List of Worker-Owned Tech Cooperatives Worldwide
github.com
github.com
I really like this passage:
> “Consider a law firm. Do the founding partners go out and hire a Lawyer Manager to order them around, and then do they hire a VP of Lawyering to order the manager around? Do they then hire a CEO to rule over everyone and a CFO to handle the finances and a COO to schedule court dates and such? Of course not. There’s no historical precedent for all that fluff. Rather, they handle facets of the business themselves. What they can’t or don’t want to handle, they delegate to subordinates that they hire. The partners don’t specialize in finance, sales, marketing, or operations. That would be silly. But they understand enough about it to act as the boss.”
...and this one:
> “It turns out that treating knowledge work pursuits like manufacturing operations doesn’t work particularly well. But it was the model inherited from the Industrial Revolution, and it’s been hard to shake. The thinking goes like this: if you break a complex operation down to its individual components and then have people specialize in those components, batching the work and letting people get good at tiny slices of it leads to greater efficiency. This works well for stations on an assembly line but not so much for writing software.”
One of the guild-like rules that often exists limitations in the types of organisation types lawyers can form. There are rules against listing law firms and cashing out. Lawyers are required to manage themselves.
This makes little sence - How would the limitation that you are talking about even work?
The person at the top is not required to be a lawyer in the first place. There are plenty of corporate layers that work for public or private shareholder-held companies.
Law firms that take on clients must be lawyer-owned.
"Under Attorney Rule of Professional Conduct 5.4, law firms are barred from offering ownership or other investment/revenue-sharing opportunities to non-lawyers. Some recent developments in several states, however, offer the possibility that these long-standing restrictions could be scaled back, creating potential for dramatic changes in how litigation matters are funded and managed."
https://www.thomsonreuters.com/en-us/posts/legal/practice-in...
Perhaps an interesting extension of the machine shop analogy is that many organizations do not run their own internal machine shop. If they need a part, they find a shop that can make it. Software naturally tends need more ongoing maintenance and attention than machined metal parts, but I think there's an argument to be made that perhaps companies should be less eager to hire software engineers, and more eager to hire an agency.
Moreover, assembly line manufacturing is suited to a very particular scenario that software engineering is almost never in: high volume, high rate production of exactly identical things, which can be broken down into individual components.
Well, I think that's probably overall true of a lot of small businesses of that general type. The odds that I'm going to wake up some morning and decide to open a machine shop, electrical supply store, etc. and just hire people people who know what they're doing (not that I would necessarily know) are probably whole lot less than someone with some savings who has worked in the business their whole life.
It's not just the trades and adjacent though. I worked for a small IT industry analyst firm for a number of years and the founder/CEO had worked for a bigger such firm for a long time. And that's a very common pattern.
OTOH I can't really imagine teams making large projects not specializing. A browser, a AAA game, or an OS for example. Some programmers know GPU techniques. Some know Database stuff. Some know Video compression/decompression. Others know USB driver level details. Others know networking issues. Another few know audio related stuff.
It’s seems fairly similar, though considering few companies operate this way it’s hard to judge if it’s more or less likely to succeed.
Aka go to a big firm and someone is more likely to specialize in exactly the issue you’re having.
For example in the games industry I think there's a quite a few smaller companies in particular that work like this. A lot of people being generalists and taking over business functions and social aspects of the job.
But I think a lot of engineers de facto do work like assembly line workers. Much of software development is not 'knowledge work'. If you're in a company toiling away at some gigantic Java codebase you're not going to have much in common with someone managing a law firm.
Law firms don’t operate like normal companies because the lawyer’s guild in every country I’m aware of has enough power to make comprehensive legal services companies illegal. If you wanted to use a partnership to argue it makes sense for technology companies to be partnerships better to use accounting firms, except they do have all those officers. Even with similar restrictions on non-guild members telling guild members what to do. And every big accounting firm grows and then throws off a professional services firm (Accenture, CapGemini, etc.)
Or look at other industries that used to be dominated by partnerships, like investment banking. As soon as the restrictions making it illegal go away normal corporations took over from partnerships.
Large law firms often/sometimes do have CEOs, COOs, and CFOs. However, often the CEO is one of the partners.
In-house corporate lawyers most certainly have a VP ordering them around.
France (where we are based) is actually a very interesting market for coops. There is a very good legal framework around coops and a growing percentage of them. There's even an investment fund of tech coop as of recently! https://coopventure.fr/
I think coops are a great ownership model for the future and for a more responsible economy. It is too bad that there is still very little support and recognition around it.
