The Meeting
We went through the niceties and the hellos and then there was the silence of not knowing how to start. So, I started.
I am sorry to surprise you with the news that I knew about your plans, but there is a valid and innocent reason…
After my explanation, the man seemed more relaxed and the woman offered coffee. This time I accepted to give them time to digest.
In the meantime I told the man that I had been to Ginole les Bains and found it beautiful and very relaxing.
Did you stay in town? Where?
At the old bathhouse.
At the sound of that, he leaned forward as if to ask something, but he was interrupted by his wife coming back with the coffee.
Black and no cream, right?—She said in a happy tone.
Right! Thanks.
She sat down with a nervous smile on her face and glanced at her husband.
We have not decided to sell, yet. We haven’t even gone out to look for buyers.
But you prefer to sell it to your employees.
Yes! She said right away, looking excited.
That’s OK, because I don’t want to buy it. I am here to find out the financial terms and, if need be, to loan them money.
Oh.
M’dieu!
They both looked worried now.
We were going to tell them anyway. In fact…
She glanced at her husband and he subtly signaled agreement with his eyes.
We prefer to tell them ourselves.
That would be best. I felt awkward coming here anyway. Now let me explain what I see as my involvement—I paused for a bit and thought about what I wanted to say and how I wanted to say it—I intend to help them out with the finances, the money part, but I don’t want to expect any power over the company in any way. Except, maybe, they should reserve three chocolate eclairs from me.
Finally, we all got to smile and relax a bit.
What do you mean you don’t want any power for your money?
Hmm. This may sound weird to you, but I am more interested that they and the community succeed. I’ll give them what I call a Radical investment. This means that they have to pay back the amount of money I give them plus a small interest. I’ve made a couple of these investments before and the “something more” is that we take my interest, usually 10%, and the co-owners match it we end up with 20% of the investment in a pool and then distribute it to everybody based on their… contributions.
And then you decide? or they vote? How do you decided their contributions? Besides, waiting until the very end… I don’t think that works!
No, that is not quite the way it works.
Then, how does it work?
OK, if you are interested, I’ll give you the whole tour of how RADs work.
Contributions (Not Capital)
OK… RADs are not digital money or anything like that. But, forget that for now! Let’s start with contributions. Normally. you do something good, the boss notices, and he gives you a pat on the back. If he likes you, he may even give you a promotion later. That makes it more tangible, right? But what do you do when you are all owners and there is no boss…
Go ahead. We are interested.
That is how we run the store, n’est pa?
Yes, but not really.
Yes, really. We train them and then they take over the store. They ask some questions, but they do very well on their own.
OK, but you can’t run the bakery that without a baker.
Yes, you’ll have to have a baker. Maybe they all become bakers and can back up each other.
Oof.
That is how Arizmendi works.
The hippie bakery in San Francisco.
Yes, that one. And it is very successful and very profitable.
And it gives me a headache.
She looked at him sternly and then she turned to me,
Actually, we tried that, but it didn’t work. It ended up being very chaotic.
Yes, it can happen, but it doesn’t have to. I am the cofounder of a business that is over 800 people now, but it has no bosses; it is very profitable, and it is not chaotic at all.
That made them sit up. I guess I had credibility with them now.
So, what happens without a boss.
People recognize each other’s contributions directly.
What are the rules?
There are no rules. Whatever a person feels is a contribution, is a contribution.
Say more.
RADs
The contributions that you give reflect how you feel about what you see happening. You see behavior, you feel enthused about it, and you press the ‘contributions’ button to your heart’s content. You see behavior, you feel it is wrong, and you press the ‘we need to talk’ button. But we want these contributions to be tangible, not empty backslaps.
I paused for a bit.
To make them tangible, you have to convert them to RADs. If somebody has 20% of the RADs, they get 20% of the profits. If the profits were $100, they get $10, but if they are $1,000, they’d get $100. Rather than converting directly to a currency which is fixed, we convert them to RADs because because they factor other things, like money. Next month you may have 20% of the RADs and then you’ll get 20% of the profits.
I think I understand the mechanics. Still, it sounds a bit complicated.
It is different, but really not that complicated. National currencies are more complicated, except the complication are hidden to “little people” like you and me.
That might be true, but I would like to hear more.
I noticed that the man was looking into the distance, so to speak. He must have been thinking intensely.
More Complications
In the Fiat system profits usually go to the owner. In the Radical system, the dividends get distributed among all co-owners according to the amount of RADs each has.
The man looked uncomfortable, though he wasn’t saying much.
I should add that there a RADs! mobile app that takes care of all these ‘complication’
Aha, … THERE IS AN APP FOR THAT!
He tried to hold back, but then he let out a full laugh. I took that as a sign that, at least, he was less tense. Progress.
Yes. The app let’s you recognize contributions as soon as you see them. This means that you don’t have to wait until the end of the month to vote or any such. And you don’t have to deal with the mechanics, like converting contributions to RADs—the app does all that. When it is done, the app records all transactions so everybody can see them.
Punishment
Can I take RADs away?
You might be asking if there a way to punish somebody, is that it?
Yes, motivate them to do the right thing. You have to make sure that things are done the right way. Some form of punishment is very good for making people learn the correct way to do things.
Do you have kids?
Yes
Do you love them?
Of course. Yes.
Do you beat them into submission every time they do something you don’t like?
