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Yes, absolutely, but there are pitfalls: * Somehow finances have to work, which is usually a harsh reality for some. Ex: Hey we can't pay workers $250/hr witho

Yes, absolutely, but there are pitfalls: * Somehow finances have to work, which is usually a harsh reality for some. Ex: Hey we can't pay workers $250/hr without raises prices to above what customers are willing to pay * Consumers despite "Least common denominator" which is often the result of "design by committee". Usually consumers are after something niche, unique, artistic, and creative, which is the inspiration or vision of an individual. > As for making business decisions, it’s done democratically. The entirety of the member-owner group votes on major decisions, and the bylaws outline scenarios where employees are authorized to act independently of a vote I don't see this working in the long term unfortunately unless a majority of the workers have a lot experience with business, especially something as cashflow-sensitive as a restaurant (which typically operate on razor-thin margins). But I do wish them luck in their experiment.

8f2ab37a-ed6c 3y ago
It would be interesting to see reports of long-term experiments of this sort, see how businesses run this way fare over time and whether this sort of model is unsustainable, or if these people are onto something effective that stands the test of time. Any other restaurants who have tried this sort of model in the past and stuck with it?
- kikokikokiko 3y ago
  The simple fact that you never ever heard about something like that, tells you all you need to know aboit the long term prospect of business owned by "the collective". In my part of the world we have a saying " what fattens the cows is the owner's gaze". A company that belongs to everyone working there belongs to no one, and it will eventually become a freeloader's dream. I have heard of one or two examples of this things being tried, one even a restaurant close tomy home town. It never lasts.
  - ska 3y ago
    >The simple fact that you never ever heard about something like that actually there are lots of examples, so it can't be that simple.
  - brnaftr361 3y ago
    Mondragon Corporation is the poster child for worker-owned cooperatives and has been both successful and robust for decades. I believe it was Ford and GM, no doubt others, were studying their model at some point. But convincing stakeholders - including lenders - to divest interest in a company after a set period is, from my understanding, why the model has such a hard time in the US.
p1necone 3y ago
> Somehow finances have to work, which is usually a harsh reality for some. Ex: Hey we can't pay workers $250/hr without raises prices to above what customers are willing to pay If it was worker owned wouldn't you just pay everyone some reasonable wage that the business can afford and then also split profits evenly?
- dnissley 3y ago
  Don't forget to split the losses evenly as well!
  - dgb23 3y ago
    You are joking, but that's not untypical for worker owned businesses. There are studies about coops that show that workers are more engaged in the business and will decide to suffer temporary wage cuts in hard times (opposed to layoffs) in order to maintain the business long term. Two friends of mine actually have worked in the same restaurant coop at different times. The pay was fair, the conditions were good, the people were great and they had a high degree of agency. As you can imagine, they had high standards in terms of where they buy, what they produce and so on. Preferably local, fair etc. It's also a restaurant that exists since a long time. The negatives that both reported were: - Long meetings each month, there was no hierarchical structure. When the better argument wins (and not from who it is) then you need time to discuss things. - Criticizing or firing people is emotionally taxing. There was _never_ a complaint of shared responsibility in financial terms. That's a given. That's what you sign up for.
- Nifty3929 3y ago
  Yes, but only if there is enough money to pay the base wage in the first place, which is far from a foregone conclusion. Let alone having any profit left to distribute.
  - p1necone 3y ago
    Sure, but that's not a problem unique to worker owned businesses, any business without enough revenue to pay its bills is going to fall over.
SamWhited 3y ago
In my experience the opposite is almost always true: > Somehow finances have to work, which is usually a harsh reality for some At most places I've been involved in the workers are more careful with money because they are standing together and want the business to succeed. They have transparency into the finances, so they know what's possible and try to make sure not to go overboard. > Consumers despite "Least common denominator" which is often the result of "design by committee". Usually consumers are after something niche, unique, artistic, and creative, which is the inspiration or vision of an individual. All of the worker owned places I've been have been exactly this: creative, interesting, and individual. These aren't giant chains designed in a megacorp boardroom. > I don't see this working in the long term unfortunately unless a majority of the workers have a lot experience with business, especially something as cashflow-sensitive as a restaurant (which typically operate on razor-thin margins). But I do wish them luck in their experiment. There are many of these and though I don't know the success rate compared to hierarchical businesses in the food industry in particular, co-ops have a higher success rate than hierarchical businesses in general and there's been a lot of research into it, though I don't know if an exact "why" has ever been established. I suspect it's that there's no handful of individuals who can get greedy and ruin things by trying to maximize profit. Even for-profit co-ops generally have a better sense of balance since the workers don't want their business to dry up and if one person gets greedy there are lots of other people to keep them in check.