- SCOP: adheres to the international definition of coops
- CAE: a coop of freelancers. You are an employee of the structure (with a work contract) but you have to bring in your own revenue to pay your salary. A percentage of your revenue goes towards the coop budget for shared services (accounting, hr, ...) and cash reserve
- SCIC: a multi-party coop. A good use case would be platforms where you could have multiple groups of stakeholders: employees of the platform, users and service providers. (eg. with a Uber like coop: employees, users and drivers could all be separate groups of owners). Each group has a voting percentage. No group can have more than 50% ownership.
I see great potential for the 2 other types of coops that France has in the context of tech. I do not know of any equivalent elsewhere (but would be happy to learn it exists!)
Starting a coop is like starting any other kind of company so same rules apply. (You must be at least 2 people of course!)
And don't law firms treat the average staff lawyer worse than software companies treat the average developer?
Parent is probably talking about "BigLaw" (thousands of lawyers) and boutique law firms (hundred lawyers or less). Most lawyers at the firms are employees (i.e. the associates) and not part-owners (i.e. the partners). They are not co-ops.
Even in a tiny local law firm of 5 partners/owners and no junior associates, they'd still have the staff paralegals and secretaries as non-owner employees so they're not really co-ops either.
You could certainly have a similar model for software co-ops, using contracts for various non-central parts of the work.
Most worker co-ops also include a probationary period for new hires before they become part owners (because to do otherwise would be a bit insane). A really long probationary period with a low chance of conversion starts looking a lot like the lawyer model...
You don't see law firms raising millions to open shop, but it's almost a pre-requisite for serious tech companies. A law firm can be profitable from day one. This difference makes it much harder to use the co-op model for tech companies unless all the workers are independently wealthy and don't need VCs.
That's not really accurate. Larger law firms can have more specialized attorneys; they can offer clients a more comprehensive set of expertise - not only in areas of law, but geographically ('let me call an IP attorney in the Paris office'); they can have larger personal and business networks, which provide access to more resources, more business, enable them to broker more solutions for clients, and which give them more influence.
I find myself on the side of big firms here, but small ones also are more efficient in some ways. My only point is that, for some services, there is an economy of scale.
Why? Are there lessons we need to carry forward when creating new ones?
I'm hoping the trend goes in a different direction for tech companies and they see that there's an alternative - but the fundamentals of co-operatives won't (and shouldn't!) change.
I think you’d have to find examples of companies that only do #1 or only do #2 and look at their outcomes versus companies that do both.
My guess is the root cause of what you’ve observed is the distributed decision making and the attendant latency and diffusion of responsibility it brings.
For example getting funding to turn a business into a coop, let's say it's a one man owned business who is going to retire and has no family, so he offeres to sell it to the employees so they can turn it into a coop. Financially almost no investors would take that bet, the banks wouldn't really give a loan to 10+ people who make salaries, really the main way this could happen is if the owner took a hit and did something like a persona loan and let them pay him back from the profits over the course of 10 years.
I've also heard that there isn't much information on how to start or run one, like looking for books in the library can often fall short or you will only find something outdated. I think the lack of information is part of it as well as it's been so disincentivized for so long that most we can find are either run in a hippie commune style, or created by a small town government to provide services a corporation wouldn't (Best internet I've had was due to them having set up a coop), on top of that I can only think of one college that even teaches coop structure and that's Mondragon in spain[1] but on searching deep enough I also found U of Wisconsin[2] has something too, that's still not a lot.
[1] https://www.mondragon.edu/en/international-mobility/mondrago... [2] https://uwcc.wisc.edu/
Coops sometimes mitigate this disadvantages by networking with each other.
Regulatory capture hurts all new startups and is unlikely to be aimed specifically at coops
Can you provide concrete examples?
Another reason might be that if somebody is a co-owner with many others in an enterprise, he might not feel motivated to work.
In socialist countries the quality of most products and services was poor because no one cared and no one fel obligated to do a good job, since the enterprise was owned by all the people. Instead there were many small thefts from the workplace.
By comparison the decision-making in cooperatives is much better grounded in reality and has fewer disinterested and uninformed participants.
It's one person one vote applied to the corporation. In principle there's no reason why we should demand any less democracy inside corporations than what we demand in societies at large.
It's curious how many of these comments in this post could be reframed to be basically: "democracy can never work" or "democracy is clearly an inferior system to feudalism".
I guess it's all about inertia.
1. https://glineq.blogspot.com/2021/11/socialist-enterprise-pow...
Most skilled people will go were the money is, so coops are usually filled with low to mediocre workers.
