Is shareholder model the root problem? Are platform cooperatives one of the key solutions?

business-model

#1

I’ve followed what The Humane Tech has been doing for some time, and it seems to me that lot of the problems come down to the shareholder model. Few quotes from @tristanh that seem to make this case:

"Their (tech companies with business models based on advertising) stock price is too hinged on a certain amount of usage. How do we decouple the link between the stock price and how much attention is extracted? This is the thing that I’m actually most alarmed about in the current system. "
How technology is designed to bring out the worst in us

“Supercomputers play chess against your mind to extract the attention out of you. The stock price has to keep going up, so they point it at your kid and start extracting the attention out of them. You don’t want an extraction-based economy powered by AI, playing chess against people’s minds. We cannot win in that world.”
Former Google Design Ethicist: Relying on Big Tech in Schools Is a ‘Race to the Bottom’

It seems to me that the core of the problem is a conflict of interest between the owners and the users of the platforms. For example, it might be in the interest of the users of Facebook to make the platform more suitable for organizing sport events. However, if this will lead into people spending more time exercising instead of using Facebook, it’s not in the interest of the owners.

I think the solution to this conflict of interest between users and owners is to make users into owners of the platform. Cooperatives are businesses owned by the customers or the workers, with each member owning one share. They already exist around the world, with over 1 billion members. They are highly successful: for example, cooperative banks (such as credit unions in the US) and worker-owned cooperatives were less likely to go bust during the financial crisis than otherwise comparable companies.

There is a movement called platform cooperativism that I’m deeply involved (I started the Wikipedia article about it :slight_smile: and am currently working for one) that seeks to create user owned online platforms. While not a cooperative, the largely user-governed Wikimedia is an example of a massive online platform that is not shareholder owned. It has also not engaged in the unethical practices that we Humane Tech folks are so concerned about.

There are two problems that platform cooperatives face:

  1. It’s difficult for small cooperatives to operate on a loss while developing and spreading innovations. Facebook made losses up until 2012. It could do this by covering the losses with venture capital investment. It’s harder for a user-owned cooperative to do the same: because everyone owns one share in a cooperative, equity investment to cover the losses is trickier.

  2. One-member-one-share principle can also make founders who put a lot of initial effort into the company reluctant on adopting the cooperative model, as it makes giving sweat-equity more tricky.

I do not wish to make this post seem like promotion of my own projects, so I’m not gonna mention by name the two platform cooperatives I’m involved in, but I will give few concrete examples of how they differ in practice.

  • I’m working for a cooperative that is about to launch an app that will allow anyone to invest in cooperatives around the world. It fixes the two problems mentioned above by enabling cooperatives to issue investor and founder shares. These two type of shares give a dividend of the profits, but no voting rights. The members have full and democratic ownership, but they can accept investment from anyone across the world and reward the founders. Our goal is to offer start-ups an alternative to venture capital, and enable democratic user-ownership of online platforms.

  • I’m involved in an online discussion and link-sharing platform cooperative that allows users to become a member-owners, with every owner (including us founders) owning one share. Users democratically propose and approve new features. The platform only advertises other coops that seek investment in the coop mentioned above. There is no targeted advertisement. Instead, users will vote each week what coop they find, and the coop receives exposure according to how many votes it receives from the users.


#2

Great post, @LeoSammallahti! I am a believer in (platform) cooperatives myself. Nice Wikipedia article too.

First, I believe that when talking about root causes, and you go to the actual root of the problems, you end up evaluating the economic systems themselves (modern capitalism, if you will) with their concepts of endless growth and outcompeting your rivals. The focus on shareholders is only a symptom of that.

People often think in extremes of capitalism or socialism, but there are many other economic ideological models that exist and either haven’t been tried, or tried at small scales unbeknownst to most people. Coincidentally yesterday I bumped into Distributism (in the Hacker News discussion 'Capitalism and inequality) which seems very much aligned with the idea of having cooperative organizations.

A cooperative is very interesting, especially if if is funded differently, like by avoiding venture capital. There is a trend to do that. It was discussed on Hacker News of the NYT article Startups are turning away from Venture Capital.

Related to that is the growing realization that striving for Disruption - which is the norm in VC-funded startups - is actually a bad thing, unwanted. There are alternatives that are much more sustainable, like instead of becoming a disruptive Unicorn, become a Zebra (mentioned by @andrewmurraydunn here). Zebra’s have a different mode of operating:


(source: zebrasunite.com)

See also: An epic Twitter thread on venture capital, startups, and zebras (click the date link to read the Twitter thread)


#3

Thank you @LeoSammallahti this is a wonderful idea and I’m glad there are other people here with a business sense that goes along with ethical and cooperative goals.

