Fellowship Operating Guide.md

FactoryX

FELLOWSHIP :: OPERATING GUIDE

FOUNDATIONAL PRINCIPLES

1. Find and operate from points of highest leverage – We strive to find a path forward in all situations and are always refining our approach to solve problems from the points of highest leverage. This allows us to do more with less, and is embodied both by our work practice as well as how we grow ourselves.

2. Maximize the rate of learning – We learn in all spheres of project/team/self and we maximize our learning by minimizing the time to try new ideas.

3. Reason in actuals and improve signal to noise – We spend little time arguing right and wrong, but rather seek to learn quickly about any new problem via direct experience and observation. These are called ‘actuals.’ Conjectures and guesses are used to create experiments, not to reason with. This, and other communication and work practices, help to keep a high signal to noise ratio.

4. Develop leadership and entrepreneurial skills – We seek to grow new leaders by continuous investment in our fellows and ourselves. We actively create opportunities for each team member to step up and own critical responsibilities in ways that expand them.

5. Create Net Benefit to Society – Ultimately, we work to improve the world. Anything we create must be seen as a net benefit by all parties involved/affected by the work. We use this principle as our compass to guide how we select and refine ideas.

OPERATING GOALS AND PROCEDURES

1. Minimize Capital Requirements / Dilution – We seek phenomenal capital efficiency as understood by how much learning and de-risking we are able to achieve per dollar and per hour. By striving to be the world’s best team at de-risking new ideas, our projects become uniquely good investments that limit dilution to both investors and our tem.

2. Gravitate toward sustainably Cash-Flow-Positive – A business must create more value than it costs to create that value. We seek to find pathways toward a cash-flow positive nucleus in both our businesses and the operation of our house(s).

3. Incentivize creators to be their best – Each house seeks to launch a series of companies in which developers/designers can earn performance-based equity. The performance-based equity pool and task allotments decided by the leadership team. Including, but not expressly limited to the CEO and hacker house development lead.

4. Project Spin-Outs and Liquidity – The team will work on two types of activity. One type will be a system stack of generalized re-usable components that help us to build incredibly quickly. While much of this stack will be open sourced, fellows that have contributed to it may be entitled to a small amount of equity in an entity if their stack components are used for a project or entity. The other type of activity are projects, which upon spinning out as companies and reaching a liquidity event, will have their liquidity proceeds distributed according to ownership percentage. Part of Factory X’s ownership stake will be retained as cash to help to continue/fuel its operations. The description here is meant to provide an overview only; please note that detailed information about potential equity ownership, project participation and disbursement will be described in the documents associated with the spin-out entity.

5. High-leverage consulting opportunities – While the main thesis of the fellowship work is to create non-linear liquidity possibilities, there are times when working capital or personal liquidity needs will have us endeavor to provide occasional high-leverage consulting opportunities. Net proceeds from any such consulting revenue will be allocated among those who have contributed to the consulting projects after Factory X recoups all costs and its management fee (typically 15% of gross revenue, but to be determined on a case-by-case basis).

HOUSE/RESIDENCE RULES AND CODE OF CONDUCT

1. Maximize Lifestyle – We’ve created a work environment that supports the lifestyle of a creator by providing weekday meals, housekeeping, and eliminating commuting time. We all have the privilege to live fully and the responsibility to live respectfully of each other to support quality work and life within our space. Some specifics:

   • Food – Inform the chef at least 24 hours ahead if you’d like a meal for a guest or business associate.

   • Emergencies – In the event of a service outage (e.g. water, internet), significant maintenance issue (leaks, damages), or medical emergency, please let the appropriate team members know as soon as possible, and do what you can to minimize the damage until they arrive.

   • Headphones In – Respect quiet space and minimize mode shifts. When we are heads down in work, “headphones in” signal this. Please be respectful of people in this state.

   • Noise – House quiet hours are between midnight at 7am. During this time, please ensure that you don’t disturb other fellows who may be trying to rest.

