Comment by satvikpendem | Hacker News Reader

Comment by satvikpendem | Hacker News Reader

I posted this on another comment, but it might be relevant here as well. Basically, make a better product than Amazon in order to win, people don't usually care about the organizational structure of the company.

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I am reminded of OpenHunt, an open source version of Product Hunt that was made. The only value proposition was that it was open source, but it shut down precisely because users didn't care about that, they cared whether it had enough cool products (as a consumer) and enough traffic (as a submitter).

Here's one post-mortem: https://news.ycombinator.com/item?id=10940729

> OpenHunt tried solving a problem for the content makers without providing any additional benefit to the content consumers.

> It's a nice, heart-warming mission. But in the end of the day, content is king, that's what consumers want.

> There have been many examples of people rallying around a "free and open" version of a service. They fail to realize that the end consumer barely cares. Look at voat (Reddit), app.net (Twitter), Diaspora (Facebook), even ycreject.com (Y Combinator) tried to be a thing for a while.

> If someone is able to make it "free and open" while also making it a better experience than the alternative, then it'll be a big success. But so far everyone gets that wrong.

Thank you for the feedback! I agree and also humbly disagree. Let me please explain.

So the product and service is #1. We have various ideas how to execute this. This doesn't mean we believe we can "beat" Amazon. That isn't our goal at all, nor does it need to be. Our goal is to make it easy and convenient for the average American to shop sustainable friendly products.

That said, because it's worker owned co-op vs an investor owned business there is potential to actually build "a customer centric company" ;) This is bc unlike Amazon we aren't under same economic pressures as a typical VC or investor owned company.

Plus, there is growing concern around income inequality, job security and general democracy both in the work place and in society. Consumers are looking for alternatives. By building this as a worker owned co-op we address all these things and more.

Yes "content" or product/service is king, but by building it as a worker owned co-op we may actually have a market advantage that consumers will be able to see.

>... unlike Amazon we aren't under same economic pressures as a typical VC or investor owned company.

I think it's a high bar to say that (a) the economic pressures faced by a typical VC backed company are the same as those faced by a typical investor owned company, and (b) that Amazon faces the same pressures as a typical investor backed company. Public company investors don't usually expect the kind of meteoric growth that VC's do, and Amazon has a long history of reinvesting in itself to the detriment of their profitability. Not the playbook associated with stereotypical public company economic pressures.

>That said, because it's worker owned co-op vs an investor owned business there is potential to actually build "a customer centric company" ;) This is bc unlike Amazon we aren't under same economic pressures as a typical VC or investor owned company.

You're right. Your proposed worker-owned co-op still has economic pressure; it's just a different type of pressure: It is financially constrained by workers' savings to contribute capital.

I made a previous comment about this: https://news.ycombinator.com/item?id=11166080

But that limitation is ok if everyone involved understands how it puts a different financial risk on creating a viable business.

So potential worker/members would need to know what a realistic capital contribution would be. $5000? $10000? And probably some "sweat equity" too. E.g. a programmer that could earn $200k salary from a business maybe needs to work for free to help build the co-cop from nothing.

Therefore, a scenario is the programmers paying $5k into the business and with $0 income for several months to code the website, etc. That would be economic pressure for many people.

Am I way off? What are your ideas to present a palatable (while also realistic) financial scenario to attract co-op members?

Your right about capital being an issue but worker coop members don't work for free, or at least when I worked for Poptel I did not..

You can raise capital via other means and even take investment just have to stay below 50% +1

Not all worker coops have an ante like Mondragon does

It’s hard to argue with your market.

If you look at any value-centered or “conscious” business that is successful (there are many, I used to run a blog on conscious business), they are successful because they offer a competitive product or service (e.g. Method home products, which filled a gap in design centric, non-toxic cleaning products, then landed distribution through Target). The values and org structure exist to support the founders’ or owners’ vision and its operations, but it never creates competitive advantage.

I think there are enough people who care about the organizational structure of the company to make it profitable. My whole family, for example, refuses to shop at Walmart because of their advertising practices and the way they treat workers[0]. The products are the same as at other stores and usually less expensive, yet they will not shop at Walmart.

For this co-op to be successful, it doesn't matter what most people think, just what enough people think.

[0]: We had a family member who worked at Walmart who told us about this.

Totally agree and that's partly why we are building it this way.

Agreed, but I'd clarify that being open (source, or with little vendor lock-in effects) can certainly make a product better in the eyes for certain market segments. Building a AWS without vendor lock-in sounds like a interesting proposition

Yep it definitely can be, but this just proves the point: not having vendor lock-in is a more useful feature and solves a pain point for people. Imagine if AWS allowed free exfiltration of data and resources (ie eliminated their vendor lock-in), now most people would continue to use AWS.

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