- Aunche 3y ago
  > At most places I've been involved in the workers are more careful with money because they are standing together and want the business to succeed. This doesn't contradict anything GP said. Worker owners are careful with company money because they have to be, due to being invested into it. That's a responsibility that not everyone wants, especially when an organization approaches the scale of tragedy of the commons. How many regular voters bother to read the raw, uneditorialized finances that the government provides? > co-ops have a higher success rate than hierarchical businesses This is only true when you're defining success as a binary "does this company still exist." Worker-owned companies are significantly less likely to expand because they would be creating risk but would have to share the additional profits with the new hires. This would especially be the case for a restaurant which doesn't benefit from economies of scale (see Publix supermaket as an example of a worker-owned corporation that does). Even if Jude's can sustainably pay $30/hour, it would take hundreds of similar restaurants to match the success of a single "nice" privately owned restaurant chain like In-and-Out, which also pays above-market wages to thousands of employees, albeit not as above market as Jude's.
Avshalom 3y ago
>> Usually consumers are after something niche, unique, artistic, and creative, which is the inspiration or vision of an individual. I mean, I feel like a quick survey of the american restaurant landscape implies that consumers are mostly after something reliable for their time and money. but also the idea that front of house having a say in the business would mean the menu is anymore design by comittee than any other restaurant is weird, especially because menus aren't generally decided by the owner of the restaurant anyway.
saled 3y ago
These points are solved by the workers electing an executive or directors who makes those decisions, until the workers are sick of them and replace them in an AGM or an emergency meeting. Works the same as shareholders.
- toyg 3y ago
  In the long run, that is bound to generate a separate managerial class, with all that it entails. It's how most cooperatives eventually die: they turn into regular businesses.
  - Affric 3y ago
    Well said. Good co-ops that last have the decisions made by those working there. And it's a lot of work.
    - prawn 3y ago
      And I'd guess that a restaurant doesn't have the scale to shoulder a management tier and the costs involved.
    - deleted 3y ago
      [deleted]
    - __loam 3y ago
      Sure but nobody is pretending that there shouldn't be some kind of way of making decisions in these organizations. The point is that the people making those decisions were chosen by and accountable to the workers at the firm, not external shareholders. The incentives are completely different.
  - derefr 3y ago
    I mean, that’s fine, no? As long as regular non-manager employees are still on the corporation’s Board, the managerial class (CEO et al) still all have the Board’s sword of Damocles dangling over their neck at all times.
avgcorrection 3y ago
> Somehow finances have to work, which is usually a harsh reality for some. Ex: Hey we can't pay workers $250/hr without raises prices to above what customers are willing to pay Somehow finances have to work, which is usually a harsh reality for some owners. Ex: Hey we can't have collective payout to investors totaling $10M this year without raises prices to above what customers are wiling to pay.
- spacebanana7 3y ago
  This is one of the main advantages owner operators have over PE funded or publicly traded businesses.
  - SoftTalker 3y ago
    Also a reason that at least some (perhaps many?) franchise restaurants don't allow owner-investors, they must be owner-operators. McDonald's is one, at least they were last I knew.
ska 3y ago
> unless a majority of the workers have a lot experience with business, That may be the wrong way to think about it. Vanishingly few people have enough experience in all aspects of any business to make good decisions without others inputs. So in many cases we are reliant on someone's domain expertise, not to make the decisions, but to get the the right decision point. Once the pros and cons are laid out properly, anyone with a real stake can contribute to the decision. The bigger the decision, the more people with a stake need to be involved. In the typical business world this shows up all the time: "that's a board-level decision", "we need all the execs to agree on this one", etc. We don't know the actual implementation, but it's possibly it's just a reasonable reflection of that practice into collective ownership...
soligern 3y ago
How do you fire people? Do you just get voted off the island? There would need to be managers.
- Scarblac 3y ago
  They just get voted off the island, yes.
jancsika 3y ago
> * Consumers despite "Least common denominator" which is often the result of "design by committee". Usually consumers are after something niche, unique, artistic, and creative, which is the inspiration or vision of an individual. Dollars to donuts you wrote that bullet point without having read the article: * the extant worker-owned restaurant discussed in the article is the epitome of "something niche, unique, artistic, and creative," which was "the inspiration or vision of" the owner making a pitch to the staff to become worker-owned. It even mentions getting employees because of the unique approach. I can't imagine they haven't drawn non-trivial consumers to their restaurant for the same reason * pictures of the food exist in the article In short: I know "design by committee" food. I've worked with "design by committee" food. That fried chicken sandwich, sir, is no "design by committee" food.
willio58 3y ago
> Hey we can't pay workers $250/hr Unless those workers were looking to make half a million per year I think that's okay.
