By Michel Bachmann
In early 2010, leaders from the Hub network gathered
near Amsterdam for what amounted to an
emergency meeting. Efforts to create a reliable
structure for sustaining growth at the global level
had led to a series of conflicts among those who
had founded Hub sites in cities such as London,
Melbourne, and San Francisco. “At that point, there was a collapse
of trust,” says Alberto Masetti-Zannini, founder of Hub Milan. “We
realized we needed to get together and face our demons to redesign
the dysfunctional system that we had created. It was quite painful,
but one thing came across very clearly: When a system begins to
change, there is no stopping it.”
The system in question—now called Impact Hub, after a major
rebranding effort that concluded in early 2013—today includes nearly
50 active sites. Each site gives social innovators flexible access to places
where they can work, learn, and collaborate. In the language of the
new branding, Impact Hub is a “global network of people, places, and
programs” that enables users to “catalyze impact.” Leaders of the
organization expect more than 100 sites to be in operation by 2015.
But in 2010, five years after the opening of the first Hub, the
organization had reached a turning point. The Hub system had
become dysfunctional because its leaders had failed to create a
structure that would effectively blend the interests and aspirations
of its stakeholders. The decisive question was this: What kind of an
organization would the Hub become as it expanded globally? Or, to
be more specific, how would it navigate the tension between serving
a movement, building a business, and sustaining a network?
I had a front-row seat as Hub leaders from around the world
wrestled with those questions. In 2010, I had recently cofounded
Hub Zürich. Partly because I was new to the Hub Network and
partly because I have a background in organizational change, my
fellow Hub founders elected me to the global leadership team. In
that role, I helped guide the transition process that unfolded after
that pivotal meeting in Amsterdam. But this isn’t my story. In fact,
the evolution of the Hub has never been about any one person. If
there’s one thread that runs through the history of the Hub, it’s the
fundamentally collaborative nature of the organization.
The story of the Hub—its rise, near-fall, and rebirth—reveals
much about the struggle that any group of diverse, passionate people
will face when they seek to drive a social change effort that can
achieve global scale.
Social Innovators Find a Home
The idea of the Hub emerged in the wake of the anti-globalization
movement that arose at the turn of the millennium. “There was a
huge amount of criticism of the current economic models but almost
no attention to different modes of progress,” says Jonathan Robinson,
cofounder of the Hub organization and a leading figure in its early
development. “We asked ourselves, What if half of that energy went
into imagining and demonstrating some real alternatives?” The problem,
as Robinson saw it, was not a lack of aspiration or inspiration.
“Everyone has ideas for making the world a better place,” he says. “But
where does one go to make them happen? We felt there was a crisis
of access to the experience, infrastructure, and networks needed to
turn ideas into reality. We discovered a whole set of people trying
to realize good ideas from their bedrooms—lonely, cut off from the
world. So it dawned on us: What if these people could come together
in the same physical space and have a place to connect?”
Robinson and a team of colleagues opened the first Hub in central
London in early 2005. Located on the top floor of an old warehouse,
Hub London embodied the spirit of grassroots entrepreneurship.
Everything was built from scratch, and the space was designed to
provide a collaborative environment in which people could work,
meet, and learn within a modular structure. It featured leaf-shaped
tables that allowed for flexible co-working, a semi-open meeting
room where users could hold workshops, a secluded library for quiet
thinking, and a community kitchen where people could hold small
meetings over lunch or coffee. There were no assigned work stations,
so users would sit next to a different fellow user every time
they visited the Hub. The main idea was to create a place where
unlikely allies would meet by serendipity.
To catalyze that kind of interaction, Hub founders introduced
the concept of hosting. “We didn’t want any traditional receptionists.
We wanted to host people in the same way that you would host
someone in your house or at a party—making guests feel at home and
introducing them to people they should meet,” says Maria Glauser,
who served as the first host of Hub London and later led the development
of the hosting practice for the entire network. “So we looked
at how we could develop a practice of creating collaborative environments
and connecting people from different worlds into meaningful
relationships.” As part of its hosting effort, the Hub began
organizing various community-oriented events, including weekly
lunches, business clinics, and skill-sharing sessions.
