by Mike Piraino, CEO

When I was first introduced to Exbiblio, I was somewhat awestruck by the breadth of the vision. I’ve found that this is not an uncommon response when people learn about what we’re doing and how we propose to do it. The creative genius behind the concept is undeniable and there are clear paths to revenue—not your usual great idea desperately searching for a business model. On top of that, the company (read Martin) was savvy enough to create an explicit, detailed, long-term view of just how this vision would be implemented and monetized over time and build an extensive patent portfolio to protect the world of opportunity this vision opened up.

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I’ve been ringing round the Exbiblio team looking for reaction to the news of the retrenchment and staff cut-back. Not everyone has been at their desks, but this is what I’ve been told so far.

Brydie Ragan, who has been just five days into her job as Exbiblio’s “hardware evangelist”, says that she was still learning about Exbiblio, its people, and its projects. Even so, she wasn’t bowled over, as she’s worked on startups before, including one of her own, and “there are always surprises”. She adds that it’s just part of “life’s great adventure.”

Engineer, Brendan McNichols, tells me: “In a sense, I’m not surprised because it’s a startup and we’ve been spending a lot of money on a piece of hardware that was ridiculously expensive to bring to market. Where the surprise comes in, is that just a week previous, things had been seeming to be going okay. We’ve been getting software stuff on track, and then we’ve been hiring , and usually that’s a sign that things are going well.”

Ian MacDuff, the engineer who has been co-ordinating the relationship with contractors Synapse, tells me that he has been discussing with Exbiblio’s management how to wrap-up the hardware project. He suggested that they should document the oPen’s architecture and explain how it works. However, he adds, “I’m not feeling hyper-motivated. I would like to be, but I’m pretty disappointed about the whole thing.”

(update) Lauren Summers tells me: “I was surprised at the announcement last week because it was very sudden, and am sad to break up from this team of people. I do hope Exbiblio can figure out a way to make it work. The growing idea of the (working) device over the past months, and seeing each new development, makes the idea of not using it soon feel like a loss.”

Adam Behringer will be writing shortly about his own impressions.

Speaking to a couple of others off-the-record, I get the impression that there is not a huge deal of surprise about the event itself – these things happen in startups – but the timing and suddenness was unexpected. There is some bafflement about why the management appeared not to know about potential problems – even to the extent that they were hiring recently.

by Jeremy Faludi

Now that we’re using a metal extrusion for most of the main body, we also need to use some glue to stick plastic bits to it (such as the window you see the display through), since there just isn’t enough room in the tiny body for strong snap-fits. This makes recycling harder, for two reasons: first, because now the device is harder to disassemble into its component materials; and second, because now the component materials will have some gunk on them (adhesive residue) that cause problems in recycling the metal or plastic.

Don’t Be Too Strong

Fixing the first problem is fairly simple: you just use weak enough glue (or a small enough amount of strong glue) that whoever disassembles the device can just pop the parts out by hand, overwhelming the strength of the glue. This way, disassembly doesn’t take significantly longer than it would with snap-fit parts. If the glue is too strong, you have to pry things out with a tool, or (if the glue is stronger than the plastic itself) you have to release the glue somehow. Most glues can be released by dissolving them in nasty solvents like acetone, or burning them off in a furnace, but some glues dissolve in water, and other glues melt at low enough temperatures that your plastic parts won’t be affected. The advantage of dissolving or melting your adhesives is that then they can be removed from your parts, avoiding the problem of getting gunk in the recycling furnaces.

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Martin King told me about Exbiblio’s innovative share option scheme on the ferry leaving central Seattle. I recorded his thoughts using a digital recorder, and he tells me that one day I will be able to use the oPen which will include a voice memo facility.

He feels passionately that the option scheme is central to Exbiblio’s values, and he hopes that it will be emulated by other companies and help redefine American capitalism.

“The historic model of options in early stage technology companies is the American lottery culture model,” he tells me. “The first 20 people to join the company win the lottery and end up making $5 million to $10 million to $20 million dollars each by sheer luck. And that is a terribly costly outcome both for society and the natural world.”

