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> We all know what products companies/individuals would pay for, because we used to build/buy them. I disagree. Knowing what to build is the hardest part of t

> We all know what products companies/individuals would pay for, because we used to build/buy them. I disagree. Knowing what to build is the hardest part of the tech industry. It's why the industry funds a constant stream of failing startups: it's the trial and error process of finding out what the world actually needs built. Worker coops will work great for the successful products, but most are failures. Who pays for those?

whatshisface 4y ago
>Worker coops will work great for the successful products, but most are failures. Who pays for those? The people who invested to start them. A co-op is just when the stakeholders get together to buy something (shares in the startup, in this case) instead of having a handful of not-so-informed and partially disinterested investors provide liquidity.
- andrewmutz 4y ago
  So in this example, are the laid-off workers investing money to the coop? Are they getting paid? Who contributes the money for the marketing budget, for example? And if the people investing aren't the workers, how is it different than the VC model?
  - whatshisface 4y ago
    The people investing are the workers, and (I am including all co-ops here, not just the one that we're discussing) sometimes the customers.
    - andrewmutz 4y ago
      So this model only works if the laid-off employees can self-fund the new company, right? and they can afford to lose the invested capital if the startup fails?
      - whatshisface 4y ago
        Maybe that explains why there aren't a lot of co-op grocery stores or hardware companies compared to the number that used outside investment or the capital of one individual rich person to get started, but software engineers are in a better position to do this than most professions that I can think of.
        drexlspivey 4y ago
        Can you explain with some detail how would this work? Because I can’t make it work in my head. Say you find 100 tech people that can afford to put $100k each to start the company. Then what? Do they put up money and work for free? If you have to give the money back in 1 year as a salary what about the second year? How about marketing budget, office space, equipment etc?
        whatshisface 4y ago
        In a startup with investors you have money coming from the investors and equity going to them, expenses leaving the company, and money going to and work coming from employees. For a co-op you draw that diagram but have the equity and money arrows that were connected to the investors connect to the employees, with some of the money cancelling out (working for equity, not for free.) As for why the employees would work for equity, well, they'd value it for the same reasons the investors would. If 1M shares is worth $20M to a group of investors it should be worth the same to 100 employees. You're obviously going to be using personal runway, which millionaires have more of than average workers, but SWEs have been making enough money over the last 30 years that it will be easier for them than almost any other profession.
        Kalium 4y ago
        Equity is valuable to investors in no small part because they have the expectation that they'll be able to sell it should the enterprise become very successful. That isn't usually available to a cooperative - there generally isn't a liquid market. Something is only worth what you can sell it for. If you can't readily sell your equity to anyone but your fellow worker-employees, how sure are you that it'll be worth the same to them as it might be to investors?

whatshisface 4y ago

>Worker coops will work great for the successful products, but most are failures. Who pays for those? The people who invested to start them. A co-op is just when the stakeholders get together to buy something (shares in the startup, in this case) instead of having a handful of not-so-informed and partially disinterested investors provide liquidity.

andrewmutz 4y ago
So in this example, are the laid-off workers investing money to the coop? Are they getting paid? Who contributes the money for the marketing budget, for example? And if the people investing aren't the workers, how is it different than the VC model?
- whatshisface 4y ago
  The people investing are the workers, and (I am including all co-ops here, not just the one that we're discussing) sometimes the customers.
  - andrewmutz 4y ago
    So this model only works if the laid-off employees can self-fund the new company, right? and they can afford to lose the invested capital if the startup fails?
    - whatshisface 4y ago
      Maybe that explains why there aren't a lot of co-op grocery stores or hardware companies compared to the number that used outside investment or the capital of one individual rich person to get started, but software engineers are in a better position to do this than most professions that I can think of.
      - drexlspivey 4y ago
        Can you explain with some detail how would this work? Because I can’t make it work in my head. Say you find 100 tech people that can afford to put $100k each to start the company. Then what? Do they put up money and work for free? If you have to give the money back in 1 year as a salary what about the second year? How about marketing budget, office space, equipment etc?
        whatshisface 4y ago
        In a startup with investors you have money coming from the investors and equity going to them, expenses leaving the company, and money going to and work coming from employees. For a co-op you draw that diagram but have the equity and money arrows that were connected to the investors connect to the employees, with some of the money cancelling out (working for equity, not for free.) As for why the employees would work for equity, well, they'd value it for the same reasons the investors would. If 1M shares is worth $20M to a group of investors it should be worth the same to 100 employees. You're obviously going to be using personal runway, which millionaires have more of than average workers, but SWEs have been making enough money over the last 30 years that it will be easier for them than almost any other profession.
        Kalium 4y ago
        Equity is valuable to investors in no small part because they have the expectation that they'll be able to sell it should the enterprise become very successful. That isn't usually available to a cooperative - there generally isn't a liquid market. Something is only worth what you can sell it for. If you can't readily sell your equity to anyone but your fellow worker-employees, how sure are you that it'll be worth the same to them as it might be to investors?