In short, the Hub emerged as a cross between a business incubator,
a learning lab, and a professional membership community. To
make the operation financially sustainable, the Hub team adopted
a membership model: People would pay for the space as they used
it. Drawing on an analogy to mobile-phone subscription plans, the
team developed a series of monthly rates that ranged from £20 (about
$30 in US currency) for one day of use to £400 (about $600) for 24/7
access. Each plan allowed people to participate in Hub events and
thus to connect with a broader community of social innovators.
A Movement Grows—and Undergoes Growing Pains
Before long, the nascent Hub community in London grew to include
more than 200 members. It also began to attract attention from
people who wanted to build similar sites in their own cities. Within
a year, Robinson and his colleagues had received hundreds of such
inquiries. “It didn’t feel like we were building a London community,”
he recalls. “It felt like we were grounding a global community with
its first manifestation in London. So it didn’t surprise us when we
got visitors from all around the world seeking to do something similar.
What surprised us was the volume. Initially, we were flattered
by the huge amount of interest. But practically, it became a bit of a
nightmare.” Robinson and his team, after all, were still working to
develop a business model for their London operation.
Even so, the Hub team decided to hold a meeting for people with
an interest in hosting spaces devoted to social innovation. In early
2007, more than 30 aspiring hosts showed up in London; they came
from as far away as Bombay (Mumbai) and São Paulo. Although the
initial purpose of the meeting was merely to share lessons related
to the hosting practice, it quickly became clear that most attendees
had come to learn how they could replicate the entire Hub model.
“It was frustrating, because everyone had questions about the global
model and we had no answers,” Glauser recalls. “But there was no
way back at that point. The good thing was that, as a result of this
gathering, we built a very strong and trusting international network
of friends and peers.” Indeed, many who attended the London meeting
would soon found Hub sites in their home countries.
Over the next couple of years, the Hub started to expand as a
movement of like-minded people who were building roughly similar
Hub communities. There was no global structure to guide or limit
them. That lack of clear rules was appealing to many Hub founders;
it gave them the freedom to develop their own version of the Hub
model. “The main philosophy at that time was ‘just do it,’ which
activated a lot of entrepreneurial energy,” says Pablo Handl, a cofounder
of Hub São Paulo.
To be sure, the absence of a clear governing structure raised questions
for Hub founders. What could they expect from each other, and
how would they make decisions? Would they follow an open model
that would allow anyone to open a Hub site? How much control would
exist at the center of the organization? Should there be a center at all?
For the time being, however, there was enough trust among Hub leaders
for them to continue on that basis alone. “The general message
was ‘We’re sorting things out together, so no worries,’” says Glauser.
The Hub Becomes Hub World
By 2008, there were nine Hubs in operation—in cities ranging from
Amsterdam to Johannesburg. (A second Hub had opened in London
as well.) Hub founders had not yet arrived at a formal agreement on
how to structure the organization globally. But that issue had become
ever more pressing. So Hub leaders set up an interim board to
map out the foundations of a global governance and financial model.
On the board, there were two main currents of thought: Some
members preferred a very light structure that would allow local
Hubs to work together in a loose fashion. Others leaned toward
creating a more centralized organization that could attract investment
and implement an active growth strategy. “Essentially,
we were caught up in a tension: Do we foster a movement of Hub-like
spaces? Or do we franchise?” Robinson says. “We wanted to
borrow a little from the corporate franchise culture of codifying
best practices and expectations around a shared intent. But we
also wanted to borrow from the energy that movements develop
as they spread around the world. So we were trying to pick the
best bits of both operating models and to create something of a
hybrid—a model that could serve the huge potential that we saw.”
To discuss what such a model could look like, members of the
interim board and other Hub stakeholders gathered for a meeting in
rural Belgium. From that meeting emerged a commitment to pursue
a “social franchise” model. Under the model, new Hubs would pay a
substantial joining fee and a share of their ongoing revenue to the
global Hub organization. In exchange, they would receive a license to
use the Hub brand, along with dedicated support from a central team
that would help them launch operations and increase their impact.
(Existing Hubs would be able to join the franchise system under a
special set of terms.) To enable the organization to expand globally,
Jonathan Robinson founded Hub World, a limited company headquartered
in London. The new company would provide central services—technology support, knowledge codification, quality control—to local
Hubs. The core Hub team also began to develop a “suitcase” of best
practices that would help Hub founders to meet challenges related to
space design, community building, and business planning.
