Cooperatives: Notes

I have been interested in cooperatives for software developers for a long time. These are my notes about cooperatives.
collaboration
Author

Jim Tyhurst

Published

September 20, 2021

I have been interested in cooperatives for software developers for a long time. These are my notes about cooperatives.

Examples of software companies that operate as co-ops

  • https://dojo4.com/
  • https://smart.coop/
  • https://code-operative.co.uk/
    • Example of agency-like co-op: Code Operative, based in Newcastle.
  • https://www.usebraintrust.com/
    • Not formally a coop (as far as I know) but is a “user-controlled” talent network mainly for software/technology professionals. They claim to take 0 commission unlike similar competitors.
  • https://disco.coop/ (More of a manifesto than a working company.)

Capital for Cooperatives Act

  • https://www.congress.gov/bill/117th-congress/senate-bill/1736/text
  • John Hickenlooper, Senator, Colorado introduced this legislation on 2021-05-20.

References

2021-09-20 Introducing the Capital for Cooperatives Act

Coop resources in Colorado

Zebras Unite

  • https://www.zebrasunite.org/
  • https://zebrasunite.mn.co/
  • “Zebras Unite.Org fosters a more inclusive, equitable, and ethical environment for early-stage businesses, catalyzing community, capital, and culture for people building businesses that are better for the world.”

Zebras Fix What Unicorns Break

Online resources about cooperatives

Here are some links to information that I have found useful for learning about coops. Some of the sites focus on agricultural coops, but they still have some general information that is useful.

Platform coops

Three core principles of platform coops:

  • communal ownership
  • democratic governance
  • transparent data

References

  • Platform Cooperativism vs. the Sharing Economy Trebor Scholz. 2014-12-05. https://medium.com/@trebors/platform-cooperativism-vs-the-sharing-economy-2ea737f1b5ad
  • Nick Srnicek. 2017. Platform Capitalism. Polity Books. Available as paperback at: Washington County Libraries.
  • Fairmondo is a co-op-based version of eBay.
  • La’Zooz “A Decentralized Transportation Platform owned by the community and utilising vehicles’ unused space to create a variety of smart transportation solutions.”
  • P2P Foundation
    • “is a non-profit organization and global network dedicated to advocacy and research of commons-oriented peer to peer (P2P) dynamics in society.”
    • “The P2P Foundation was conceived to help people, organizations and governments transition towards commons-based approaches to society through co-creating an open knowledge commons and a resilient, sustainable human network.”
  • Open Cooperatives
  • Platform Cooperativism
  • Yochai Benkler, The Wealth of Nations: How social production transforms markets and freedom. ebook
    • networked peer production is a cooperative and coordinated action carried out for radically distributed, non-market mechanisms

2021-03-10 So, You Want to Build a Platform Co-Op …

  • Moderated by Trebor Scholz.
  • Part of the RADfest series by the Platform Cooperativism Consortium.
  • Join Joseph Cureton (Obran Cooperative, U.S.A.), Juho Makkonen (Sharetribe, Finland), Hugo Pimental Felinto (Coopersystem, Brazil), and Polly Robbins (Outlandish, U.K.) for a round of practical advice on how to start building cooperative platforms. The short presentations will cover recommendations on hosting your project, models of co-op ownership, and more.
  • Shared notes for today’s discussion
  • Recorded video

