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Open Enterprise Cooperative:

A Business With a Unique Message

By Ajowa Nzinga Ifateyo

Open Enterprise Cooperative is one of the few workplaces in the country where employees are required to openly and explicitly talk about sex.

That's because selling healthy and positive sex toys and sex information is their business.

The 100-member California-based worker cooperative is both women-owned and worker-owned. It is also one of the San-Francisco Bay Area's largest worker's cooperatives. Last year its revenues were $10 million.

The business allows owners to not only earn a living, but to impact the world, they say, with their “sex-positive” message, while at the same time give them the kind of freedom that is virtually unknown in traditional jobs.

“Some people are attracted to us because we are sex-positive; some because it's a co-op,” said Carol Queen, staff sexologist, and one of the original cooperators. “We're a business where people can be themselves. They don't have to be too corporate, or to hide their private lives. We have diversity of all kinds, especially orientation.”

Open Enterprise is a complex operation which includes Good Vibrations retail stores in San Francisco and Berkeley, Good Vibrations mail order catalog and three publishing houses: Down There Press, Passion Press and Sexpositive Productions. Down There Press's The Period Book is probably one of the best publications to teach young girls about menstruation. Still Doing It: Women & Men Over 60 Write About Their Sexuaity , recently won the Independent Publisher Award.

The business first started in 1975 when sex therapist Joani Blank discovered that there wasn't much available to teach sexuality to her clients. She started Down There Press to publish books about sexuality for her clients and the public that was not available in mainstream bookstores. Her first book, The Playbook for Women About Sex, was published that same year. That was followed by The Playbook for Men About Sex in 1976.

A year later she opened the first Good Vibrations retail store in San Francisco's Mission District. The store sold vibrators and books in a well-lit alternative to conventional adult bookstores. Encouraged by good customer response, in 1985 Blank also opened a mail order business.

In 1987, Blank incorporated the business with herself as the sole board member and stockholder. A year later she began selling videos as part of the Sexuality Library.

Around the same time, the business began discussions about democratic management. She had been encouraging staff to participate in decision-making. Blank was a member of Briarpatch, a support network of small business advocating “right livelihood.” Their principles were openness, honesty, community service and sharing resources. She used these principles in her business.

Blank began pursuing other interests and the staff met monthly to discuss policies and procedures, including setting their own salaries.

Deciding she no longer wanted to be in charge, Blank later offered the store to the employees.

The choice was risky: either take a chance at owning their own businesses, or be bought out by some big sex company and have the mission change and possibly lose their jobs.

“Everybody was scared about that,” Queen said. The group decided to take on the business.

“It was a step into the unknown for everyone,” said Queen. “We did a lot of education to catch ourselves up.”

That education included talking with members of the Arizmendi Cooperatives and Rainbow Grocery cooperative, going to training sessions at the University of California-Davis, and attending yearly conferences at Breitenbush sponsored by the Western Cooperative Conference. They also researched Mondragon, the Basque region co-op that has been a model and inspiration for much of the co-op world.

In 1990, twelve members started the co-op.
“We shaped ourselves initially as a Mondragon styled co-op,” she said.

The initial investment for the new owners was $500. Now the buy-in is $630. They have a year to pay and the payment can be deducted from payroll.

“It's pretty painless,” Queen said.

When the new members become owners, there's hand-clapping and celebratory remarks and “a little extra money in their paychecks,” Queen said.

Member-owners often has some experience with sex politics such as having worked for Planned Parenthood, or organized a Gay, Lesbian, Bisexual Transsexual chapter in school. And they have to be pretty comfortable discussing sex. New employees are required to take 30 hours of sex education.

In addition, new members who are on the “owner track” are also required to read monthly financial statements, take classes in “Finances 101,” “Worker-Owner 101,” and Co-op 101.”

After six months and once their training is finished, new members have to win 100 percent approval vote from their immediate core department, and a high percentage of other workers.

The business is not a collective, so there are different pay levels for certain jobs in order to attract the right kind of staff, though their professional positions do not pay the same as those in traditional jobs, Queen said. They also have managers.

At the end of the year, if profit is not needed to keep the business healthy, the money is divided up among employees and paid as “matronage” (instead of patronage). The matronage pay is calculated by taking the pool of money left after all bills are paid and divided by the total number of hours worked.

“We utilize this as one of our strategies for egalitarianism,” she said. Other benefits that Open Enterprises worker owners earn are:

· 30-40% discount; 30 is basic; 40% is paid to employees with 10 years or more on the job;

· Health benefit with 20 hours, and a “solid” package of benefits once becoming an owner;

· A generous leave policy that allows workers to choose which holidays they want to celebrate including Pagan holidays and their birthdays;

· A comfortable dress code that allows people to wear pretty much what they want including tattoos;

· Loads of sex information;

· Participation in a 10% discount program with other co-ops in Northern California.

One of the best benefits, Queen said, is the ability to shape the policies of the company and help change the world.

“For me, just to be able to come to work and say I am part owner of this; I can help shape lives,” she said. “I know I have options. If I put energy into it will bear fruit for me. I can change the world. In a traditional workplace, that's really not the case. I really value that and I think most of the others do too.”

But being a member of a collectively owned business has its challenges, too.

“Things move slowly compared to a sole practitioner who can look at the Dow Jones and snap their fingers and make a decision,” Queen said. “What's good about it is also what's challenging about it. It's also a very big responsibility.”

That responsibility also includes staying afloat so that they can practice their informed sexuality philosophy.

“It would be more than an economic hardship if anything happened to this business,” she said. “We have a responsibility. We're seen by all around as the place to go for information on sexuality. We are the bottom line when it comes to sexuality.”


What do you think about the need for a worker co-op federation?

Fabulous! It's a great idea. One of the things we have come up against as we grew and expanded is there is very little savvy business information for co-ops. There are not many people who know who how this [cooperative business] works, who know all the laws that apply. We're lucky we have a Tim Huet. (Huet is one of the founders of the Association of Arizmendi Cooperatives, which provides technical assistance cooperative in the San Francisco Bay Area. He also serves other worker cooperatives as an organizational consultant and attorney.)

Hardly anybody, including those entities such as the Franchise Tax Board, workers comp people and government entities that monitor workplace safety, know anything about worker co-ops. We have had to educate them every year, and over and over again.

A national organization could offer help and advice about the history of regulation and finances as far as worker co-ops are concerned. Of all the federal regulators, nobody thinks about co-ops. All of these issues will be appropriate for every co-op in the organization—the business knowledge we could provide with that. That's what worker co-ops are about. A federation would also help consumers and citizens understand a different way of doing business and to help make good decisions with their consumption.

-Carol Queen

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