How to Co-Op: Salaries and Reviews | Hacker News Reader

How to Co-Op: Salaries and Reviews

blog.nilenso.com

57 pointssriharis12 comments

The idea of structuring a software-focused company as a co-op is really interesting.

One thing that I wonder about is recruiting. Is it an advantage or disadvantage to be a co-op when it comes to sourcing and hiring people? Do co-ops attract a different segment of the population? Are there people who explicitly don't want to work at a co-op (maybe they suspect smaller future earnings, or maybe they think its too granola and birkenstocks)?

The Co-op Source Foundation (www.coopsource.org, an apex, not-for-profit organization) helps software developers build their own Co-op projects. Feel free to join us in this effort.

There are many advantages of going Co-op. Using the seven principles solves many of the problems found in startups today. Primary among them are maintaining agency in your work product, fairness, transparency, democratic principled workplaces as well as economic longevity/stability.

As for adoption, you can't satisfy everyone all the time and Co-ops aren't a good fit for developers chasing unicorns. But for those interested in long term sustainable development and an alternative to the VC roller coaster, Co-ops rock! You don't need to appeal to every developer on HN, you only need enough to solve your problem.

Also, by adopting the cooperative model you gain support from other cooperatives - see principles #6. https://www.coopsource.org or https://www.ncba.coop

So far at nilenso we've seen it swing both ways but the difference is largely a factor of age. Young(er) people are just not that interested in a co-operative corporate structure. The advantages (and disadvantages) of a co-op are all intellectual to someone graduating from University and the majority of these folks are more focused on their own career and personal finances than their employer's legal entity. I remember when I was 21 -- I didn't care whether I worked for government, a private corporation, a public corporation, or a non-profit. All I cared about was salary and an interesting technology problem to solve.

When it comes to lateral hires, there is more interest from people who have been burned. If someone has suffered from the opaque nature of a large corporation or suffered an opportunity due to an unfair equity structure their eyes light up when they hear about us.

The lack of interest seen in lateral hires comes from a pretty narrow segment: software developers who (in the present economy) want to be entrepreneurs. The "I HATE HIPPIES" attitude generally comes attached to an individual capitalist motivation to be on top. This is our biggest hiring/retention challenge, because these are precisely the people we want on board. We have plenty of entrepreneurial folks in the office but we've also lost some because a co-op will never let a person "be on top".

As for a "segment of the population", I don't think we've felt restricted there (though we of course suffer from our own bias). We've had a surprisingly wide set of demographics for a tiny Bangalore-based consultancy. :)

The huge advantage to hiring in a co-op is agency. The company is inherently democratic and change largely comes from individuals who exact it. There are a number of concrete examples we can give potential hires: moving most of the business to Clojure, running Haskell classes, everyone buying hardware for themselves, speaking at conferences, installing a garden and composter on our rooftop patio... everyone is attracted to a company where they can make the changes they really want to make.

As someone from a group that's underrepresented in tech, a co-op structure would make me hesitant to apply. I would be concerned that as a minority my voice would be lost. At least with a hierarchical structure I sign on knowing who the decision makers are and what their approach is (and thus I can find a place where the decision maker values solid arguments rather than whether the majority agrees).

Most co-ops (including ours) are run by a representative democracy. The difference between a co-op's hierarchy and that of a privately-owned corporation is that the co-op gives you transparency into the decision-making process.

I've never felt I've known whether the decision makers at my previous employers valued solid/logical argument... because I've never been party to the top level decision-making process unless I was a part of it.

Having worked at a well known UK worker coop they do tend to attract those who might be broadly considered progressive.

European coops tend to be more left-wing and the USA coops don't have a political slant in the same way.

The main problem for worker coops is access to capital.

I would turn that statement around, the biggest advantage of coops is that they do not fall into the debt trap. When you borrow money from VCs they own you. Keeping them happy becomes job #1 and your customers job #2.

The day your funding comes through starts a clock that defines your runway. Most startups are too early into a market and run out of money/time before the market develops/matures. Co-ops are one of the most stable forms of enterprise and money earned stays within the ecosystem rather than being funneled off to disinterested investors.

Co-ops adhere to democratic principles so, yes, in the context of most corporations (totalitarian/dictatorships) that notion might seem quite radical. I would argue that the old forms of work and the corporate form we know today is due for some refactoring. Co-ops are a uniquely positioned alternative. See also: "The Second Curve" by Charles Handy.

> I would argue that the old forms of work and the corporate form we know today is due for some refactoring.

I completely agree.

It does seem that startups sometimes go out and raise money simply because it's the expected thing to do. And with the cost of getting a product to market and a business off the ground so incredibly low these days there is much less of inevitable need for VC than there was, say, in the 90s.

That said, raising capital can be incredibly useful for a company. It can fund initiatives that otherwise simply wouldn't be possible with cash on hand. And traditional lenders might be hesitant to give loans to a very young organization with few assets.

I would imagine there are various creative ways to handle this A co-op could always sell shares to an investor if they decided to not be 100% worker-owned. And a co-op could always decide to seek a traditional exit event at some point if they wanted to (there are plenty of publicly traded coops). Or you could structure some kind of joint venture. I imagine though that the biggest problem would be that most investors wouldn't want to take on the added risk of dealing with an unusual corporate structure if they didn't have to.

The [ dictatorship => democracy ] imagery is helpful and was part of how we envisioned nilenso as it formed. On a long enough timescale, it also seems to make sense since those forms of governance have worked well for, well, governments -- why not businesses?

I have a read a lot of legal paperwork around co-operative corporate structures available in Canada (where I'm from) which permit external investment or distribution of shares in a variety of configurations. However, I'm not familiar with a single co-operative that actually operates this way.

Having additional motivation for avoiding VC has been helpful at nilenso because it often feels like the streets might as well be lined with suits trying to throw money at us. We have considered taking VC funding if necessary, but probably only the expansion of a business which isn't purely software: hardware, logistics, manufacturing and distribution of physical assets... we've repeatedly acknowledged that doing any of these might require more capital than we can commit by bootstrapping.

Some coops have experimented with this but kept 51% to remain a coop but it didn't work out for poptel.

http://www.andrewbibby.com/socialenterprise/poptel.html

I have worked with a large number of Nilenso co-opers doing Clojure. We've pair programmed for postgres benchmarks, editing a large (and complicated) A/B testing codebase, and one even ramped me up at that job.

I've found them to be extremely good to work with.

Re: compensation, transparency is critical. One approach that might work well for Co-op based startups is the "dynamic equity split" as outlined by Mike Moyer in his book "Slicing Pie" - see also: http://www.slicingpie.com

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