Ask HN: Examples of tech worker cooperatives?
Cooperatives are an intriguing business model for reasons addressed in a recent New York Times article [1] as well as a recent documentary film called Shift Change [2]. The discussion sparked by Thomas Piketty's Capital in the Twenty-First Century [3] provides further reasons for seeking out an alternative business model. Wikipedia has a good entry on the worker coop model [4].
I've come across Quilted [5] and Colab [6], two worker-owned and run cooperatives working in the tech space in the U.S. Both have a fairly impressive lineup of worker-owners and compelling portfolios, indicating that the model can really work.
Does anyone know of other examples of such coops, both in the U.S. and around the world?
1: http://www.nytimes.com/2014/03/30/magazine/who-needs-a-boss.html
2: http://shiftchange.org/about/
3: https://news.ycombinator.com/item?id=7618971
4: https://en.wikipedia.org/wiki/Worker_cooperative
5: http://quilted.coop/
6: http://www.colab.coop/about
98 comments
[ 8.2 ms ] story [ 714 ms ] threadA few technology worker coops are listed there with brief stories/interviews.
It is actually a non-profit organisation without any shareholders but it is controlled by its employees.
(I work there)
http://www.koumbit.org/ http://brierwoodapps.com/
It would be a bit naive to think that they are inherently better managed or more "democratic" (egalitarian?) than a regularly run business. Like any democracy, not only do they come in different flavors (ie, representative democracy vs "pure" democracy etc), but they come with their own quirks of implementation. In many democracies the individual voters have little actual power and organized and concetrated special interest groups game the system. And there are plenty of co-ops run by CEOs.
And most co-ops do not offer order-of-magnitude improvements in working conditions or pay. You are looking at a 10% type improvement, not a 10x one. The downside of a co-op is that it might have a 10% improvemnet in (potential) conditions, but a poor implenetation but will be -10% as productive due to inefficiencies and execution problems.Which basically runs the risk of zero net improvement for the typical person there.
All of which means that you really need to analyze any proposed or actual implementation. Broad-brush generalizations are often misleading in this context. Just something to keep in mind.
90% for us 2, 10% for the rest of you!
Not at all what a co-op is about.
http://www.software.coop/
https://www.plausible.coop/
A few articles I wrote on working at Igalia last year:
http://wingolog.org/archives/2013/06/05/no-master
http://wingolog.org/archives/2013/06/13/but-that-would-be-an...
http://wingolog.org/archives/2013/06/25/time-for-money
Igalia is a great company, really wonderful people and they do fantastic work. I really love the model they've created for the company.
I'm Max and I'm new to HN. My contact info is in the team section of our website if you want to chat further or get a copy of our fleshed-out business plan. I also need to hire a developer soon so... :-)
> At the end of 2012, it employed 80,321 people in 289 companies and organizations in four areas of activity: finance, industry, retail and knowledge.
A cooperative is type of a business entity that does not have outside shareholders. Rather, its members are its owners.
So, in the case of a worker cooperative, the people who work for the business are its member-owners. (In the case of a consumer cooperative, its patrons are its member-owners.)
What are some benefits of cooperative businesses?
For one thing, because the business is not beholden to outside shareholders, who typically only have an interest in the financial health of the company, it can make decisions that a for-profit company might not be at liberty to make.
For instance, a for-profit bank, under shareholder pressure, might introduce sneaky hidden fees to increase its bottom line -- but at the expense of irritating its patrons. That just wouldn't happen with a credit union (a form of cooperative), because the investors and patrons are one in the same, and their interests are aligned.
Another big benefit, and this is especially true with tech companies, is that the member-owners are invested in the company's success in a way that mere employees are not -- and they have the decision-making power to actually influence how the company operates, because coops are democratically controlled. A lot of tech companies grant stock options and offer profit-sharing programs, but stock options can be a crap shoot (there are a lot of ways for them to end up being worthless, even when the company is profiting handsomely), and profit-sharing doesn't necessarily mean power-sharing.
There are two major downsides to operating a business as a coop, though. One is that you have to raise all of your capital from your members, rather than relying on outside investment. That can be really tough, especially when you're just starting out.
The other downside is regulatory. I'm not sure how it works in other countries, but in the U.S., there are a lot of restrictions and hoops you have to jump through. For instance, consumer cooperatives must restrict membership based on some type of common bond -- a geographic area or an alumni association, for instance. But some types of businesses just don't flourish unless you open them up to everyone. This is less of a problem, though, for worker cooperatives.
I'm a big fan of the cooperative movement, and the broader distributist movement (http://en.wikipedia.org/wiki/Distributism), and I wish more people knew about the benefits coops offer.
The majority is not always right, or even informed enough to make a correct decision. An executive hierarchy puts this process in the hands of key decision makers, who are supposed to make the correct decisions to protect the company's interests based on their experience.