In keeping with the idea of a social franchise, Hub leaders intended
to sign an agreement that would distribute ownership of Hub World
among its main stakeholders, including investors, founders, users,
and staff members. But those parties never got around to finalizing
an agreement. As a result, Robinson remained the sole shareholder
of the new entity.
Robinson, for his part, took on the task of attracting investors
to finance the newly incorporated Hub organization. (Investors included
people such as Gordon Roddick, cofounder of the Body Shop,
who had become a major Hub supporter.) Along with raising capital,
Robinson traveled around the world “to spread the gospel globally,”
in the words of Tonya Surman, founder of the Centre for Social
Innovation (an organization with a mission similar to that of the
Hub), who met Robinson during this period. “This whole social franchising
thing wasn’t an instant, out-of-the-box solution. It was just a
permission to struggle. But he had an incredible brand promise—the
allure of a global network of social innovators.”
Many Hub founders shared that sentiment. “I think all the Hubs
fell in love with the dream that Jonathan created,” recalls Danny
Gal, a cofounder of Hub Tel Aviv. “He was an amazing storyteller,
and many of us fell for this dream of creating a global network.” Tim
Freundlich, a managing partner of Good Capital, not only admired
the Hub World vision but also considered investing in the new global
structure. That opportunity was “the best impact investment we never
made,” he says. “We looked at it and looked at it, but we couldn’t get
on top of the idea of a global franchise company. And yet the more
we talked about it, the more I fell in love with it personally. So I told
myself: If you can’t invest in them, join them. Get in there, and we’ll
figure it out somehow.” Freundlich cofounded Hub Bay Area in 2008.
A Crisis Erupts—and a Turning Point Arrives
As the new organization got under way, signs of trouble began to appear.
A growing number of local Hubs refused to pay their franchise
fees. As a result, Hub World underwent a severe cash-flow crisis. “It
was an increasingly contested landscape,” Robinson recalls. “There
was tension in the network over whether we should pursue nonprofit
or for-profit. There were big questions around how much to
invest in the core, on what terms, and for what services. And there
was tension around the speed of delivery. The momentum of interest
from around the world was simply faster than our capacity to
deliver. Last but not least, there was growing tension around ownership.
The fact that one person owned the brand was not aligned
with what we had collectively created.”
What followed was a year of turmoil. “It was like a car roaring
down a really steep hill. But the engine wasn’t running and there
was no one in control,” says Brad Krauskopf, founder of Hub Melbourne.
“If you ask me, the organization should have folded at that
time. I have no practical understanding of why it didn’t, except for
the power of a distributed network: Even if you take out some of
the major nodes, it still manages to keep on working because of
all the interconnected relationships. What you got was one of the
most complex ecosystems that I’ve ever seen anywhere. And I’m
still amazed that we managed to keep it all together.”
The Hub network, in fact, continued to grow: By the end of 2009,
more than a dozen Hub sites were up and running, and many others
were in development. Yet only a few local Hub founders had signed
the formal franchise contract. Instead, many Hub founders—especially
those based in emerging economies—were trying to negotiate
special terms for their franchises. “The conversation shifted from
being part of a movement to a kind of bargaining,” says Pooja Warier,
a cofounder of Hub Bombay. (That operation later separated from
the Hub network and is now called Bombay Connect.) “It felt like
we were lost between the economics of being a movement, a business,
and a network.”
For many local Hub founders, the tension between those organizational
forms was becoming impossible to ignore. “Hub World tried
to create a hybrid,” says Masetti-Zannini of Hub Milan. It aimed simultaneously
to build a franchise business and to support a loose,
movement-like network, and it “didn’t really serve either purpose,”
Masetti-Zannini argues. “Franchises need to be much more controlled,
and the offering needs to be entirely clear—what you’re buying into
and what you’re receiving. This was clearly not the case in the first
phase of the Hub, because all the services of Hub World were still
being developed at that time. So I asked myself: What exactly am I
paying for? And if I’m paying, where is my voice? Where is my vote?”