Enough of that. That is not what she said….
She looked at her husband with disapproving eyes and said,
Lucien, please.
Then she looked at me and said,
No, I don’t beat them with a broomstick when they do something. I teach them what they did wrong and why it is wrong.
We all felt silent after she said that. The man had his arms crossed, lost in thoughts; as was she.
I felt that we had crossed a significant line.
You know, it became chaotic after we started yelling at each other… all that yelling. All that fear, yes. Something goes wrong and people try to get control. It fell apart.
It fell apart because all the yelling.
I felt my eyes swelling. These people had made quite a leap in an instant. They had realize what had made them fail earlier. They have made their daemons visible.
So, no punishment.
She was looking at her knees while she said that.
No punishment.
He was looking sad and looking her way.
Instead of taking RADs away, there is a button for asking for ‘a talk’.
Of course.
She said it quietly.
If you talk to the person and the offending behavior doesn’t change, you and your peers will likely stop giving this person RADs and eventually they will leave.
Go away. We don’t love you anymore
The way he said it, it was a statement, an announcement to the world.
I nearly fell off my chair when I heard that because love is at the root of having people learn new things. They figured all that out in a blink of an eye.
Can We Invest Like You?
Can we invest, too, the same as you.
Of course. Like everything else, it is up to you.
We thought of selling to our employees for a lower price, but this means that we can sell it for a normal price but take less money up front. I am not sure I am explaining myself correctly.
Perfectly clear. You sell it for $100, but expect only $80 dollars and the other $20 would be a Radical investment.
More like $50 dollars
She said as she looked at her husband.
Yes, something like that.
Whatever the amount, that would work wonderfully.
Result
What I have done with my Radical investment is that if the co-workers are willing to match the 10% load that we have agreed to, then we put that 10% and their 10% in a pool and distribute according to RADs.
Sorry, but I don’t understand.
I don’t understand, either.
I do that because I figured that they have been working hard to repay the investments and this may be the first opportunity to get the full impact of their RADs and all their effort. They are co-owners, but that may not be significant enough at this point, but a Distribution will. I’ll get some money out of it, too, but the impact on them is the precious thing.
I paused for a bit and then I said,
I should tell you that none of my investments have matured, yet, so at this point they are just experiments and ’pool’ that I talked about is just a hope.
Nice. Very nice hope.
Settled!
Finally, we had everything in hand. The amount was settle. They owners were carrying 25% of the debt with a 5% interest which could go into a RAD Distribution fund, if the co-owners matched it. A baker from Arizmendi had agreed to be part fo the team for a year, and train them as bakers. The old owners would have a two-month overlap with the new co-owners in person and then they would be available for questions, but remotely. I carried 10% of the debt. The rest would come out of cashflow.
Lots of drama on the way, but all for the best.
Bye, Bye
The day came for the old owners to head for the airport, six weeks later than they thought. They closed the shop for the day and the new co-owners organized a caravan to take them. Everybody was still very positive. Come to think of it, only one person chose to not participate and left, but the rest of them were very enthusiastic. Even when they had to sit down with their accountant to pay their quarterly taxes. As it turned out, Pris and Vicky were most interested in that aspect of the business and rose to be leaders of that particular task. Andy and Mario emerged as leaders of ordering supplies. Martha took over decorations, with the occasional help from Pris.
Nervous Smiles
It was all roses in the storefront, but the bakery was another story.
The Arizmendi baker had to leave sooner than expected to take care of her family. She committed to be on hand for advice, but even that was not working out so well because of her particular situation. Her RADs continued to yield enough to take care of her, but the shop needed help. They looked for other more experience bakers, but they just wanted to buy the shop, not help. Business had been going down a bit, but they still had most of their staples, including my chocolate eclairs. In any case, the co-owners were on top of it: they caught the situation early and they supported each other to find solutions. The discussion got loud at times, but they were learning how to voice her fairs and to help each learn. They even had a safe word that somebody would call out to calm things down.
They changed some things based on their first-hand knowledge of the business. For example, the “french” napkins and aprons were not a big seller, so they took their stand out and added an inside table. Martha hung the aprons on the wall in a very attractive, “french” way and they were selling more that way. They created a coffee menu that people could browse while they were in line. They started the practice of bringing out a tray of their new creations and let people sample, but what they were really doing was testing their new goodies.
They could bake alright, but they could not recreate all of the smells and flavors that they had before. They never stopped learning from trial and error, but business was stagnant. So Luc came back for a few weeks and got the smells and flavors back consistently. He got lots of RADs for his contributions. He helped turn nervous smiles into real smiles. Then he left.
Back on Track
Is this the last payment on the debt? That means you are early!
Business is great. The RADs’ yield is going up for everybody.
Wow…
In fact, we don’t even have a PRI fund any more. But now we have to pay them and you to retire that debt.
Look at you, ‘PRI’ and ‘retire’ in the same breath. That is fantastic.
Don’t say that until you get paid back.
Vicky was laughing out loud.
And, by the way, we are going to put our 20% in the RADs fund to have an extra distribution. We could even reduce your number to %5, instead of 10%, to make sure that your investment grows by 5% for sure.
We could do that. Let’s wait until we crossed that bridge.
We’ve already talked to the people in France and we are going to switch them so they have a guaranteed steady income forever. This may not be purely Radical, but…
Congratulations, you have made Radical your own.