I think the cooperative, the open-source model and the nonprofit are all excellent models. Perhaps cooperatives have the power to replace the current crop of tech giants. I think that is what we are really after, creating replacements for the current tech companies that will have exponential growth.

I think we should also be targeting the most major areas in tech such as operating system, hardware, major critical software, search engines and social network / communication – all 100% open source, non-logging, non-tracking/history, private and secure. The other smaller pieces are really not that important in my opinion compared to these big chunks.

As a follow-up to upon the post by @aschrijver comparing unicorns to zebras, I think we need more of the characteristics of unicorns than zebras for this to succeed. Being a zebra company owner myself, I can tell you that in my opinion zebras are almost always small loser companies at least relative to the giants.

What I propose instead is something like a for-profit enterprise with guiding principles. Given that the for-profit enterprise would be ethical, its profits would be much smaller than unethical tech giants, say 1/10 the potential size. However given the benefits of being ethical, and also not having to spend resources to hook people, track people, market to people, I think this kind of company could actually take away market share from the tech giants.

How? Many people would choose the ethical alternative, especially the critical early adopter techie types. For example, if the company developed an operating system (private, open, non-tracking) with a very different philosophy than the current OSs, I think they could easily get 10% of the worldwide smartphone market within the first 2 years and then experience growth until the majority of users in the world switch to the new open-source and ethical OS. How is this possible? Users will be dying to switch away from the non-ethical tracking insecure systems once they have an alternative.

A question remains of funding. There is no question that such propositions would be massively profitable. However the question is how to make sure that such companies will continue to stick to very strict ethical principles which will probably limit their profits to 10% of what they would have otherwise. What’s to prevent these kinds of ethical companies from getting big, and then once they become monopolies start to extract attention and larger unethical profits? I’m sure there is a solution, but please let me know if you have any ideas. Thanks.


#4

Two examples creating ethical Mobile OS alternatives I often mention:

Purism

Purism is an example of a for-profit company that is designing a smartphone from the ground up - hardware and driver software, firmware - to run an open OS (any Linux flavour). Their focus is security and privacy and their shareholders are their customers. From Our Story:

Purism is invested in creating an ethical computing environment, with quality services and products that people will find convenient to use and beautiful to look upon. An environment you can reliably trust.

As a social purpose company, we can prioritize our principles over profit. Our mission to provide freedom, privacy, and security will always come first above all else. You see, you are our primary shareholder.

There is more information in Why Purism?. From their FAQ: Purism is for-profit, but as a Social Purpose Corporation.

e.foundation

/e/ is a non-profit, open-source project creating an ethical, privacy-first alternative for Google’s Android. They are non-profit, but can nonetheless find enough funding to develop their software with sufficient speed.

There is a lot of interest in this OS (also because of good marketing, keeping the community involved during development). So, this is not the for-profit company you envision, but can still get a lot of uptake if they make the install process really easy. But …

This is not my experience. I think we should be wary of confirmation bias here. We are in circles here, where people care about privacy and are willing to act. Our filter bubbles are tuned to it. In tech world people are much more aware of what is at stake. And even here people keep using the tech giant’s products and services (see also Aral Balkan’s article in I was wrong about Google and Facebook: There is nothing wrong with them).

Indienet

Aral Balkan, btw, is the author of the Ethical Design Manifesto and behind the Indienet initiative (Indie stands for independent, and independent alternatives in the tech world). You could view Indienet as a movement that lays the groundwork for ethical businesses to operate on.

Whenever possible we use and develop decentralised, federated, interoperable initiatives to encourage individual sovereignty and a healthy commons.

The ideas that Aral and like-minded developers and entrepreneurs are promoting are becoming quite popular in certain circles (e.g. with FLOSS developers and on The Fediverse). But this can easily slip your attention if you are in the ‘common tech world’. Aral is very principled on the ethical aspects and rejects using unethical technologies and the practices of surveillance capitalism.

I do not think that Zebra businesses are necessarily ‘loser companies’. Of course, they are tiny Davids agains Big Tech Goliaths. But their objectives are to be sustainable, i.e. make enough revenue to pay decent worker’s salaries and invest in development in ways that remain viable in the long run.