tlogan 3y ago
I completely agree. Restaurants operate on razor-thin margins and are primarily about efficient management, not the workforce. The only successful worker-owned models I’ve seen involve a tight-knit partnership, like a husband as the chef and wife as the bartender. And that is their “part time” job: the majority of their time goes into tough logistical tasks—dealing with suppliers, managing food costs, managing lease, fixing, schedule, and so on.
expazl 3y ago
> Hey we can't pay workers $250/hr without raises prices to above what customers are willing to pay There are restaurants that charge north of 800$ per person which are always fully booked half a year in advance with glowing reviews even from the worst critics hellbent on being negative. You certainly can pay workers $250 an hour without raising prices above what customers are willing to pay depending on the product. Of cause that's not the case at those restaurants, the workers make closer to $30 bucks an hour and the money goes to the owner/investors. Imagining a restaurant with that kind of success where the owners and investors are the workers is a nice thought. I know of one of these restaurants that always top the list of best restaurant in the world basically gave their main dish washing guy a small owning stake because the owner/chefs like him, and he's now making way more than just $250 an hour washing the dishes. But that is of cause just a case of the rich throwing leftover bones to the dogs eating scraps at the table for shits and giggles, not a case where workers owning a restaurant leads to a fair distribution of the profits for all of them.
- TulliusCicero 3y ago
  Restaurants charging $800 per person are an extreme outlier. It's like talking about the car market in terms of Bentleys and McLarens. 99.9% of restaurants cannot charge super high prices, you're just being pedantic.
  - KptMarchewa 3y ago
    Even more than Bentleys. There are three Michelin star restaurants that cost fraction of that.
- deleted 3y ago
  [deleted]
- tashoecraft 3y ago
  I’m going to call bs on that. I’ve dined at high end restaurants and there is no way you can pay people that much and survive. The problem is everything cost more. It’s not like it’s a $20 meal that’s 800. There’s expensive plates, bowls, silver wear, custom presentation items. High end materials every where. You’re hiring more staff so that you can pay attention to every detail. The wine cellar might have several million dollars worth of wine in it.
nkrisc 3y ago
> Consumers despite "Least common denominator" which is often the result of "design by committee". Usually consumers are after something niche, unique, artistic, and creative, which is the inspiration or vision of an individual. The committee can decide to delegate tasks and decisions to individuals and set roles and responsibilities for individuals as well.
hot_gril 3y ago
Here's the reduced-down version: You get some stake for free when you join, it entitles you to a fraction of the profits while you're there, and you lose it if you quit or get voted off the island according to some bylaws. Stake also gives you voting power for hiring new employees (including managers), and how much stake to give them. And nobody can buy shares, especially those who aren't employees. To simplify things, there are no wages. But idk, this just sounds like a worse version of a regular corporation. New employees' stakes will pay out in a way that's competitive with local wages. More profits than usual will have to be paid out rather than reinvested in the business (think high dividend yield, low P/E), otherwise new employees just needing to pay bills won't trust it. If they want to offer some wage and less stake, it's the same.
- TylerE 3y ago
  Sounds like a great way to turn a business into even more of a hyper-politicized environment than it already is. It becomes not about what you can do, but who you make like you.
  - hot_gril 3y ago
    Yeah, or it works ok at a small scale but you can never expand, and a competitor (maybe your own ex-employees) eats your lunch like what happened to Cheeseboard. Which is still ok, you can be in that cool little niche if that's what you like, but don't tell me it's a better model overall.
    - DangitBobby 3y ago
      It's almost certainly a better for the people who are working somewhere they actually care about for more than minimum wage with performance potentially tied to income.
      - TylerE 3y ago
        Except that looking at the two linked here (Seward and the pizza place) both are struggling - raising prices, cutting hours, and both are essentially begging the community to fund them so they continue to exist.
II2II 3y ago
Noone is saying that restaurant employees would make $250/hour. While the rates cited in the article are higher than most employees earn in equivalent environments, the are still modest in comparison to other industries (and they are absorbing some risk by buying shares, something that most $30/hour employees don't do). The committee that you spoke of have a vested interest in the outcome of the decisions and, in certain cases, the decision must have full support of the board. While this will have problems, it is unlikely to suffer from the symptoms that most people think of when they think of something being designed by committee. The other thing to consider here is that this is a relatively small business. As such, it is possible to recruit a board that is more likely to share a common vision and train them in operating a business. We are not talking about a fast food chain with tens of thousand of employees and little interest in training beyond the skills to fit a singular role. I don't know if operating a restaurant as a cooperative is viable in the long run, but I am not going to argue against it from a prejudiced position.
amrocha 3y ago
