Fans of Elon Musk know that in addition to his primary projects of Tesla and SpaceX, the seemingly tireless Musk has also espoused the construction of a hyperloop. The hyperloop is a vacuum-like transportation pod that if successful, could whisk passengers from say, San Francisco to Los Angeles in just over half an hour. Pretty mind-boggling, if it works. And Elon Musk has certainly proven he can execute on bold ambitions, so I wouldn’t write this one off just yet.
However, Musk isn’t actually building the hyperloop himself (what, no spare time, Elon?). The endeavour’s main construction is being handled by a firm called Hyperloop Transportion Technologies (HTT). This is where it gets interesting. HTT has managed to attract over 420 high-caliber people — ranging from physicists to designers, software engineers to architects — without paying salaries.
Yes, you read that right. Over four hundred expert individuals, whose collective wages on the project to date would reach into the tens of millions of dollars, are working for HTT without a wage.
Are these smart people out of their minds?
Well, first of all, these skilled people are not working without any compensation. They receive stock options, which do not represent a cash outlay for HTT but could one day be extremely valuable for the recipients (or, they may wind up worthless). Most of the staff of HTT do not work full-time either. The minimum commitment is only 10 hours per month. Team members can work from anywhere in the world too.
Think about it: this makes a ton of sense. Building a hyperloop is an audacious, complex feat that requires deep expertise in a range of disciplines. People that possess such expertise are likely very expensive to hire, and similarly quite unlikely to risk their livelihood by jumping full-time into such a laudable yet risky endeavour. They may also be scattered around the globe.
Another cool aspect of the HTT venture is that it enables networks of people from all over the world to contribute to the project. A team comprised of people with diverse, complementary skill sets and viewpoints, working on a part-time basis, can prove substantially more effective in solving complex problems than a small team of full-time specialists. A simpler, more fundamental incarnation of this phenomenon is a service with which we’re all familiar: Wikipedia.
HTT’s crowdsourcing model represents a radical innovation to the traditional corporate structure. Coincidentally, last week’s issue of The Economist leads with a piece on how the corporate structure is want for reinvention. Disruptors across industries, such as Airbnb for lodging and BlaBlaCar for transportation, are reinventing how business works. Gig economy marketplaces blur the lines between employees and contractors. Ventures like HTT strengthen the link between ownership and responsibility, in contrast with the typical public corporation whose owners are largely anonymous, decoupled from the management of the actual business.
You were right, Flip
Back when I was in business school, during the 1999-2000 tech bubble, an outspoken entrepreneur and investor in Chicago named Andrew “Flip” Filipowski preached to our classes that the modern corporation was dying. Flip created an internet incubator called Divine InterVentures (a project which he now claims was his “most disappointing performance”), and he predicted that the corporate model would soon meet its maker. A lot of us were skeptical at the time of Flip — his audacity alone turned some people off — but today’s developments make me inclined to believe that he was actually onto something smart. (Sorry I doubted you, Flip. Your bold assertions actually appear quite visionary now).
So if the corporation is due for innovation, how would we replicate this in France?
Under French jurisdiction, I wouldn’t even know where to start. Let’s say I found 400 talented, skilled individuals willing to work 10 hours per month on a complex project in exchange for stock options and no pay. Would I be required to designate these workers under a certain statut? CDD, CDI, Autoentrepreneur? Could I grant them free options or warrants that would not be considered income and provide a sufficient after-tax upside for the non-negligible risk they’d be taking by working a significant amount of time without pay? What about social charges, both on the workers’ side (charges sociales) and the company side (charges patronales)? Over to you, URSSAF.