What happens when the decision made by the democratic majority is potentially harmful to the company? Is there a hierarchy in place to mitigate bad decisions?
Thanks for the informative post. I'm new to the idea, and I have a question. You say that the decision making process is democratic. Couldn't that be dangerous?
The majority is not always right, or even informed enough to make a correct decision. An executive hierarchy puts this process in the hands of key decision makers, who are supposed to make the correct decisions to protect the company's interests based on their experience.
What happens when the decision made by the democratic majority is potentially harmful to the company? Is there a hierarchy in place to mitigate bad decisions?
EDIT: jawns has clarified that the democratic process can be used to appoint an executive heirarchy. I was under the impression that every business decision was put to a vote by the entire cooperative. I understand now that key decision makers can be elected in order to mitigate decisions that may be harmful to the business.
There's probably a lot of decisions that could still be left up to workers, but I agree that having some clear direction is important, and there's lots of questions that just need a "no". The BDFL model of open source is a good example of how this can work without excessive hierarchy.
To give an example that's more to do with worker cooperatives, suppose the member-owners are discussing whether to work 35- or 45-hour work weeks. The 35-hour work week might be good for work-life balance, but bad for the business itself, while the 45-hour work week might be the reverse. Nevertheless, the majority of members might vote in favor of the 35-hour work week, and whether or not that is bad for the business, it will be good for the majority of the workers.
Granted, the democratic process isn't perfect -- you need only look at U.S. politics if you need proof of that -- but when you compare it to its alternatives, it's not at the bottom of the pack.
This is how a lot of co-op living arrangements work. Everyone has a say, but the final decision is made by someone whose job it is to manage the health of the house.
By the way even companies can adopt some of these ideals without being a full-blown co-op. I have worked in several organizations where decision-by-committee is highly popular, and in each case, there are processes to prevent deadlock or processes for override if something starts to go badly. Usually these processes are triggered by very senior level individuals who have decision rights, or by regulatory experts (e.g., someone in Legal).
Depends on the co-op.
I lived in a student co-op in college. Every Sunday night we had a group meeting. Every major decision was made by a consensus making process. Other decisions were delegated to committees or individuals in a particular position: food manager, garden manager etc.
I also worked at a student composting/waste disposal co-op that operated the same. Everyone has a voice in either the actual decision or in electing someone to make a decision.
This type of decision making basically requires lots of communication between members and usually at least one long meeting a week. It also demands that people have mutual respect for each other and the group decision making process.
In both instances it definitely helped me learn to relate with, communicate with and respect others and their opinions.
Actually, it is possible to raise outside capital. One way is a traditional bank loan, though that usually requires collateral. There's also "patient capital" available from some institutions.
https://en.wikipedia.org/wiki/Patient_capital
http://coopcapital.coop/coopcapital
We also have a National Cooperative Bank in the US, created by an act of Congress and later privatized (as a co-op, naturally), that specializes in banking services and loans for cooperative enterprises. They may not be completely up-to-speed on worker cooperatives, however.
https://en.wikipedia.org/wiki/National_Cooperative_Bank
A really interesting option is a direct public offering, where you can sell non-voting shares to individuals while avoiding most of the legal implications of an IPO, as long as you comply with various restrictions and raise a limited amount of money. There's a case study about a pickle company that transitioned to a worker co-op by buying out the previous owners that way:
http://www.buylocalfood.org/real-pickles-financing-case-stud...
So, what's the difference between a coop and a private, for-profit company in which everyone who works for the company owns the same portion of the company and gets an equal say in decision making? Not much practical difference, really, although with a coop, those things are enshrined, whereas with a private company, they're optional.
Initially that would be effectively the same, but in a coop the equal ownership by all employees (and only employees) is also supposed to stay that way through employment changes: if a person quits the company, they don't take an equity share with them, or they'd become an outside investor. Instead the company is equally owned at all times by the current employees.
It might be possible to write up a complex contract that does that with regular shares, forcing people to hand them in if they quit the company (and prohibiting sales), but since regular shares are considered property there are a lot of pitfalls around making that work (if it's even possible), along with opportunity for shareholders to challenge the structure. A coop structure avoids that issue by not having regular equity shares in the first place.
That's only true of equity, which isn't the only form of capital financing. But, yes, its an important limitation.
http://electricembers.coop
https://riseup.net
http://designaction.org
http://radicaldesigns.org
http://palantetech.coop
I also wrote an article about collectives for designers back in 2005: http://backspace.com/notes/2005/09/collectives-for-designers...
http://npogroups.org/lists/info/tech-coop
They're a friendly, cooperative bunch. Join and introduce yourself, or read the archives. It seems like most of them have thought really hard about what they're doing, and it's pretty solid.
If anyone's interested, it would be nice to have a chat.
Not sure if they fit your profile, but it might be worth taking a look: https://www.handelsregister.de/rp_web/mask.do