to take out
their vacation and not save it for later. This is especially
important for employees that are "burning out".
- For time-critical, highly-paid, highly-profitable projects that
require double working hours, the Company will pay three times the
salary and/or offer paid vacation days.
- The Company will, whenever it's possible, largely let the
employee choose their own work, instead of being told what to do.
By letting the employee set their own goals, they are more likely
to meet them. When working on a chosen project the employee needs
to work with the team lead, but after the project is done, the
employee should decide on what to do next.
- The Company needs to be long term cost efficient in its daily
operation. This should be considered when choosing software, phone
usage, equipment, etc...
- The Company will not censor employees' opinions or try to
hinder employees from expressing them. The Company should provide
appropriate forums for the employees to discuss anything work
- The Company should budget for at least 3 traveling meetings for
every employee to ensure that people can work efficiently and get
to know each other. One of the meetings should be an all company
- The Company will recognize the importance of spouses/family
members in a distributed environment and have the following spouse
- The spouse is encouraged to attend the all company meeting. The
Company will pay half of the spouse's ticket and allow the employee
to share a hotel room with their spouse (at no extra cost for the
- The spouse is invited to up to 4 dinners/year (if employees are
gathered over dinner).
- In the above rules another family member can be substituted for
- The Company will actively help and sponsor open source projects
(see bonus plan).
- The Company will strive for having as much of its plans and
information publicly available. All rules of the Company will be
made public on its web site.
- The Company will respect the privacy of the employees. It will
not read, without explicit permission from either the author or the
receivers, any employee emails that are not sent to an email list
and it will not read any logs from any private (query) IRC
- All software produced by the company will be open/free source
(with the exception of classified customer projects). At equal
profit, the Company will prefer to do open/free software
At end of year the profit will be distributed as follows:
- 45% will be saved for expansion
- 5% will be donated to open source projects. The project(s) will
be chosen by the employees of the company by voting.
- 5% will be used to support charities. The projects will be
chosen by the employees of the company by voting.
- 20% will be used to pay off existing debts.
- 20-45% (depending on debts paid) will be given out (as bonus,
dividend or some other form) to employees and investors based on
their VIP number and the number of working hours.
The bonus for each employee is calculated as follows:
employee_profit_hours = employee_working_hours*VIP
bonus= profit/(SUM(all employee_profit_hours))*employee_profit_hours
An investor which has invested 100,000 Euros is treated as an
employee of VIP level 5 that has 37.5 hours a week for 47 weeks.
And the investor should expect to get at least 8% as 'bonus' from
the bonus pool. If they get less, the missing money will be added
to their loan.
At end of year the Company will distribute 100,000 'semi-shares'
to its employees and active investors, in proportion to ones
'employee_profit_hour'. This share does not have any other rights
than if the company would get sold then the money paid for the
company (minus all costs, investments, loans etc) will be
distributed among all semi-share holders.
At end of the year the Company should strive to pay off (part
of) its investors if it doesn't expect to need the money within a
2-year time frame.
(Note that these are only guidelines and may be changed.
However the changes MUST follow the spirit of the original
The Company is led by a CEO. Their actions are governed by:
- An advisory board that is a team of external chosen
- A governance team, consisting of members from the employees and
the advisory board
The purpose of the advisory board is to give good advice to the
CEO and the employees of the company.
The purpose of the governance team is to give directives (that
must be followed) to the CEO and suggest changes to the rules and
decisions processes. The governance team has the right to fire and
reinstate people (including the CEO).
The Company will be led in an open and democratic fashion:
- All (not customer classified information) information will be
public inside of the company. This includes salaries, bonuses,
shares, birthdays, etc...
- Decisions will be done in a democratic fashion and all
employees should have a chance to have their say in things that
matter to them.
- In cases of disagreement things should be resolved by voting
with the 3 vote rule; 'Yes, No and Never'. A decision should
normally not be taken if there is a single 'Never' vote. In
exceptional 'life and death' cases, after thorough discussions have
been had and after all other options are exhausted, a decision can
be taken even if there are 'a few' 'Never' votes, if 50% of the
company will vote yes to the proposal.
- Company should work according to the motto: "Do good decisions
fast but be prepared to quickly change course if there is a way to
do it." This implies that the following should hold for
- If requested, the decision makers need to clearly define the
basis for a decision and provide means for proving/disproving that
the decision is in the Company's best interests. If a decision is
proved wrong, it needs to be reverted and the decision makers need
to analyze why it went wrong and take steps to ensure that it won't
- The Company should learn from its mistakes and its successes.
It should strive to repeat its successes and avoid its mistakes in
The rules of the Company can only be changed if at least 75% of
the Company employees are not opposed to the changes.
The owners of 51% of the voting shares in the Company (initially
only the founders) have the definite power to say 'NO' to any made
decision that doesn't have 75% of the employees behind it. They can
also propose new decisions that will be be taken if 51% of the
employees stand behind it. This rule can only be changed with 85%
of the voting shares.
This document is in Creative Commons
Attribution-Share Alike 3.0. Feel free to share and modify
These rules are not written to be in accord with any given law
nor are they supposed to be valid in any given country. The idea is
that each employee will get an employment contract that is tweaked
according to the laws in their jurisdiction to provide them
benefits and responsibilities as close to this document as legally
Other companies using these rules should refer to these as the
base rules, and then just have additional rules or small tweaks to
these rules. For example, a French company may want to stipulate
that the common language in the company should be French, not
If your company subscribes to these rules, please add a link to
this web page! If your company has some different or additional
rules, please keep them on your own page and refer to this page for
the default rules.
Created by Zak Greant and Michael Widenius. It was first
published by Zack
Greant on his blog. (The link appears to be dead now, leaving it here for
Some of the entries were inspired by The Tao of Linden.
Here are some user-contributed translations of the Hacking
Business Model into other languages.