Speakers

  • Hugo Pimental Felinto (Coopersystem, Brazil)
    • Relationship and Business Consultant
    • One of largest tech coops in the world
    • Biggest IT coop in Brazil.
    • organizational structure: General Assembly, Board of Directors, Ethics Council, Fiscal Council
    • started in 1998.
    • 2020: decision software: Curia
      • 258 assemblies held
      • 361 coops using it in Brazil
      • 55,602 users
  • Juho Makkonen, Sharetribe, Finland
    • Author of The Lean Marketplace
    • How to build a successful non-extractive digital labor platform quickly and with a low budget
    • Mission: democratize platform ownership
    • Sharetribe is a steward-owned company
    • building a successful marketplace business is a process, not a project
    • Sharetribe Go (2014): build without being a developer.
      • Answer a few questions
      • Within a couple hours, you can start a labor coop.
    • Sharetribe Flex (2018): customizable by developers.
    • examples:
      • terrafarmers.??
      • fromthepeople.co
      • regenera.pe
      • givsly.com
      • kindarma.com
  • Polly Robbins, Outlandish, U.K.
    • 8-member coop
    • builds campaign sites for NGOs, non-extractive companies
    • CoTech is group of coops
    • suggestions for building a platform coop
      • Find other worker coops to work with.
      • They can give advice about how to do it.
      • You need a good business plan.
      • Build a website in an incremental, iterative way. Start small and keep adding modules.
    • platform coops working with Outlandish
      • needsmap.coop
      • equalcare.coop
  • Joseph Cureton, Obran Cooperative, U.S.A.
    • “Scaling small business through cooperative ownership”
    • Use value is more effective than exchange value.
    • “silver tsunami” = boomer tsunami : Baby Boomers aging out of their small to medium size business owners.
    • problems for small business:
      • access to capital
      • growth mindset
      • management expertise
    • partial solution: Obran
      • coop is a tool, nothing more
        • federalist model (Ace Hardware, Organic Valley)
        • Individualist Model: worker cooperative, credit union.
      • Obran is a holding cooperative
      • Provides a way to convert a business to a worker coop
      • Similar to leveraged equity capital to purchase companies.

References

2020-10-26 Platform Cooperatives Now

  • A team entrepreneurship online course to create platform cooperatives
  • https://online.mondragon.edu/course/view.php?id=8888
  • https://www.mondragon.edu/cursos/en/topics/strategy-entrepreneurship-and-innovation/platforms-cooperatives-now

Platform co-ops

  • use a website, mobile app, or protocol to sell goods or services.
  • These enterprises rely on:
    • democratic governance; and
    • shared ownership by:
      • workers; and
      • users of the patform
  • democratic ownership for the digital economy.
  • as a way to enable workers/owners to have more control of:
    • product
    • prices
    • services
    • governance
    • personal data

Contrast co-ops with inequities in companies based on venture capital

  • Uber has never made a profit. They have lost billions of dollars per year.
  • publicly traded corporations are the root of this inequality, because they require:
    • domination of the market
    • unsustainable growth
    • prioritization of profits over people
  • ownership model is designed to favor a small class of elite people.
  • platform cooperativism plays out in the gig economy.
  • Uber shifts all of the risk of the vehicle to the worker, while providing extremely low pay.

References

  • Stephen Reid gave link to aragon.org as “the leading DAO solution” (per Stephen). “Aragon gives internet communities unprecedented power to organize around shared values and resources.”
    • See also DisCO.coop
    • https://coopcycle.org/en/federation/
    • https://dho.hypha.earth
  • The MontPellerin Society.

Humanity at work

  • Humanity at work: Mondragon, a social innovation ecosystem case study. PDF
  • Mondragon is the world’s largest worker-led co-operative.

    • 260 companies and subsidiaries

    • 75,000 workers in 35 countries

    • annual revenue > €12 billion
  • five key recommendations:
    1. Businesses can place social benefit as a core element of their proposition without compromising their success and competitiveness in the market. In fact, social benefit is intrinsic to competitiveness.
    2. Rather than just relying on the ‘solo entrepreneur,’ people can be brought together to create sustainable positive change at scale if strong and shared values about common good are embedded in socioeconomic and investment practice.
    3. People and communities experiencing socioeconomic inequalities are likely to find their most effective transformative solutions by working together to co-create new ideas which focus on distributing wealth more fairly.
    4. Strong shared values can be powerful mobilisers of fair action, especially when embedded in more equal socioeconomic and organisational practices.
    5. Wealth needs to be distributed by taxation but more equal pay ratios also lead to wealth redistribution. mondragon therefore presents an alternative approach to fighting the structural causes of inequality.