2. Travel and Time-Away – We don’t have pre-defined vacation days or daily time requirements. That said, it’s a primary responsibility of fellows to devote appropriate time to projects to keep on or ahead of schedule and to spur and support the rest of the project team toward excellence. If you intend to be out of the office, please let the team know 2+ weeks in advance, and make appropriate arrangements so that any in-person responsibilities you may have are attended to by someone else.

3. Guests – If a guest is to stay overnight, please let the rest of the team know for safety and security reasons, so we are aware of who is meant to be in the house and who isn’t. If the guest intends to stay more than one consecutive night, then please make use of the guesthouse or other nearby accommodations. If guests are not staying overnight, please be with/near them during their visit so we know they are your guest.

4. Pets – Advance approval must be obtained if a fellow wishes for a pet to stay in-residence with the fellow. We reserve the right to accept or reject pets at our discretion, and will consider all factors including the duration of the stay and the expected or actual impact of the pet to the environment, productivity and culture of the house.

FELLOWSHIP TERMS AND CONDITIONS

Acceptance of a FACT0RY x Fellowship means you have read, understand and agree to the following Terms and Conditions:

1. Independent Contractor – Your relationship to FACT0RY x during the Fellowship and with respect to your receipt of the awarded stipend shall be that of an independent Contractor. FACT0RY x will not make deductions from the stipend for any taxes or contributions for unemployment insurance, workers’ compensation or other employment-related obligations. Any income or other taxes in connection with the Fellowship or stipend will be your sole responsibility.

2. Inventions and Intellectual Property – For all copyrightable material, including writings, software, drawings, and designs, and all ideas, inventions, developments and discoveries (“Developments”) made, conceived or reduced to practice by Contractor, whether alone or with others, during the term of this Agreement, which relate in any way to FACT0RY x business or the Services (the “Intellectual Property”), the Contractor hereby grants FACT0RY x and its affiliates a perpetual, royalty-free, nonexclusive, worldwide license (with the right to sublicense) to (a) copy, distribute, display, perform, and create derivative works of the Pre-Existing Developments; and (b) use or otherwise practice the Pre-Existing Developments, including the right to develop, manufacture, market, promote, sell, and lease products or services which practice or embody the Pre-Existing Developments. The Contractor shall have equivalent rights on said materials.

3. No Restrictions – You represent and warrant that you are not under any contractual restrictions or prohibitions that would prevent you from participating in the Fellowship or working on the various projects contemplated by the Fellowship.

4. No Third Party Rights or Information – You hereby represent and warrant that any work you perform during the Fellowship, and any Inventions you may create or contribute to, shall be your own work product and will not incorporate or infringe upon any third-party rights, and use of such Inventions by FACT0RY x will not infringe the rights of any person. You shall not communicate any information to FACT0RY x in violation of the rights of any third party.

5. Confidentiality - There are two classes of “Confidential Information” that a Contractor is required to keep confidential: Asymmetric Material and Client/User/3rd party data. Asymmetric Material includes software, invention, processes, formulas, trade secrets and techniques that took significant time to develop but can be quickly replicated and deployed relative to development time. Client/User/3rd party data includes customer lists, pricing information, technical data, user data and metadata, client communications, financial information and other business information. Contractor’s obligations under paragraph 5 with respect to any Confidential Information will terminate when Contractor can document that such Confidential Information:

   • Was in the public domain when the Company communicated it to Contractor or later entered the public domain through no fault of Contractor;
   • Was in Contractor’s possession free of any obligation of confidence when the Company communicated it to Contractor or was later rightfully communicated to Contractor free of any obligation of confidence;
   • Is required to be disclosed by order of a court or other governmental body, provided Contractor gives the Company advance notice of such disclosure so the Company can seek a protective order.

6. Materials - All materials (documents, files, drawings, models, designs, code, lists, etc.) provided to you during the Fellowship will remain the property of FACT0RY x and must be returned to FACT0RY x upon termination of the Fellowship.