Tag Archives: Co-operative

Should Tech Companies That Derive All Their Value from Users Be Co-ops?

Written for How We Get to Next and first published here.

Writing for Forbes last December, Cameron Keng argued that if Apple were a co-operative, each of its employees — from mine to production line, in-store genius to CEO — would have earned a $403,000 share of its profits last year, on top of one’s salary. But Apple is neither jointly owned nor democratically controlled by its workers. Nor are the vast majority of digital companies starting-up today.

Companies like online shoe retailer Zappos, now owned by Amazon, have famously adopted holocratic principles that encourage a flatter structure and abolish job titles, but that greater equality ends at wages and stock options. While Zappos looks a far cry from the rigid hierarchy seen at Apple, its approach appears more as a socialization of efforts and privatization of profit, hardly opening up the business for the benefit of all its workers.

“The Internet is built upon global cooperation and collaboration often with people you don’t even know,” said Rhiannon Colvin, founder of AltGen, which helps young people combat youth unemployment and precarious work by setting up their own co-ops. “There is a lot of synergy between the values of the open-source movement and the co-operative movement, but it has yet to be capitalized on.”

She added, “Imagine if new digital and tech inventions such as Facebook or Uber were owned by the people that actually create the wealth — the users of Facebook that generate the content and all the taxi drivers that work with Uber. Of course, there would still be paid staff to run it and innovate, but the shares and growth of the business would be making everyday people richer, not already-wealthy investors.”

In just such a move, Marcos Menendez launched the TheGoodData co-op a few months ago to see if he could help combat growing issues about data ownership by ensuring that “users are part of the solution.” But he’s only too familiar with the challenges that co-ops can bring. Global finance systems are not built for them and there isn’t yet an out-of-the-box solution for setting one up anywhere in the world. There are also questions over whether co-ops can work at scale and, in an increasingly unequal society, how to garner the necessary first-stage startup costs.

La’Zooz, a ridesharing platform launched late last year that offers users community-based tokens for shared journeys, is attempting to get around this complexity by operating without any ownership. “It has governance principles and tools, but has no legal basis,” Menendez explained. “Its members couldn’t set up an office, but they can work together to try and oust Uber and Lyft.”

One of the key things a co-op model could offer tech is a re-engagement with its supply chains and a more holistic approach to tech production. Catherine Williams is a director (alongside all of her colleagues) at workers’ co-op Unicorn, a food store based in Manchester. “Regardless of a member’s primary role, everyone has shop-floor time, whether it’s on the till, managing the store, making soup at the deli or packing commodities on our production site,” she said. “In food, we talk a lot about the farmers, the people doing the hard work in the fields. In tech, nobody really talks about the factory workers, working long hours, or the children out in illegal mines foraging for tin.”

The collaborative message does seem to be hitting home with some unlikely characters at the top of the tech industry. Fred Wilson, a venture capitalist with Union Square Ventures in New York City, has started engaging in online conversations with his peers about community ownership of tech companies. “With more and more web and mobile applications deriving their value mostly or completely from their user base (Facebook, Twitter, eBay, Etsy, Reddit, Kickstarter, Uber, etc), there is a growing sense that the community could or should have some real ownership in these businesses,” he wrote in January.

Some policymakers are also taking note. A $1.2 million investment in workers’ co-ops by the New York City Council announced last year was quickly bettered by a $5 million investment by the mayor of Madison in Wisconsin. “With a co-operative you don’t have to worry about a buyout,” said Mayor Paul Soglin. “You don’t have to worry about a CEO one day picking up and moving the company to Fargo. With a co-operative you can have confidence that the company and the wealth it generates are going to stay local.”

Williams of the food shop in Manchester said, “The main perk for me is, ‘a problem shared is a problem halved,’ and if I had a similar role in a hierarchical business, I’d probably have a lot of sleepless nights. The only negative I can come up with is decision-making. Consensus isn’t always the easiest or quickest method, but the advantages are well worth it. We learn from one another all the time and are able to make strong, well-founded decisions upheld by a unified and active membership.”

Still, Rhiannon Colvin believes the co-operative movement has been “incredibly bad at making itself look cool, sexy and progressive,” which is a real issue for our image-obsessed culture. But, she added, “It fundamentally challenges capitalist structures of power and wealth distribution, which most startups replicate.” Perhaps cooperation simply appears more of a political statement than many apolitical techies are willing to make.

So while it’s unlikely that Apple CEO Tim Cook will swap his comfy boardroom chair for a tin mine in Indonesia anytime soon, there are already plenty of resourcesand hundreds of successful case studies to help organizations that want to give co-ops a go.

New generation: Hackney Energy reboots playground’s solar power

Victoria Omobuwajo

Beaming: Banister House Solar Co-Op Intern Victoria Omobuwajo. Photograph: Millie Darling

Solar panels on the roof of Homerton Grove Adventure Playground’s building have recently been repaired in a joint project by playground staff and volunteers from local community group Hackney Energy.

Volunteers from Hackney Energy and the first solar co-operative to be launched in the borough, Banister House Solar Co-op, helped repair the system – one of the first of its kind to be connected to the national grid.

The team, working with Hackney-based solar firm Athena Electrical, found it was the wiring and the inverter that had stopped working.

The inverter is crucial as it transforms the energy generated by the panels from DC electricity to AC so it can work in the national grid.

The panels were installed nearly 20 years ago by Wind and Sun and are still in good working order. The company gave the new inverter to the playground at a reduced cost in order for them to get back on the grid.

Bridget Handscombe, Play Manager for Hackney Play Association, which runs the playground on Wardle Street, said: “I’d had quotes of £6,000 to replace the inverter but we couldn’t even start to look at paying something like that.

“We fundraise so that disabled children can go swimming or to replace the play area structure, so this just wouldn’t have made it to the top of the list.”

Solar Future

Green Party MEP for London Jean Lambert attended the launch of the new solar system. She said: “”It’s fantastic to see solar power back in action at Homerton Grove Adventure Playground, and community projects in Hackney leading the way.

“Solar is the future, and co-operatives and community groups can play a big part making it happen. I hope this will inspire others to get involved with local community energy projects or set up their own.”

Cllr Jonathan McShane, Cabinet Member for Health, Social Care and Culture, also came along to the relaunch party. He tweeted:Bain

New generation

Some of the volunteers who took part in the project were young people from the Banister House Estate in Homerton currently taking part in an internship scheme organised by the Banister House Solar Co-op.

Victoria Omobuwajo, one of the Banister House interns, said: “I always knew that fossil fuels were harming the environment and think solar is a great idea.

“Working with Hackney Energy as one of the Banister interns has showed me it is possible to make solar work in the UK. A lot of people on the Banister Estate don’t really know about solar and how it’s going to benefit them – we are showing them that it can save you money and is great for the environment.

“One of my main aims is to take solar to other countries that don’t have electricity. My mum lives in Nigeria and when the only electricity provider turns the power off, she has to use a generator just so she can call me.

“Even to do simple things, like a child coming home to do their homework, is impossible without electricity. They need an alternative.”