I love that when it comes to tech companies, managers are all bumbling idiots and should all be fired to allow the workers to get the job done. But as soon as a working class business tries that, it apparently doesn't work in the long term.
- marcellus23 3y ago
  HN is composed of individuals, it's not a hive mind. Different people have different opinions. Besides, comments here tend to complain about middle management being useless, not leadership.
  - deleted 3y ago
    [deleted]
  - amrocha 3y ago
    I know, but I feel like the community sentiment is fairly consistent on these topics. I could be wrong though. Also, restaurant owners are not much different from middle managers in terms of scale of responsibility.
  - __loam 3y ago
    Leadership is more useless than middle management.
    - edu 3y ago
      There’s plenty of bad leadership, but there’re also some great leaders.
- logdap 3y ago
  In small groups where decisions must be made in a timely and decisive manner, a mediocre leader is often better than the best democratic committee. Even in programming teams, somebody needs to put their foot down eventually or things will be bikeshedded to death. FOSS projects too, generally benefit from a BDFL. Be careful about extrapolating this out to the rule of countries though, dictatorships can make things go south worse than any other system. At least with FOSS projects, people can fork without fleeing their homes.
MuffinFlavored 3y ago
> * Somehow finances have to work, which is usually a harsh reality for some. Ex: Hey we can't pay workers $250/hr without raises prices to above what customers are willing to pay This is one of the most interesting parts of business to me. How do a bunch of people below the "head honcho/top dog" collectively agree "you're right, I don't selfishly look out for myself and think I'm worth $99999999/hr, that person does more than me and their skillset is worth more than mine, I will bow out and not contend to ask for more than them an hour" From there, you get hierarchy You'll have one person paid the most at the top, and it trickles down In worker owned, the people at the bottom... why are they ok with being paid "relatively" the least? Why don't they feel like their work is entitled to as much as those making more than them? How are they ok with not looking out for their own self interest at all times?
- popinman322 3y ago
  Everyone is different and has different motivations. We don't all think the same way, either. Some workers just want a stable, sane work environment and are willing to compromise on pay for other benefits. These same people are typically willing to let others do more work for more pay because it makes their own lives easier. One possible approach: you could do an exercise where everyone gets $N imaginary dollars and they can bid to not do certain tasks. The bid against each task is then the compensation for that task.
  - jimmygrapes 3y ago
    > Everyone is different and has different motivations. We don't all think the same way, either. Spot on! Unfortunately this is also why "everyone is equal" rarely works
    - MrJohz 3y ago
      But nobody is saying that everyone has to be equal. Coops have measurable pay ratios just like everyone else, they just tend not to be as large as non-coops. More important (or harder to find) roles will obviously get paid more. At the end of the day, most people want to get paid, and to get paid, at least in the long term, you need a viable business. So workers tend to make choices that ensure the business is able to survive, because that is more valuable in the long run than lining their own pockets right now and not having a job to go to tomorrow.
brailsafe 3y ago
> Usually consumers are after something niche, unique, artistic, and creative, which is the inspiration or vision of an individual. Consumers want that in theory, but much of the time choose lifestyles that favor the opposite. Basically every suburb is the most generic horrible place possible with a tiny amount of commercial activity relegated to a strip mall in a parking lot wasteland filled with the same few shitty restaurants; where culture goes to die.
smcl 3y ago
> Hey we can't pay workers $250/hr without raises prices to above what customers are willing to pay You seem to be suggesting that workers are cartoonishly naive and have ridiculous demands that cannot simply be met. When in reality they usually just want a living wage, a bit more input on shift planning, things like this. People aren't generally stupid, and if they can get it together enough to form a worker-owned co-op they're not likely to immediately run it into the ground doing stupid stuff like giving themselves a 1000% wage increase.
- Closi 3y ago
  Well they sound like they have picked a higher base wage than average (particularly for servers) and aren’t making a profit. Personally if it’s owner-run I would assume you would be better picking a lower base wage, then sharing profits (with the profits making up that shortfall). That way there is also an incentive to be an owner, and the business is more stable - sounds like if they have picked high wages and low/no profit though they are running it hot and risky from a cash flow perspective. But there aren’t profits for owners to share at the moment - possibly partially because they are overpaying on labour.
  - ChoHag 3y ago
    [dead]
christkv 3y ago
As a parent who is part of running a co op school where only the teachers are paid I can tell you that there is a day to day executive function with delegated powers. The assembly deals with functions similar to a traditional board. That said the two main problems that come up over and over again in our setup are. 1. People don’t understand what being a coop member means legally and financially. They are on the hook for losses for example. 2. It’s hard getting people to volunteer to do needed day to day work. 3. To much drama, every little thing is blown out of proposition and sometime we are forced to use executive privilege to get something done. 4. Coop can distract from delivering the actual services (school).