"Produktivgenossenschaft als fortschrittsfähige Organisation: Theorie, Fallbeispiele, Handlungshilfen" by Burghard Flieger
I think, it's only available in German. The translated title would be:
"Workers cooperative as organization capable of progress: Theory, case studies, and procedural guidelines"
I think Main reason is that coops so do not fit Well in our profit maximizing Economy. We do produce profits but due to the Nature of our organization there is no incentive for Investors that seek high margins. ( In fact we dont allow external Capital in to remain in Control of our decisions). So linear growth it is.
I think a lot more growth than you Like is Made by exploitation of the workforce. Without doing that you have a Harder time prooving yourself in the Market.
They'd much rather extend loans to traditional businesses with owners who are willing make cutthroat, unpopular decisions and fire employees if it's necessary to defend and preserve their capital.
You can kinda see a hint of this in the spelling of Toronto as Tkaronto. I don't think this benefits the list. It's a kind of meta work, a convenient distraction from doing something of value.
If you're a builder you'll preoccupy yourself with the thing you're building. If you're driving by an ideology, you'll spend most of your time there, and legal frameworks will be of secondary concern, a means to an end.
If you're one person building a thing that one person can build, that might be true.
If you're building a thing that needs or merely benefits from having more people doing the building, you almost certainly need to think about how to structure and coordinate what people do. That's true even if your decision is "no structure and no coordination".
Sometimes, that process will be implicit (and likely a more or less direct reflection of the personality of the initial builder). But for the most, once you start involving other people (or they involve themselves), organizational structure and behavior starts to become a thing you have to start paying attention to. Getting it wrong can destroy whatever you're trying to build.
https://ownershipmatters.net/newsletter-item/tim-huet-arizme...
I believe that the central cause of wealth inequality isn't so much about taxation or regulatory capture etc, as it is about individuals going to great lengths to maintain control of their companies. So someone can be worth a billion dollars with a 51% share but not be able to convert any of those stocks to cash, for fear of losing their power.
That's why they resist even a modest property tax on their stock, while the rest of us must pay property tax on our homes. This is self-evidently unjust and one of the major loopholes which allows the accumulation of extreme wealth while countless millions of people spend the entirety of their lives working to make rent under a negative net worth.
A possible solution to that might be to limit individual ownership to something equitable, say less than 1/3, 1/5 or 1/7 (my preference) of the total.
So a worker-owned cooperative could be thought of as ownership not exceeding 1/N employees.
That would give us a spectrum of possible structures rather than having to choose between the extremes of public and private ownership. Apologies if this concept already exists or is commonplace.
* https://press.princeton.edu/books/hardcover/9780691177502/ra...
I’m not really sure what you’re basing this on? Most of the richest people in the world don’t have controlling ownership of their businesses. Zuckerberg is the most notable exception here, and he took a lot of risks to get there. But companies knocking on trillion dollar valuations that aren’t public and don’t have diluted ownership structures are the exception rather than the rule as far as i can see.
By default 1 share equals one vote. But quite a few jurisdictions allow companies to define a different voting scheme, allowing to f.e. limit a person's votes to at most 20% of the total amount of votes, regardless of their share ownership.
This of course depends on the jurisdictions in question.
https://en.wikipedia.org/wiki/Huawei#Ownership
Edit: Found an ownership and governance explanation website from Huawei:
Who chooses the pre-selected candidates?
It seems that Huawei is a mix between a cooperative and a private company owned by its founder.
[1] https://charlesriverfood.coop
[2] Principle 6: Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional and international structures.
Say somebody comes along and wants to use Oracle suddenly, what sort of measures exist to prevent that from happening, how is arbitration, enforcements and distribution of profit calculated?
The only successful corp i can think that is similar to this is Valve but it isn't quite worker owned, it seems to distribute profits more fairly.
I just have a hardtime believing this could work. Corporations reflect militant hierarchy for a reason because effective decisions often cannot be made through consensus or utilitarian drivers. Corporations thrive when they are lead by profit incentives of executives who are beholden to profit incentives of liquidity/capital lenders.
You simply do not see a "collective" trade publicly.
This is identical to how privately owned companies are often run, especially family owned small businesses, which can be extremely successful.
Profit is at best a proxy for success, it is not a goal in itself.
In the UK for example, we have the John Lewis Partnership (10.5billion GBP revenue), Co-operative group (11billion GBP revenue), and many in the 50+ million revenue bracket like Suma Wholefoods.
We've also had many major public or private corporations rescued from collapse by worker co-operatives that were able to maneuver out of problems that the centralised organisation could not. See for example Meriden and National Express.
Also, many people's financial services are provided by building societies and other co-operatives. Many of the largest banks have been these kinds of organisations at least once. HSBC for example.
