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Catalyzing worker co-ops & the solidarity economy

The Limits of Idealism

by Nathan Schneider

November 18, 2016

Last night, at the Denver release event for Ours to Hack and to Own, an attendee asked what the biggest challenge is for platform cooperativism right now. I was tempted to say what most people in the movement would say, I suspect: financing. But I couldn’t. A few minutes earlier I’d been speaking with a staff member at a local community bank who reminded me that she would love to invest in co-ops, but there aren’t enough fundable startups out there. The Directory has no shortage of financing options, and the list is growing. So I tried another answer: idealism.

In the year between the first platform cooperativism conference and the second one last weekend, we’ve come a long way. Lots of projects, new and existing, have come into view. Policymakers, unions, investors, and techies have been taking this movement seriously, and rightly so. But a good number of the startups that were about to launch last year are still—well—about to launch. And the ones that have launched are not all doing well. (This stuff is hard, and I want to emphasize that I am so, so amazed by all of these courageous pioneers.) There appears to be a common shortcoming, from my various anecdotal conversations: the ideological appeal of being a co-op doesn’t necessarily translate into a loyal user-base or a sound business. It turns out that, co-op or not, enterprises need to earn their users.

I’m reminded of something the great co-op developer Enric Duran once told me as we were walking through Paris to a meeting with a credit-union president: “I want to create commons for commoners, not for people who talk about the commons.” I felt pretty humbled by that, because I’d been geeking out and asking him a lot of theoretical questions about the commons. And I think the history of cooperative enterprise presents a similar lesson; the most successful co-ops are those that meet people’s needs better than they could otherwise be met. They’re not successful because they appeal to fans of co-ops.

I’ve had the privilege over the past few months to spend a good amount of time with Brianna Wettlaufer, Nuno Silva, and Margaret Vincent of the stock-photo platform co-op Stocksy United (which was founded, I should note, before the term “platform co-op” was coined). Stocksy is proud of its co-op identity, to the point that “co-op” is on the company’s logo. By making its photographers co-owners, it has been able to succeed in a highly competitive market by securing better photographers and higher quality work than its much larger competitors. But it has had more than just cooperation going for it.

The reason Brianna and her co-founders believed the co-op model would succeed in their market was because they knew their market really, really well. They’d actually been executives at a company that would be one of their major competitors, so they knew its shortcomings inside-out. They knew how to find well-paying clients. It also helped that they had a million dollars or so to invest upfront—but that might have been raised in other ways based on their track record, and it wasn’t long before they paid themselves back with revenue. Now, they’re turning down investors left and right.

As proud as Stocksy is about being a co-op, the company doesn’t let that get in the way. You can tell immediately how much the executives care about their members, and how they love being accountable to that membership rather than a bunch of random investors. But they also take their role seriously as leaders, making sure that they have the room to make the big, quick decisions that are necessary in a fast-moving industry. They also ensure that their staff members have the authority to make decisions in their domains without, for instance, putting everything up to a vote with the whole co-op.

You see the effect: Stocksy does what it does really excellently. It’s there even in what most people don’t see. Once, over lunch, Nuno allowed me a glance at the annual reports that members receive. They were works of art.

Stocksy is a co-op, and it uses cooperation as both a competitive and ethical advantage. But Brianna and her team don’t use the fact of being a co-op as an excuse not to also be a really sound business that clients turn to because its product is awesome.

A lot of the same features, also, are at work in Green Taxi Cooperative, a platform-powered co-op that is now the largest taxi company in the state of Colorado. Its members are mostly very experienced taxi drivers in the region, many of whom were highly educated professionals in other fields in their home countries. They have hired expert office staff and legal support. And they have turned to cooperation in large part because it’s a way of significantly reducing the cost of doing business.

I’m one of those who believe that cooperation is a good in itself, and that the rules of markets should be changed to give co-ops intrinsic advantages over extractive businesses. But in most of our circumstances, this isn’t the reality yet. Even if it were, a lovely vision still wouldn’t guarantee a successful enterprise. For those who want to move their platform co-op projects beyond the limits of idealism, here are a few lessons from what I’ve observed, both across our movement and back through co-op history:

  • Experience – Make sure you know your market inside out, or that you have people on your team who do. How can you convince market experts to join?

  • Competitiveness – Design a cooperative model that creates competitive advantages as well as ethical alignments. What can you do as a co-op that you couldn’t do otherwise?

  • Excellence – Don’t expect any breaks because you happen to be a co-op. Many potential clients, and even members, probably won’t care, or won’t care very much. What will make people who couldn’t care less about co-ops want to join?

  • Leadership – Being accountable to members doesn’t mean abdicating the task of leadership, especially in large organizations. I, for one, am glad that my credit union isn’t calling me every hour of the day to make sure I agree with its decisions—but I’m also glad it’s not calling Wall Street either. What trust and authority needs to be carved out to enable leaders to play their roles effectively?

  • Flexibility – A lot of the most exciting new co-op models I’ve seen (like Enspiral and SMart) have fostered powerful cooperation not through existing co-op law but by hacking other legal forms. This has enabled them to focus on innovating around members’ needs, not bending their members to fit some abstraction. What if you threw out the rulebook for a moment?

I say all this as an idealist, through and through. I believe the promise and potential in cooperation is that it’s a way of grounding our economy in human needs and wants, giving us each the time, space, and power to live out our most cherished commitments. But part of this tradition’s glory, too, is its practicality, and its capacity to include people whose idealisms don’t happen to be fully identical. If you’ve read this far, I bet you’ve got plenty of idealism to go around. What about the rest?