By 2010, Hub leaders recognized that they had to shift course in
order to rebuild trust. Early that year, they convened at a site near
Amsterdam for a crisis meeting. The main outcome of the meeting
was that attendees formed a working group to develop and propose
a new governance model. The mandate of that group focused less
on a change of leadership than on charting a way forward for the
global Hub organization. “I never interpreted it as a coup. It wasn’t
about that,” says Masetti-Zannini, who led the working group. “It
was more about stopping a train that was about to crash—because
all of us small trains that were attached to this train would have
crashed as well.” In any event, it proved to be a pivotal moment for
the Hub network.
An Alternative Model Takes Shape
After studying various innovative organizational forms, the working
group put forth its proposal. The main idea behind the proposal
was to follow a co-ownership model in which all Hubs would share
responsibility for the global assets of the organization. “It was kind
of an inverted model,” says Pablo Handl of Hub São Paulo. “Instead
of the global owning the local, we would become a system where the
local owns the global. We would all be equal to each other and delegate
the management of the network to a central company. We would
own the company. We would own the brand and everything.” Next, a
transition council took charge of working out the practicalities of the
new model. I served on the council, along with other Hub founders.
“It was really about getting all the facts and figures together—understanding
what are facts and what is just noise,” says Hinnerk Hansen,
a cofounder of Hub Vienna, who served on the council as well. By the
end of 2010, we had created a detailed transition plan.
The core of the plan involved the creation of a new entity called
the Hub Association. Each local Hub had to commit formally to joining
the association, and each Hub would sign up on equal terms—one
Hub, one vote—as a co-owner of the new organization. The association
would own a limited company called Hub GmbH, which would
have a mandate to facilitate collaboration across the Hub network,
to provide local support, and to grant licenses to new Hub sites.
(Hub leaders would eventually register both the Hub Association
and Hub GmbH in Vienna, in part because they had secured crucial
financing from Austria-based Erste Bank.) One principle of the
association was to keep the center as lean as possible and to delegate
much of the necessary work to people based in local Hubs. Toward
that end, Hub leaders introduced a Sister Hub system and other
peer-based structures to guide new initiatives.
Essentially, the Hub Association inverted the centralized structure
of Hub World. In place of that structure, it adopted a distributed
model in which every Hub would be accountable for the
whole. “It was really an invitation to a new kind of Hub network,”
Hansen says. In the new structure, as in the earlier structure, member
Hubs would pay a joining fee and an ongoing revenue share.
Significantly, however, both the joining fee and the revenue share
would be about two-thirds less than they had been under the Hub
World model. In addition, the joining fee would be adjusted to the
projected revenue of each Hub.
One by one, local Hub leaders signed on to join the newly created
entity. In early 2011, exactly one year after the Amsterdam meeting,
people from all across the network came together at Hub Madrid
to celebrate the transition and to make plans for moving forward.
“It was amazing to be there and see how something new was born,”
says Maria Glauser. “It may not have been perfect, but it felt like the
network was in really good hands.”
New Challenges Emerge
Now that a new governance structure was in place, Hub leaders turned
their attention to redesigning the processes that would enable the
network to grow. A large backlog of requests to launch new Hubs
had accumulated during the transition. To deal with those requests,
Hub leaders introduced a peer-review mechanism. In that way, they
would be able to leverage the power of the distributed network that
they were building. “The whole process seeded a conversation around
what ‘distributed’ really means,” says Simon Ulvund, a member of
the transition council who today serves as a director on the global
management team of Impact Hub.
Previously, a central team in London had been responsible for approving
applications to join the Hub organization. Under the revised
process, applicants must first obtain a referral from an existing Hub
to gain candidate status. Next they must submit a feasibility study
and receive the backing of a second Hub. Then existing Hubs vote
as a group on whether to accept applicants into the Hub Association.
This approach not only ensures that the quality of applicants
will be high, but also helps build a strong relationship between
each new Hub and other local Hub sites. “The main challenge in
this process is how to maintain quality standards without getting
standardized,” Ulvund explains. “There are important lessons that
we have learned along the way on how to build a successful Hub.
Yet we also believe in the power of letting Hubs innovate with the
model in their local context. So we focus on picking the right teams
and sharing best practices.”