8f2ab37a-ed6c 3y ago

It would be interesting to see reports of long-term experiments of this sort, see how businesses run this way fare over time and whether this sort of model is unsustainable, or if these people are onto something effective that stands the test of time. Any other restaurants who have tried this sort of model in the past and stuck with it?

kikokikokiko 3y ago
The simple fact that you never ever heard about something like that, tells you all you need to know aboit the long term prospect of business owned by "the collective". In my part of the world we have a saying " what fattens the cows is the owner's gaze". A company that belongs to everyone working there belongs to no one, and it will eventually become a freeloader's dream. I have heard of one or two examples of this things being tried, one even a restaurant close tomy home town. It never lasts.
- ska 3y ago
  >The simple fact that you never ever heard about something like that actually there are lots of examples, so it can't be that simple.
- brnaftr361 3y ago
  Mondragon Corporation is the poster child for worker-owned cooperatives and has been both successful and robust for decades. I believe it was Ford and GM, no doubt others, were studying their model at some point. But convincing stakeholders - including lenders - to divest interest in a company after a set period is, from my understanding, why the model has such a hard time in the US.

p1necone 3y ago

> Somehow finances have to work, which is usually a harsh reality for some. Ex: Hey we can't pay workers $250/hr without raises prices to above what customers are willing to pay If it was worker owned wouldn't you just pay everyone some reasonable wage that the business can afford and then also split profits evenly?

dnissley 3y ago
Don't forget to split the losses evenly as well!
- dgb23 3y ago
  You are joking, but that's not untypical for worker owned businesses. There are studies about coops that show that workers are more engaged in the business and will decide to suffer temporary wage cuts in hard times (opposed to layoffs) in order to maintain the business long term. Two friends of mine actually have worked in the same restaurant coop at different times. The pay was fair, the conditions were good, the people were great and they had a high degree of agency. As you can imagine, they had high standards in terms of where they buy, what they produce and so on. Preferably local, fair etc. It's also a restaurant that exists since a long time. The negatives that both reported were: - Long meetings each month, there was no hierarchical structure. When the better argument wins (and not from who it is) then you need time to discuss things. - Criticizing or firing people is emotionally taxing. There was _never_ a complaint of shared responsibility in financial terms. That's a given. That's what you sign up for.
Nifty3929 3y ago
Yes, but only if there is enough money to pay the base wage in the first place, which is far from a foregone conclusion. Let alone having any profit left to distribute.
- p1necone 3y ago
  Sure, but that's not a problem unique to worker owned businesses, any business without enough revenue to pay its bills is going to fall over.

SamWhited 3y ago

In my experience the opposite is almost always true: > Somehow finances have to work, which is usually a harsh reality for some At most places I've been involved in the workers are more careful with money because they are standing together and want the business to succeed. They have transparency into the finances, so they know what's possible and try to make sure not to go overboard. > Consumers despite "Least common denominator" which is often the result of "design by committee". Usually consumers are after something niche, unique, artistic, and creative, which is the inspiration or vision of an individual. All of the worker owned places I've been have been exactly this: creative, interesting, and individual. These aren't giant chains designed in a megacorp boardroom. > I don't see this working in the long term unfortunately unless a majority of the workers have a lot experience with business, especially something as cashflow-sensitive as a restaurant (which typically operate on razor-thin margins). But I do wish them luck in their experiment. There are many of these and though I don't know the success rate compared to hierarchical businesses in the food industry in particular, co-ops have a higher success rate than hierarchical businesses in general and there's been a lot of research into it, though I don't know if an exact "why" has ever been established. I suspect it's that there's no handful of individuals who can get greedy and ruin things by trying to maximize profit. Even for-profit co-ops generally have a better sense of balance since the workers don't want their business to dry up and if one person gets greedy there are lots of other people to keep them in check.