“To put those kinds of extreme resources in the hands of individuals to the complete neglect of competing interests like the natural environment and society is just not a model that works in the world. It doesn’t address our needs.”

Bearing the above in mind, Exbiblio has devised a share option scheme to provide motivation and opportunity to employees, while also taking into account competing interests.

Employees at Exbiblio who qualify for the scheme receive options in two forms. Half their options come as a traditional right to buy Exbiblio shares at a certain price. This part of the scheme is more or less like the majority of share option schemes, with unlimited upside for the employee if the company prospers.

However, the other half of the share option grant has a capped upside. Once the company is deemed to be worth $100 million in total, Exbiblio’s non-for-profit foundation, Compendia, will have a right to buy out this part of the employee’s grant. The employee will receive fair value for the shares at the time. If he or she holds holds half a percent of the company in this part of the scheme, then it will be bought out for $500,000. However, from that moment on, the shares will belong to Compendia.

For example, should Exbiblio ever be worth $1 billion, then the half a percent that Compendia has bought from that employee will be worth $5 million. This money will be spent by Compendia on environmental causes, thus achieving the aim of sharing a company’s success with the world.

Here’s a speech which I think is worth quoting at some length:

Many people seem to think that companies only exist to make money.

Well, companies do need to make money – to reward those who trust us with their capital and also to enable us to invest for the future. No business can exist for long unless it makes money.

But making money really isn’t the purpose of business.

Our purpose is to supply the goods and services which people want to buy at a cost they can afford. If a business can’t meet the needs of its customers it will cease to trade.

Those needs, of course, are not expressed through a single transaction. Business is about meeting customer needs again and again over a long period of time and building a relationship which enables the business to respond as the needs change.

That means that to be a sustainable business you have to look at the challenges which are facing your customers.

You have to examine the things which threaten the sustainability of the relationship. And in a spirit of mutual advantage you have to examine what you can do, as a business, to remove those threats. To make the relationship sustainable. To ensure one transaction leads to another, and another.

That’s about relationships with individual customers and with the communities of which we are part.

Business is part of society. Business is affected by what is happening in society and business can and should be an active agent of change and progress. Meeting challenges and offering new and better choices.

I’ve often heard Exbiblio’s Martin King say similar things, but this quotation is from a speech by the CEO of the world’s third largest oil corporation, BP. The speech by Lord John Browne was entitled, “Sustainability – A Pracitcal Agenda.”

It’s always nice to know that you are in good company

Exbiblio has recruited an evangelist for its oPen hand-held scanner due out next year. Her name is Brydie Ragan.

Brydie’s career resume made quite an impression at Exbiblio. Her many achievements include developing the East Coast Sales channel for Aldus Corporation, where she managed strategic co-marketing relationships with Apple, IBM, and numerous computer dealers.

Later she helped set up the design and communications firm, Bridgemark, but as you see from this extract from her resume, her interests range far and wide and include Exbiblio’s passion for social responsibility. She is a true “Exbiblio” person.

During my years as co-owner of Bridgemark, I made a personal commitment to social responsibility. Two of my first steps included joining one of the first Community Supported Agriculture farms in America and living without a car in a small city that had no public transportation. In addition, I also became a mentor for Project Soar, a program for women on welfare who were starting entrepreneurial endeavors.

I also decided to heed Thomas Jefferson’s advice to practice “eternal vigilance.” I started by making a commitment to attend all of our city council and school board meetings for one year. After sitting through the first city council meeting (for over four hours), an elderly council member approached me and asked, “Oughtn’t ya be home with ya husband at night?” I will never forget his question, which I now see as the deciding moment that marked the beginning of my deeply-ingrained habit of civic involvement.

During my years as a citizen activist, I have become involved in many issues, including land use and planning, affordable housing, and education. I have attended countless public meetings, conducted research, and written and designed reports, press releases, fliers, and newsletters for many causes and citizen projects, suffering through my failures and delighting in my successes.