Principles enumerated in 1987:

  1. Free Membership (Libre Adhesión): there are no barriers to membership for those who want to be part of the Mondragón experience, provided they respect its basic principles;
  2. Democratic organization: equality of worker–members (socios cooperativistas) expressed in the election of the co-operative’s representative bodies (one socio, one vote);
  3. Sovereignty of labour: labour (trabajo) is the transformative factor in society and in human beings and is therefore the basis for the distribution of wealth;
  4. The instrumental and subordinated character of capital: capital is an instrument, and should be subordinated to labour;
  5. Self-management: worker–members should be provided with opportunities and mechanisms to participate in the management of the firm;
  6. Pay solidarity: a fair and equitable return for labour;
  7. Inter-co-operation: a commitment to co-operation among different co-operative firms;
  8. Social transformation: a commitment to transform society by pursuing a future of liberty, justice, and solidarity;
  9. Universalism: the Mondragón experience is part of the broader search for peace, justice, and development of the international co-operative movement;
  10. Education: a commitment to dedicate the necessary human and economic resources to co-operative education.

The Cooperative Moment

  • Doug O’Brien. 2018. The Cooperative Moment. The Cooperative Business Journal, Summer 2018.
  • Platform co-ops are making the creators of data the owners of data.

Doug O’Brian, CEO, NCBA-CLUSA

Obstacles for advancement of co-ops

  • Can be difficult to organize
  • Attracting capital, because they are built to solve people problems.
  • Maintaining co-op identity when big or old. Difficult to keep the passion for the core principles in the 2nd or 3rd generations of members.
  • Competing in well-capitalized private sector and social enterprise environment
  • Lack of public awareness of the co-op model

Opportunities to advance co-ops

  • Increased relevance when people feel excluded.
  • Technology offers new channels for organizing.
  • Significant capital on sidelines looking to make social impact.
  • Known model with a literature and track record.
  • An existing co-op community: local, national, international.

Platform Cooperatives

  • Transformational change in the nature of work.
  • Rise of “surveillance capitalism.”
  • People could form Cooperatives to capture more value of their work.
  • People could form cooperatives to negotiate data usage, sell data with greater control and value for those generating it.

Disrupting Together

Duncan McCann. 2018-07-18. Disrupting together: The challenges (and opportunities) for platform co-operatives. Report: PDF.

five areas of challenge for platform co-operatives:

  1. platform co-ops are not attractive to traditional venture capitalists and tech investors.
  2. co-operatives must commit long-term operational and financial commitment to building and maintaining their technology.
  3. coops need technology which can enable it to recruit drivers and passengers in parallel, and to distribute the profits of the business.
  4. platform co-ops must find a way of subsidising their early entry into the market in order to build a profile for themselves.
  5. platform co-ops must find a way to harness the virtuous cycle of positive network effects.

To overcome these difficulties:

  1. We provide a series of recommendations to make platform co-operatives viable.
  2. We need new funding structures that can provide alternatives to the venture capital funding model.
  3. New platform co-ops must collaborate with each other and, where appropriate, form federated structures.
  4. Workers should be provided with the necessary skills training and support to establish their own co-operatives.
  5. Locally-focused commissioning from the public sector could provide a vital revenue stream to platform co-operatives.
  6. Government must enforce existing regulation robustly to ensure a level playing field for new platform co-ops.
  7. Users and consumers need to understand the impact of spending their time and money on established platforms, and be given opportunities to spend their money on ethical alternatives.

Platform co-operatives present a possible alternative to traditional platforms which tend towards monopoly, concentrate power and erode workers’ rights.

Platforms seek to connect the services and/or products produced by one group to another group seeking to purchase the services and/or products. What theoretically differentiates platforms from traditional intermediaries is that “the two or more distinct sides retain control over the key terms of the interaction” such as “the pricing, bundling, marketing and delivery of the goods or services traded”; that each user invests (time, capital, or labour) into the platform in order to reap the potential rewards; and that payment passes through the platform.