Aunche 3y ago
> At most places I've been involved in the workers are more careful with money because they are standing together and want the business to succeed. This doesn't contradict anything GP said. Worker owners are careful with company money because they have to be, due to being invested into it. That's a responsibility that not everyone wants, especially when an organization approaches the scale of tragedy of the commons. How many regular voters bother to read the raw, uneditorialized finances that the government provides? > co-ops have a higher success rate than hierarchical businesses This is only true when you're defining success as a binary "does this company still exist." Worker-owned companies are significantly less likely to expand because they would be creating risk but would have to share the additional profits with the new hires. This would especially be the case for a restaurant which doesn't benefit from economies of scale (see Publix supermaket as an example of a worker-owned corporation that does). Even if Jude's can sustainably pay $30/hour, it would take hundreds of similar restaurants to match the success of a single "nice" privately owned restaurant chain like In-and-Out, which also pays above-market wages to thousands of employees, albeit not as above market as Jude's.

Avshalom 3y ago

>> Usually consumers are after something niche, unique, artistic, and creative, which is the inspiration or vision of an individual. I mean, I feel like a quick survey of the american restaurant landscape implies that consumers are mostly after something reliable for their time and money. but also the idea that front of house having a say in the business would mean the menu is anymore design by comittee than any other restaurant is weird, especially because menus aren't generally decided by the owner of the restaurant anyway.

saled 3y ago

These points are solved by the workers electing an executive or directors who makes those decisions, until the workers are sick of them and replace them in an AGM or an emergency meeting. Works the same as shareholders.

toyg 3y ago
In the long run, that is bound to generate a separate managerial class, with all that it entails. It's how most cooperatives eventually die: they turn into regular businesses.
- Affric 3y ago
  Well said. Good co-ops that last have the decisions made by those working there. And it's a lot of work.
  - prawn 3y ago
    And I'd guess that a restaurant doesn't have the scale to shoulder a management tier and the costs involved.
  - deleted 3y ago
    [deleted]
  - __loam 3y ago
    Sure but nobody is pretending that there shouldn't be some kind of way of making decisions in these organizations. The point is that the people making those decisions were chosen by and accountable to the workers at the firm, not external shareholders. The incentives are completely different.
- derefr 3y ago
  I mean, that’s fine, no? As long as regular non-manager employees are still on the corporation’s Board, the managerial class (CEO et al) still all have the Board’s sword of Damocles dangling over their neck at all times.

avgcorrection 3y ago

> Somehow finances have to work, which is usually a harsh reality for some. Ex: Hey we can't pay workers $250/hr without raises prices to above what customers are willing to pay Somehow finances have to work, which is usually a harsh reality for some owners. Ex: Hey we can't have collective payout to investors totaling $10M this year without raises prices to above what customers are wiling to pay.

spacebanana7 3y ago
This is one of the main advantages owner operators have over PE funded or publicly traded businesses.
- SoftTalker 3y ago
  Also a reason that at least some (perhaps many?) franchise restaurants don't allow owner-investors, they must be owner-operators. McDonald's is one, at least they were last I knew.

ska 3y ago

> unless a majority of the workers have a lot experience with business, That may be the wrong way to think about it. Vanishingly few people have enough experience in all aspects of any business to make good decisions without others inputs. So in many cases we are reliant on someone's domain expertise, not to make the decisions, but to get the the right decision point. Once the pros and cons are laid out properly, anyone with a real stake can contribute to the decision. The bigger the decision, the more people with a stake need to be involved. In the typical business world this shows up all the time: "that's a board-level decision", "we need all the execs to agree on this one", etc. We don't know the actual implementation, but it's possibly it's just a reasonable reflection of that practice into collective ownership...

soligern 3y ago

How do you fire people? Do you just get voted off the island? There would need to be managers.

Scarblac 3y ago
They just get voted off the island, yes.

jancsika 3y ago

> * Consumers despite "Least common denominator" which is often the result of "design by committee". Usually consumers are after something niche, unique, artistic, and creative, which is the inspiration or vision of an individual. Dollars to donuts you wrote that bullet point without having read the article: * the extant worker-owned restaurant discussed in the article is the epitome of "something niche, unique, artistic, and creative," which was "the inspiration or vision of" the owner making a pitch to the staff to become worker-owned. It even mentions getting employees because of the unique approach. I can't imagine they haven't drawn non-trivial consumers to their restaurant for the same reason * pictures of the food exist in the article In short: I know "design by committee" food. I've worked with "design by committee" food. That fried chicken sandwich, sir, is no "design by committee" food.

willio58 3y ago

> Hey we can't pay workers $250/hr Unless those workers were looking to make half a million per year I think that's okay.