In addition to my volunteer work, I incorporated activism into Bridgemark’s business by designing, producing, and distributing a kit for refusing junk mail. I succeeded in selling thousands of kits nationwide with virtually no advertising because I was able to gain national publicity. Substantive articles about the kit appeared in the Christian Science Monitor and in many major city newspapers, prompting stores such as Urban Outfitters, the Boston Museum of Science, and Ben and Jerry’s company store to retail the product.

My effort to reduce junk mail also resulted in invitations to speak publicly about the effort. One of my most memorable speaking engagements was at Dartmouth College, where I enjoyed a meal with the Club of Rome author, Donella Meadows. Luckily, public speaking had been an integral part of all of my work as a professional, so I thoroughly enjoyed this opportunity,and others like it, to generate interest in the issue as well as sales of my product.

Somewhere in the Exbiblio HQ there is, or used to be, a meditation room. I believe it has been used for yoga and naps, but not very often, and is now an office.

It seems that praising the Asian way of doing business is back in fashion (it rather went out of fashion during the long years of Japanese deflation). I think the team at Exbiblio would be interested in this post about Apple, Buddhism, Design, and Corporate Culture.

by Jeremy Faludi

This week’s episode of green design for Exbiblio is about metal. They recently decided to change plans about how the first release of the oPen will be made–instead of the whole body being recycled injection-molded plastic, most of the body will be an aluminum extrusion with holes machined into it for the screen and buttons, and there’ll just be plastic bits on the ends, much like an iPod Nano. The reasons for this had to do with schedule and design flexibility–we have a very tight schedule to make, and need to get to production as soon as possible, but still have not nailed down all of the design considerations. Using an extrusion with machined holes gives us a great deal of flexibility, as machining can be reprogrammed at any time to cut different holes, and extrusions are fast and easy to get into production–easier than injection-molding.

Using aluminum instead of plastic does increase the device’s environmental impact, in three ways: first, aluminum is more energy-intensive to produce than plastic; second, it’s more energy-intensive to manufacture with and requires harder tooling; third, having the case be made out of multiple different materials makes it harder to recycle because it needs to be more carefully disassembled and sorted. With a device this small, we need disassembly time to be extremely short, otherwise it won’t be worth anyone’s while to recycle it, because the amount of plastic and metal you get for the amount of time spent is small. I’ll talk more about design for disassembly in a later post.

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Here’s a list of businesses that Exbiblio would surely like to join – The Green 50 – as chosen by Inc.com.

Inc.com runs through some of the issues: High oil prices, global warming, the sense that chemicals cause real harm and the earth’s resources are indeed finite. It concludes:

These are not so much charitable causes to embrace as they are problems that entrepreneurs can solve. Wall Street and Silicon Valley certainly understand this: Venture capital firms invested $958 million in renewable energy companies in the first half of 2006 alone.

Exbiblio is committed to Green Design, but it hasn’t got a product that will ‘save the planet’. Instead, it’s going down the charitable route with its Compendia Foundation. I am told that if Exbiblio fulfills its ambitions, there will be a significant amount of capital available for Compendia and the environment. It’s certainly a different approach to Green Business from that chosen by most of the Green 50 – but Exbiblio is never one to take the obvious or easy path, and I have to say that it is one of the things that motivates people at Exbiblio in their daily work on the oPen and its associated software.

Although it is based in Seattle, Exbiblio is legally a Dutch company. Compendia, the non-for-profit fund associated with Exbiblio, is also based in the Netherlands. This set-up obviously involves some extra complications and expenses, but the founders believe that the values and the social system of the Netherlands are more closely aligned with Exbiblio’s than the those of the USA. I have even heard long term plans for the headquarters and bulk of Exbiblio’s employees to be located in Holland. By the way, although Exbiblio is a start-up, it has a lot of “vision” about how what it’s going to look like when it is a big company.

As it has happens, there has been a big discussion raging on Slashdot along similar lines. If a US citizen wants to go and find a better place to live, should they move to the Netherlands? You will find a variety of views and perspectives on the Dutch immigration and taxation systems.