There are two main typologies of platforms: 1. labour platforms, where participants perform discrete tasks; 2. and capital platforms, where participants sell or rent assets.

The New School. Institute for the Cooperative Digital Economy.

Are co-ops capable of taking on internet giants?

Coops have survived since 1844.

Data cooperatives

  • let the data be owned by users and owners.
  • privacy could be a key differentiator for coops, rather than extractive corporations.
  • Driver’s Seat coop collects taxi data and sells it to cities. “Shared data ownership”.
  • My Data: health information managed by Swiss coop. Members control the use of their data.
  • OCLC WorldCat is a network cooperative. World’s largest library database. 18,000 library members in many countries.
  • Associated Press (AP) is a coop

extractive gig economy:

  • Workers often misclassified as an independent contractor, rather than as an employee.

coops attempting to fix the problems of the gig economy:

  • Smartcoop in Europe. “Smart enables workers, entrepreneurs and organisations to invoice, to work together with other professionals and to manage a budget on an occasional or a long-term basis.” Turns independent workers into employees of the coop. Similar to a union for freelancers. Mutualizes the risk of freelancers.
  • Savvy cooperative of patients. Patient-owned for public benefit.
  • Equalcare Coop: “the people who give and receive care and support.”

Producer platform coops:

  • Stocksy coop of photographers, selling their images, so that photographers earn more money than on other platforms.

Cooperative Labor Platforms:

  • Up&Go worker cooperative for house cleaners.
    • Only 5% of income goes to administrative costs.
    • 95% goes to workers.

Transportation coops:

Education:

  • higher education has moved online during the Covid-19 pandemic.
  • imagine a university owned by students, faculty, and staff, using open education materials.

Distinguishing characteristics of coops:

  • worker-centric coops lead to different organizations than just copying Uber for a platform.
  • ownership models are not inherent in a platform. People can decide what they want for an ownership model.
  • Many of these coops invest in education of members:
    • Stocksy
    • Up&Go

Municpal broadband services and other city services

  • Who owns data in our cities? e.g. traffic data, health data, government spending data.
  • “Data Sovereignty” of cities.
  • Trebor Scholz suggested Cooperative Data Trust to Google’s Sidewalk (?) automation program in Toronto.

How to run a city like Amazon, and other fables

Mark Graham, Rob Kitchin, Shannon Mattern, Joe Shaw (editors). 2019. How to run a city like Amazon, and other fables.

Platform co-ops and policy

  • link this work to anti-trust
  • work with cities, states, countries that really want to support coops.
  • Platform Cooperativism is part of the political agenda of the German Social Democrats (SPD).
  • British Labour Party includes platform cooperativism in its digital manifesto.
  • Legislation for several U.S. senators: “Bill for the American Worker”.

Platform Cooperative Development Kit

Platform Cooperative Development Kit: An open source toolkit of software to support platform cooperatives.

Challenges:

  1. Governance: Platform co-operatives usually lack a geographically-rooted community, and can have divergent stakeholder interests, which create organisational problems.
  2. Technology: Platform co-operatives may not want to adopt some of the technologies that have become synonymous with Big Tech and surveillance capitalism such as data analytics and artificial intelligence. Their lack of capital also hampers their ability to build platforms and supporting infrastructure to the same standard as commercial platforms - making it difficult to meet consumer expectations in terms of user experience.
  3. Growth: Platform co-operatives are unlikely to be able to follow the established growth strategies of incumbents and so will find it difficult to build the natural network effects that fuel market penetration and consolidation.
  4. Capital: The lack of a pure profit-driven business model means platform co-operatives struggle to access capital to grow, as financing in the start-up sector is predicated largely on venture capital, which generally requires investor control and the potential for large future returns.