tlogan 3y ago

I completely agree. Restaurants operate on razor-thin margins and are primarily about efficient management, not the workforce. The only successful worker-owned models I’ve seen involve a tight-knit partnership, like a husband as the chef and wife as the bartender. And that is their “part time” job: the majority of their time goes into tough logistical tasks—dealing with suppliers, managing food costs, managing lease, fixing, schedule, and so on.

expazl 3y ago

> Hey we can't pay workers $250/hr without raises prices to above what customers are willing to pay There are restaurants that charge north of 800$ per person which are always fully booked half a year in advance with glowing reviews even from the worst critics hellbent on being negative. You certainly can pay workers $250 an hour without raising prices above what customers are willing to pay depending on the product. Of cause that's not the case at those restaurants, the workers make closer to $30 bucks an hour and the money goes to the owner/investors. Imagining a restaurant with that kind of success where the owners and investors are the workers is a nice thought. I know of one of these restaurants that always top the list of best restaurant in the world basically gave their main dish washing guy a small owning stake because the owner/chefs like him, and he's now making way more than just $250 an hour washing the dishes. But that is of cause just a case of the rich throwing leftover bones to the dogs eating scraps at the table for shits and giggles, not a case where workers owning a restaurant leads to a fair distribution of the profits for all of them.

TulliusCicero 3y ago
Restaurants charging $800 per person are an extreme outlier. It's like talking about the car market in terms of Bentleys and McLarens. 99.9% of restaurants cannot charge super high prices, you're just being pedantic.
- KptMarchewa 3y ago
  Even more than Bentleys. There are three Michelin star restaurants that cost fraction of that.
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tashoecraft 3y ago
I’m going to call bs on that. I’ve dined at high end restaurants and there is no way you can pay people that much and survive. The problem is everything cost more. It’s not like it’s a $20 meal that’s 800. There’s expensive plates, bowls, silver wear, custom presentation items. High end materials every where. You’re hiring more staff so that you can pay attention to every detail. The wine cellar might have several million dollars worth of wine in it.

nkrisc 3y ago

> Consumers despite "Least common denominator" which is often the result of "design by committee". Usually consumers are after something niche, unique, artistic, and creative, which is the inspiration or vision of an individual. The committee can decide to delegate tasks and decisions to individuals and set roles and responsibilities for individuals as well.

hot_gril 3y ago

Here's the reduced-down version: You get some stake for free when you join, it entitles you to a fraction of the profits while you're there, and you lose it if you quit or get voted off the island according to some bylaws. Stake also gives you voting power for hiring new employees (including managers), and how much stake to give them. And nobody can buy shares, especially those who aren't employees. To simplify things, there are no wages. But idk, this just sounds like a worse version of a regular corporation. New employees' stakes will pay out in a way that's competitive with local wages. More profits than usual will have to be paid out rather than reinvested in the business (think high dividend yield, low P/E), otherwise new employees just needing to pay bills won't trust it. If they want to offer some wage and less stake, it's the same.

TylerE 3y ago
Sounds like a great way to turn a business into even more of a hyper-politicized environment than it already is. It becomes not about what you can do, but who you make like you.
- hot_gril 3y ago
  Yeah, or it works ok at a small scale but you can never expand, and a competitor (maybe your own ex-employees) eats your lunch like what happened to Cheeseboard. Which is still ok, you can be in that cool little niche if that's what you like, but don't tell me it's a better model overall.
  - DangitBobby 3y ago
    It's almost certainly a better for the people who are working somewhere they actually care about for more than minimum wage with performance potentially tied to income.
    - TylerE 3y ago
      Except that looking at the two linked here (Seward and the pizza place) both are struggling - raising prices, cutting hours, and both are essentially begging the community to fund them so they continue to exist.

II2II 3y ago

Noone is saying that restaurant employees would make $250/hour. While the rates cited in the article are higher than most employees earn in equivalent environments, the are still modest in comparison to other industries (and they are absorbing some risk by buying shares, something that most $30/hour employees don't do). The committee that you spoke of have a vested interest in the outcome of the decisions and, in certain cases, the decision must have full support of the board. While this will have problems, it is unlikely to suffer from the symptoms that most people think of when they think of something being designed by committee. The other thing to consider here is that this is a relatively small business. As such, it is possible to recruit a board that is more likely to share a common vision and train them in operating a business. We are not talking about a fast food chain with tens of thousand of employees and little interest in training beyond the skills to fit a singular role. I don't know if operating a restaurant as a cooperative is viable in the long run, but I am not going to argue against it from a prejudiced position.

amrocha 3y ago

I love that when it comes to tech companies, managers are all bumbling idiots and should all be fired to allow the workers to get the job done. But as soon as a working class business tries that, it apparently doesn't work in the long term.

