Ask HN: Is an Autonomy Fund a viable business model?

It’ll encourage mid-growth companies. See: bit.ly/16guxvy. I want this thing to generate some Real Technology, and focus on hard problems instead of social media bullshit optimized for instant results. It’s for the mid-risk 10-40%/year growth range that’s underserved by existing finance.

An Autonomy Fund’s like so: engineers get a base salary (say $125k) and the investors get a percentage (say 37.5%) of any profits they make. What do they work on? Whatever they want. Their own projects. Consulting. Startups. The fund owns part of it, but they have full autonomy over what they do.

One idea here is self-organization. If two teams decide to work together and pool resources, they can. Since they're collectives of autonomous individuals, they don't need to worry about the (morale-killing) processes of merging HR structures and org charts. They just pull together and work.

Who’d fund it? I think local governments might. (Am I right? Or off the mark?) It creates jobs, supports local businesses, and may build the next Facebook.

I see this as the ultimate symbiosis between cities and tech. They want to make their cities tech hubs instead of having all the action go to star cities. We’d vet programmers, something a non-programmer can't (cf. Design Paradox).

I'd aim for top-5% “10Xers”, with initial class size ~28 and a 2-year initial runway ($7 million). If the pilot succeeded, then similar funds could be launched all over the world, and there might be a business in setting cities up with their own Autonomy Funds.

Is this something that:

(a) local governments would support, and

(b) a substantial number of top-5% people would join, even if it meant moving to a small city (~50-250k inhabitants)?

The key is to find a city on the cusp of making a serious decision to pursue becoming a tech hub. Google Fiber could be an incentive, or it might make them complacent, who knows? Maybe Provo? You can't really aim too small, small towns have serious conservative budgets and for good reason.

Austin would be nice, I'm not sure how insecure they feel about their status as a tech city compared to NYC and SF. What I can tell you for sure is that they are seriously affordable. You can trivially get a house for less than $200k in a decent neighborhood. That they're already competing for the tech city thing is a bonus.

Google Fiber in Austin could end up bringing in some fresh blood, even if it doesn't make that much of a difference on its own.

Austin has a $3.1 billion budget, which makes this more feasible for them than a sub-$1bn budget city. $25mm planning and development budget.

https://assets.austintexas.gov/budget/12-13/downloads/Vol_I_...

See here to see their job development efforts.

Anything involving as much money as this does is going to have be sold as a job development play. I don't know if that argument can be made yet or not, I'd need to discuss it.

Disclaimer: I'm headed to Austin as soon as I'm freed up in my consulting work to do a startup.

It's definitely a job development play. These engineers are going to be founding companies that, if successful, are going to employ large numbers of people.

The trust issue is why local governments might be the best place to start:

(a) they know they're not technologists and can't evaluate 10x programmers. I can. I think I can either (i) establish that I can, or (ii) bring someone more established and better than I am to do the vetting.

(b) even if they fail, much of the money goes back into the city, which means it's not totally spilled on the floor. Fail case: those tech bozos made fools of themselves, but they ate at local restaurants for a couple years.

It wouldn't only be local investors. I don't want short-term investors in this, though. I'd take a Buffett-esque approach of having the share price around $50,000. Value investors only, because talent takes time to ripen.