“community shares”: the use of withdrawable shares by community co-operatives in the UK to access patient, aligned risk capital.

Mutual shares for platform co-operatives

Does it scale?

Can you fight monopolistic platforms with coops?

  • Can coops defeat huge enterprises like Google or Amazon?
  • Local coop might help a group of local drivers, but they will not have the resources to build self-driving cars like Uber is doing.
  • Coop cannot compete with predatory pricing by giants.
  • meme: “Goldman Sachs doesn’t care if you raise chickens.”
  • Coops have trouble raising capital.
  • Coops are slow to make decisions.
  • What do we want to scale?
    • scaling solidarity and social assistance
    • meet social and economic needs
    • risk management
    • health benefits
    • community
    • collective self-help
    • dignity at work
  • essential to determine value proposition
  • New coops form when markets fail.
  • focus on:
    • worker cooperatives
      • workers own the business
      • benefit based on their labor contributions
    • multi-stakeholder cooperatives
    • producer cooperatives
      • usually comprised of individual businesses
      • gain economies of scale
    • data cooperatives
      • owned by members
      • distributed across geographic areas
      • limit data captured from members
      • use data to meet collective goals
      • examples:
        • midata.coop
          • “MIDATA shows how data can be used for the common good, while at the same time ensuring the citizens’ control over their personal data.”
        • the good data datavest and health bank
  • rather than:
    • consumer cooperatives
    • purchasing coops
    • utility coops
    • marketing coops
    • electric utility coops
  • difficulty of scaling platform coops
    • traditional worker coops thought of as small organizations that spend a lot of time on democratic processes.
    • but even traditional worker coops can scale:
      • Mondragon, Spain: 30,000 worker owners; 80,800 employees worldwide
        • Think about participatory processes first.
        • Think about technology second.
      • SEWA: self-employed women’s association, India.
      • ULCCS, Kerala, India: one of largest labor contract worker cooperative construction companies in Asia. Employs over 12,000 people.
  • apply these concepts to platform coops
  • SUPERMARKT, Platform Coops Berlin: older members in government are not aware of the model; need education for people to understand the model, so that it can scale.
  • Smart Coop turns freelancers into employees of the coop, so that they can get social protections like unemployment insurance, health insurance. 35,000 members across Europe. Each country grows separately as it tries to address local laws. It scales through replication from country to country.

Colab Cooperative: Platform Coop Strategies

https://colab.coop/

Travis Vachon personal data store cooperative; wants to make it easier to host data and to start a platform cooperative.

  • https://movement.colab.coop/pcc
  • Transforming the gig economy into an engine of community wealth building.
  • Cooperative development strategy entails:
    • Finding partners
    • Holding true to your values
    • Maintaining a deep level of integrity.
  • Digital repositories
  • Open Resource Exchange
  • Critical Connections
  • Software license
  • Cooperating on data to compete with market monopolies
  • Personal data storage
    • Solid
      • personal datastore standard
      • https://itme.press/posts/solid-foundation
      • https://hackaday.com/2020/03/30/solid-promises-a-new-approach-to-how-the-web-works/
      • https://solidproject.org/developers/tutorials/getting-started
      • Solid is really just an RDF-centric read/write web server so once you have the background in RDF everything gets a lot easier.
      • This stuff is all built on “Semantic Web” and “Linked Data” ideas, so it’s useful to learn about RDF and ontologies and all that: https://www.w3.org/standards/semanticweb/
    • ITME
      • I signed up for newsletter.
      • https://github.com/itme/swrlit
    • https://murmurations.network/ ?
    • https://medium.com/@shevski/are-personal-data-stores-about-to-become-the-next-big-thing-b767295ed842
    • Distributed agent centric application platforms combines what is possible in Solid plus application logic. Tip to everyone to check out Holochain, https://holochain.org
    • MyData just had a conference: 10-12 Dec 2020.
    • https://www.midata.coop/

Copyright © 2021 Jim Tyhurst
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.