marcellus23 3y ago
HN is composed of individuals, it's not a hive mind. Different people have different opinions. Besides, comments here tend to complain about middle management being useless, not leadership.
- deleted 3y ago
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- amrocha 3y ago
  I know, but I feel like the community sentiment is fairly consistent on these topics. I could be wrong though. Also, restaurant owners are not much different from middle managers in terms of scale of responsibility.
- __loam 3y ago
  Leadership is more useless than middle management.
  - edu 3y ago
    There’s plenty of bad leadership, but there’re also some great leaders.
logdap 3y ago
In small groups where decisions must be made in a timely and decisive manner, a mediocre leader is often better than the best democratic committee. Even in programming teams, somebody needs to put their foot down eventually or things will be bikeshedded to death. FOSS projects too, generally benefit from a BDFL. Be careful about extrapolating this out to the rule of countries though, dictatorships can make things go south worse than any other system. At least with FOSS projects, people can fork without fleeing their homes.

MuffinFlavored 3y ago

> * Somehow finances have to work, which is usually a harsh reality for some. Ex: Hey we can't pay workers $250/hr without raises prices to above what customers are willing to pay This is one of the most interesting parts of business to me. How do a bunch of people below the "head honcho/top dog" collectively agree "you're right, I don't selfishly look out for myself and think I'm worth $99999999/hr, that person does more than me and their skillset is worth more than mine, I will bow out and not contend to ask for more than them an hour" From there, you get hierarchy You'll have one person paid the most at the top, and it trickles down In worker owned, the people at the bottom... why are they ok with being paid "relatively" the least? Why don't they feel like their work is entitled to as much as those making more than them? How are they ok with not looking out for their own self interest at all times?

popinman322 3y ago
Everyone is different and has different motivations. We don't all think the same way, either. Some workers just want a stable, sane work environment and are willing to compromise on pay for other benefits. These same people are typically willing to let others do more work for more pay because it makes their own lives easier. One possible approach: you could do an exercise where everyone gets $N imaginary dollars and they can bid to not do certain tasks. The bid against each task is then the compensation for that task.
- jimmygrapes 3y ago
  > Everyone is different and has different motivations. We don't all think the same way, either. Spot on! Unfortunately this is also why "everyone is equal" rarely works
  - MrJohz 3y ago
    But nobody is saying that everyone has to be equal. Coops have measurable pay ratios just like everyone else, they just tend not to be as large as non-coops. More important (or harder to find) roles will obviously get paid more. At the end of the day, most people want to get paid, and to get paid, at least in the long term, you need a viable business. So workers tend to make choices that ensure the business is able to survive, because that is more valuable in the long run than lining their own pockets right now and not having a job to go to tomorrow.

brailsafe 3y ago

> Usually consumers are after something niche, unique, artistic, and creative, which is the inspiration or vision of an individual. Consumers want that in theory, but much of the time choose lifestyles that favor the opposite. Basically every suburb is the most generic horrible place possible with a tiny amount of commercial activity relegated to a strip mall in a parking lot wasteland filled with the same few shitty restaurants; where culture goes to die.

smcl 3y ago

> Hey we can't pay workers $250/hr without raises prices to above what customers are willing to pay You seem to be suggesting that workers are cartoonishly naive and have ridiculous demands that cannot simply be met. When in reality they usually just want a living wage, a bit more input on shift planning, things like this. People aren't generally stupid, and if they can get it together enough to form a worker-owned co-op they're not likely to immediately run it into the ground doing stupid stuff like giving themselves a 1000% wage increase.

Closi 3y ago
Well they sound like they have picked a higher base wage than average (particularly for servers) and aren’t making a profit. Personally if it’s owner-run I would assume you would be better picking a lower base wage, then sharing profits (with the profits making up that shortfall). That way there is also an incentive to be an owner, and the business is more stable - sounds like if they have picked high wages and low/no profit though they are running it hot and risky from a cash flow perspective. But there aren’t profits for owners to share at the moment - possibly partially because they are overpaying on labour.
- ChoHag 3y ago
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christkv 3y ago

As a parent who is part of running a co op school where only the teachers are paid I can tell you that there is a day to day executive function with delegated powers. The assembly deals with functions similar to a traditional board. That said the two main problems that come up over and over again in our setup are. 1. People don’t understand what being a coop member means legally and financially. They are on the hook for losses for example. 2. It’s hard getting people to volunteer to do needed day to day work. 3. To much drama, every little thing is blown out of proposition and sometime we are forced to use executive privilege to get something done. 4. Coop can distract from delivering the actual services (school).