That's just in the UK - it would be astonishing if there weren't many more examples disproving your conjecture from every other country.
Actually, I think a co-op is better protected.
A co-op should have founding principles, and acting against them should raise red flags.
For distributing profits, etc, again, standard legal docs. Here in Quebec, there are orgs who can help with that (reseau.coop).
The biggest challenge is growing: I'm in a 5 person co-op. In a previous life, I was in a 25-person collective which became hell to manage, as everyone wanted to be heard, but few wanted the responsibilities.
So in our current co-op, two of us tend to enforce the bottom line, in our respective areas. I mean, legal structure and org structure, while there may be influenced, can be pretty orthogonal.
yeah but you see the problem here? without a central leadership, everybody will have equity and you can't really steer the ship anymore.
I don't know too much about reseau or how it functions but i have a lot of difficulty with say a SaaS being run like a coop. 25 developers divide equally the loot? But there will be disagreements and disproportionate equity right off the bat. How do you remove somebody who plays politics and is able to win consensus but you know its going to impact your business? How do you arbitrate disagreements over distribution or spending of resources or the manner in which they conduct operation?
Who is this "you" in "your business"? The business is as much "theirs" as it is "yours". If they can convince enough people of a course of action, even if somr are not convinced, why do you assume that the course of action will be bad?
The biggest weakness of traditional companies is exactly that a sibgle hair-brained boss can wreak havoc on the whole organization below them. Democracy solves this problem, it is much more resistant to a bad actor than autocracy is.
In top-down there's always the risk of someone coming in and making a long string of bad decisions and essentially wrecking everything by leading everyone on a wild goose chase, while in bottom up the risk is someone obstructing good things happening by either being a drag or exercising whatever veto or FUD power they have (whether designed or organic) to prevent action. This looks less dramatic as it's happening but stagnation is just as powerful a force as havoc in the long run.
There's a really tricky balance to strike somewhere in there.
In some sense, then the two of you may extraordinary - a combination of ethics, IQ and integrity. Your biggest challenge will be handing over the reigns when you are ready to leave (usually only due to bad health or age, it's life long thing). More specifically the task has to begin decades before you leave. If it's not done (often the case) the enterprise's morals rot, even if it continues to be financially successful.
We're not a big SaaS with exponential growth. We're based on Free Software and I often help competing shops because it helps an otherwise dying ecosystem.
I make most of my money off consulting and my co-op pays me well, and I'm generally really happy with work. Good enough for me.
The board is composed of workers, selected by workers on the basis of one person on vote, and we hold General Assemblies for workers to make and vote on proposals.
https://windings.com/about-us/employee-owned/
> In 1998, as part of Ryberg’s retirement strategy, Windings Inc. formed an Employee Stock Ownership Plan (ESOP) for a planned purchase and transition of Company stock to the Windings employees. Ryberg retired in 2006, and by 2008 the company became 100-percent employee-owned.
https://windings.com/about-us/history/
They make "custom electric motors, generators, and related components".
Would they go on the list?
Coops interest me a lot because of the autonomy and I think codified autonomy is critical to longevity of health within an organization.
With that said: if they're so much better than traditional firms, they why haven't they taken over the world? That is, if they were so good, greedy shareholders and investors all over the world would demand that their firms restructure into Cooperatives, and firms that weren't Cooperatives would tend to lose out in the marketplace (being beaten by the more efficient Cooperatives). But we don't see this happening.
This seems like strong evidence to me that they don't offer a superior arrangement (at the firm/system level) for producing goods & services more efficiently.
There is no valuation other than amount of shares x value of share. Voting power is not dependent on share (1 person = 1 vote).
Making an exit is thus not a possibility. Investors have little interest to finance a traditional company that would only yield dividends (if it does, which is not mandatory).
The problem of speed is also often cited: democracy takes more time. While I think that's true, I haven't felt that was a limiting factor. Financing is a much bigger one.
For diversified investors, it's more valuable to have some of your companies return higher gains even if others don't work out. For an employee though, their income is totally concentrated in their one job.
The employees can be rational in not wanting investors, and the investors are rational in not wanting to invest in those firms (at terms the co-op would accept).
The employees work together to find solutions that cut costs. That might involve sacking some people, but it might also involve people volunteering for a temporary pay cut, or renegotiating with a landlord, or a million of other things that reduce expenses.
What never happens, though, is that the CEO "sends people to the chopping block" to protect his own bonus.
I think it's the least bad form of governance for states because it seems to result in atrocities and genocide less regularly, but when it comes to other systems, (such as businesses) centralization and hierarchies are far more efficient and the decision makers are generally much more informed with the relevant data. With democracy, you spread the decision making across a vast number of under-informed people, which seldom results in superior outcomes.
