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Option 3: form a worker owned co-op and distribute profits between members instead of shareholders and management.
by candiddevmike 4y ago
Option 3: form a worker owned co-op and distribute profits between members instead of shareholders and management.
- silent_cal 4y agoDo you have any examples of this actually working?
- candiddevmike 4y agoIn a few years I hope to have a company working like this.
- mcbishop 4y agoRead: Reinventing the Organization
- zibby8 4y agoAny organization where people have the title "partner" is usually structured this way. E.g. I think big accounting firms like EY use this model.
- candiddevmike 4y agoNo, I'm not referring to a partnership. See my comment in the other thread. Equality/equity for all.
- jarofgreen 4y agohttps://www.coops.tech/ https://www.coops.tech/ has many. There was an earlier thread with others - I'll try and find it later, maybe.
- willio58 4y agoThis would take a lot of management though.. What happens if someone is contributing a lot less than the others? Or a lot more?
- candiddevmike 4y agoWhat happens in any other company in this situation?
- willio58 4y agoMost of the time? Nothing. Which is fine if you don’t mind putting in more effort for the same pay as someone in your co-op, but at that point why are you in a co-op?
- mikrl 4y agoI don’t know but I’d probably reach out to other co-ops to see how they solve the freeloader problem. Co-ops exist in industries that require more management than SWE, no reason it couldn’t work for devs too. Plus, if your first and primary concern is the hard problem of who does more than whom, maybe you just aren’t temperamentally suited for a coop.
- willio58 4y agoI don’t discount the feasibility of co-ops, but to say they require no management is simply untrue.
- tomatocracy 4y agoThere's also the partnership model of accountants and lawyers - as a normal part of the career ladder, everyone at or above a certain level of seniority collectively owns the firm.
- candiddevmike 4y agoI prefer equality for all. Most partnerships exclude certain positions from becoming a partner, and you typically have to buy out a partner to become one (thus ensuring only the "right people" become partners).
- zackmorris 4y agoThis is my dream, something like https://www.humblebundle.com https://www.humblebundle.com but an ongoing effort. Instead of one winner/influencer with a long tail of paupers, the money would be split evenly or through a formal process involving tenure/credentials/experience and/or a minimum payout on individual successes of maybe 10-20% like a royalty. The main goal of this would be to provide runway outside of the venture capital status quo. Basically a scalable UBI model that doesn't require a huge buy-in by the general public. As far as who's pulling their weight or not, I believe that framing is a fallacy. Success is stochastic now, meaning that it gets increasingly difficult to predict who will win. That's why VCs invest in 10s or 100s or startups to find a winner that supports the rest, and why all that matters is capital, at least to a first order approximation. This would give us some leverage to start removing the artificial barriers to entry (like how banks generally only loan on assets, not potential) and transition to something more like the Star Trek economy where everything is automated and only machine labor and unearned income is taxed, and the economy is large enough to provide an ever-growing stipend for everyone.
- gruez 4y agoWhat happens if you need capital? If employee A only has $1k to spare, but employee B has $10k to spare, should everyone's contributions be capped at $1k? Your model could work for businesses that aren't capital intensive (eg. consulting shops), but won't work for anything that requires a runway.
- tstrimple 4y agoThat capital doesn't have to be reflected as a percentage of ownership does it? What if they were structured as loans to the company which are paid back with interest separate from dividend payments from ownership? Then people who "invest" financially into the company still get rewarded for it, but they can't just buy up all the profits with an ownership position. I'm not deep into this area, so I don't know what sort of regulatory (or otherwise) hurdles this approach would face.
- spywaregorilla 4y agoIt does not. You can make whatever terms you want. You don't need to contribute any capital to get a share.
- gruez 4y ago>That capital doesn't have to be reflected as a percentage of ownership does it? What if they were structured as loans to the company which are paid back with interest separate from dividend payments from ownership? Why would anyone want to invest in a highly risky venture (ie. immature tech companies) with capped upside? It's the same reason why VC companies want equity, not debt obligations in return for their investment.
- tstrimple 4y agoPresumably because they believe in the model. The upside comes from the cooperative ownership. Clearly this isn't intended to attract VCs, but to encourage financial investments from existing employee owners.
- UltraViolence 4y agoBut how would you manage such a company? It's difficult enough having a management team and board of directors running the show. If everyone in the company has a say it may become unworkable. Interested in responses.
- moritonal 4y agoCoops are a thing, at least in the UK. The gist is it works like any other company, everyone simply owns a share of it, and according to some rules some have more tha others. Management is still like a normal company, as is pay and everything else. Its simply dividends are paid to everyone who works there.
- UltraViolence 4y agoBut this implies they won't be able to secure money from investors to grow their company. They can only borrow or sell bonds.