Indeed, one important lesson to emerge from the transition process
was that the Hub needed to re-invent not only its global operating
model, but also its local business model. In the original model,
local sites derived their main revenue stream from offering flexible
access to work, meeting, and learning spaces. (Call it Hub 1.0.) Most
Hub founders, however, quickly realized that they could not build
a sustainable business on that basis alone. So in recent years, they
started to offer value-added services—incubation, education, and
consulting, for example. (Call that model Hub 2.0.) “Essentially,
we’re becoming a platform that connects people to meaningful content,
both locally and globally,” says Hansen, who is now a director
of the global Impact Hub management team. Hansen likens the Hub
platform to a computing platform: “It’s about building an operating
system within the growing impact sector, with all kinds of ‘apps.’
The question is, What do we do in-house and where do we partner?”
As Hub leaders emerged from a period of crisis and transition,
they started to look outward again. “We’re slowly becoming a global
player and are exploring how to collaborate effectively with others
in the broader impact ecosystem,” Hansen says. “The magic of the
potential,” Surman says, is “to get practical around creating value
for our members, rather than being consumed with ourselves.” Many
Hub founders, meanwhile, believe that the network is still in transition—that it is about to enter the next stage of its development
as a collaborative learning organization. In fact, the ability to reinvent
itself continuously may be the quality that has most enabled
the organization to expand around the world. Cliff Prior, an early
Hub supporter who is also the CEO of UnLtd, a group that fosters
social entrepreneurship, puts it this way: “The striking thing about
the Hub is that it always manages to pivot somehow.”
Hub Founders Look Back—and Look Ahead
When the Hub first started to expand around the globe, it did so in the
spirit of an open movement. It offered a powerful narrative of change,
and it sparked an enormous response in people who wanted to replicate
the model elsewhere. To sustain momentum and to cope with the
demand for replication, Hub leaders then adopted the idea of a social
franchise. In other words, they decided to develop the Hub as a business.
What ensued was a clash of expectations. Movements are built
around a shared vision and thrive on the voluntary engagement of
their participants. One can’t control a movement—much less own
it. A business, by contrast, has a clear ownership structure, and a
franchise system in particular depends on a rule-based transactional
relationship between local franchisees and a parent company. Each
mode of organizing creates different expectations and different
power relationships: Who owns what? How do decisions get made?
How does everyone work together? Among Hub stakeholders, not
surprisingly, significant tensions emerged when one model conflicted
with the other.
The effort to resolve such tensions led Hub leaders to a crucial
insight: Along with being a movement, along with being a business,
the organization that they had created over the years was fundamentally
a network—a community of like-minded peers who have a common
purpose and a commitment to collaborate with each other. The
network model differs from the other two organizational models in
important ways. Whereas a movement is open to anyone who will
follow its core vision, a network has boundaries that reflect more
or less explicit principles regarding how people will work together.
Unlike a business, meanwhile, a network involves relationships that
are collaborative rather than transactional. Simply put: A movement
attracts passion-fueled activists, a franchise attracts transaction-oriented
managers, and a network attracts peer-driven entrepreneurs.
Which model is most effective when it comes to scaling up an
organization for global impact? The case of the Hub suggests that a
hybrid model may be most workable. But which sort of hybrid? For
Hub leaders, the answer was to combine the spirit of a movement
and the mechanics of a business within a co-owned network that allows
for entrepreneurial freedom. The result is a distributed power
structure that thrives on the self-organizing capacity of its members.
Whatever model people choose, they need to make sure that
relationships within their organization are transparent. Otherwise
they won’t be able to build trust. “My biggest learning? We needed
to have much smarter expectation-setting upfront,” says Robinson,
who now serves in an advisory role for the Hub Association. “The
downside of our rather emergent process has always been that we
did not do enough to define our relationship with each other.”
Yet the Hub organization had, and still has, core strengths that
kept it together. “Ultimately, it’s all about cultivating personal relationships
around a shared intent,” Hansen says. “There are hundreds
of Hub makers around the world who hold the network ethos
very dearly and are ready to fight for it. It’s this strong personal
connection—our having built something together—that unites us.”
Freundlich, who now serves on the Hub Association board, echoes
that view: “We’re a mix of crazy people who have a shared vision
and want to collaborate to enhance our impact in this world. But
we have yet to figure out how to unleash our full potential. I think
everybody should take responsibility here. It’s not the company’s
problem. It’s not the board’s problem. It’s not the members’ problem.
It’s our shared problem. We are it. The answer is in the network.”