Sure, incentives matter, I agree with you there. But the incentives aren't corrected when you add a democratic vote of all employees to the mix. The incentive alignment stay the exact same, where everyone is trying to save their own skin even at the expense of others or the firm as a whole. The only thing you've changed is reduce the liklihood of a data-driven decision, and increased the cost, complexity, and response time of dealing with dynamic and rapid changes affecting the organization.
See, I would argue the exact opposite. In a feudal hierarchy, the people making the decisions are usually the ones with the least relevant information -- or in the best case, with the most outdated information.
Hierarchies are great at distributing information downward, but not particularly good at aggregating it upward. This is often for power gradient reasons: people enhance the truth to look better when communicating upwards. Even when people communicate honestly, there's a lot of context and nuance that gets lost as a message travels from person to person.
In an actual democracy, you'll generally find that the people with the best view of the information and consequences of the decision (by virtue of being the ones affected by the decision) are the ones to make that decision.
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Edit: I think I see where the misunderstanding comes from! In your typical corporate hierarchy, the people at the bottom usually don't care about understanding the information that is needed to make a decision -- because they won't be asked to have an input on that decision anyway.
In a sense, the corporate hierarchy is a self-fulfulling prophecy. By dumbing down the role of the employees and preventing them from having any real responsibility, the employees turn into mindless ass-covering robots without responsibility, and then the corporate hierarchist uses the argument that "democracy doesn't work because employees are just mindless robots that cannot take responsibility."
My experience is that when you give people authority over their own selves with a "I dare you to be responsible" what happens is that most people, well, are very responsible.
People get together for common causes and sometimes they need to be reminded what that common cause is, but once they have that in mind, they're fairly good at cooperating productively.
Look at democracy in governments. We have a lot of data about that. Giving everyone a vote certainly doesn't drive them to make informed voting decisions. After all, the average American seems to think that the president controls gas prices.
You might think my qualification of "well-run" co-op is a bit of a "no true Scotsman", but the fact is that in all forms of business, there are well run ones and badly run ones. A feudal C-suite does not universally understand things like return on equity – in fact, I suspect, many companies are run feudally with a C-suite that has no idea what they are doing.
Because of autonomy: The only people making a decision should be the ones effected by it.
Anything that's not democracy ultimately rests on threatening people into compliance. Often implicitly ("be a team player and take this third overtime in the month because I'm under pressure from upper management"), sometimes explicitly ("I call the shots on hiring and firing, so you want to stay on good footing with me").
Efficient at what? Dictatorships are efficient at maximizing centralization power (and therefore creating wars), not efficient at making citizens happy.
Private companies are efficient at maximizing profit for the shareholders, not efficient at making employees and customers happy.
> With democracy, you spread the decision making across a vast number of under-informed people, which seldom results in superior outcomes.
Wrong. You are trying to applying direct democracy at specific, technical decisions. This would be like passengers on a flight voting on what flap configuration to use.
But democracy is not the Borg and does not automatic mean "everybody decides everything together". Specific knowledge and division of labor can still exists.
The only difference is in who the owners are. Pretty simple.
Just like any other companies they can be profitable or unprofitable or even go bankrupt and shut down.
If a limited liability company goes bankrupt nobody is going to take your house. That's the whole point.
That means you would lose your invested capital (as it should be), but you are not being hit by 100% of the losses.
For an on-going operating company, 100% of the gains and losses accrue to the owners (employees in the case of a 100% employee-owned entity). That’s working as intended/designed/desired.
Almost never, because the company emits stocks (or hires people) only when profits are growing.
When a company is healthy it is able to pay salaries to employees and profit to owners. When it's bankrupt is paying 0 salaries and 0 dividends.
When it's in trouble, a company will have to choose who to sacrifice: firing employees or cutting dividends. The priority of privately owned companies is to maximize value for the shareholders. They are more important than employees, by design.
In a coop workers and owners are the same people so they are the first priority, that's all.
Statistics show very clearly that coops have a higher survival rate.
> you earning nothing and owing creditors
Once again, no, as an owner of a limited company going bankrupt you don't owe to creditors.
Your claim is easily refuted by pointing out that of all of the largest most profitable companies in the world, none are co-ops. Not a single one.
I did not wrote "most profitable". They are very different concepts.
From an accounting standpoint, GAAP doesn't much care if you're a private company with shareholders or if you're a private company with employee-owners. There are tax nuances and accounting for equity differences, but the books are mostly the same animal.
Right now, however, I would be very wary of starting a company, especially if you're planning on starting a type company that limits your ability to seek investment.