However, a Zebra on its own - when competing directly with a tech giant - is hugely disadvantaged (I will post about MeWe later, which may be in this position). Our current tech giants are effectively dominating oligopolies and they are retaining much of their market share by vendor lock-in (walled gardens) and network effects (leading to FOMO). They are cutting costs and maximizing profits, throwing ethics in the bin.

Where Zebra’s can compete is on true quality of service, intrinsic quality where the customers are the actual users: Us!

By focusing on quality and actual benefit of features as USP’s there is no need to draw up walled gardens, and instead do the opposite to gain yet another important unique selling point: Striving for Openness! I think here lies the key to competing with Big Tech. By being open and transparent, ethical, you gain trust with consumers, and by having open API’s and data format, based on open standards, you have created the preconditions to cooperate in ways that transcend your own business (or platform cooperative). You can find strength in numbers, where each business is not huge, but excels in a certain niche and connects to other businesses that excel in other niches.

The Fediverse

A good example of the opportunities that come from working in the open, is the Fediverse. It is called like this, because it is decentralized, consisting of federated servers that interconnect to form a greater whole. One of the dominating standards on which the Fediverse is based, is W3C ActivityPub for defining social networks. But there are other successful standards in this realm (not only federated, but also peer-to-peer with no 3rd-party server dependence).

Currently all projects and businesses on the fediverse are converging towards each other, making the network stronger. And there are hundreds of projects in the works that interconnect with it. Most well-known is Mastodon (Twitter alternative), but providing similar service is e.g. Pleroma. There is PeerTube (YouTube alternative) and PixelFed (Instagram alternative). See also watchlist for activitypub apps.

We used to have good standards bodies like W3C and OASIS and others, but these have been diminished in importance by the brunt force of the tech giants (like Google) pushing their own de-facto standards and then monopolizing them.

The evolution of the Fediverse and its standards, are much more organical (and hence messy), but they are people-driven not enterprise-driven, and gaining strength.

This will always continue to be a challenge, of course, when big $$$ lures. But setting the right preconditions will certainly help keep a business on track. Operating on principles of:

  • Alternative (non-VC) funding models
  • Transparency & Openness
  • Immersed with proper Ethics
  • Strength in cooperation, people-driven, people-focused, cooperatives (people-controlled)

With these principles firmly in place we don’t need to have ‘enterprises’ to compete with the giants.


#5

@aschrijver thank you so much for the detailed answer!

Viable indeed but not gaining a large popularity, as all the examples you’ve provided show.

That’s why I suggested an ethically-controlled shareholder company. With funding and slick marketing, slick user experience to fully match the likes of Apple, would a company that has some kind of ethical people in control (perhaps a board of directors, a founder or founders) be able to win over huge user popularity to take on the tech giants of today?

I think that not for profits, government projects, volunteer projects, cooperatives have a long successful history and we should use them more and more as the primary solution. However as we know these things also have a history of usually losing to the big corporations. One reason is lack of money motivation, which many would say is a good thing, but ask yourself if 99.9% of the world population would go to work if they didn’t get paid? The same should be true of companies, they should be paid, and the investors should get a multiple of what they invested back from the company as fair compensation for the huge risk they take of the company probably failing, if the company is doing ethical things. Managers and employees all deserve to be paid, and to have good hours and working conditions.

However ethical shareholder companies would be not be a democracy, the would not be cooperatives though every employee would get company performance bonuses, not just managers. The fact that companies put control in a few people turns many people off. Not fair they say, all should be the same and have the same power. But you know organisations must have leaders! And most people would rather follow then to make decisions.

Ethical shareholder companies might be necessary to make an environment where cooperatives and federated services can succeed. For example the rules are currently set by Google, Facebook and Apple, who make the operating systems, control the internet, have monopolies and lock-in and do other bad things. To take on these giants and take them down where it matters: operating systems and search I would think we need huge funding and ethical shareholder companies, because we need many managers and workers making good money, we need slick marketing, and slick products and services or else this is doomed to fail and fail hard.

So is an ethical funded company possible? Absolutely! There is a new movement called B Corporations started in the US which has spread globally, as well as Benefit Corporation status in many US states. In some countries there are clauses that can be added to a company’s charter to force it to consider ethical concerns as well as making a profit. These B Corporations must work for a social purpose over profit, and also consider the environment, the well-being of their employees, helping their customers instead of taking advantage of them, and so on. For me this is the best solution because it allows funding and market differentiation by being truly ethical, and not some fake ethical “greenwashing” or “don’t do evil” misdirection scams now used by for-profit C corporations in tech. The purpose isn’t to make the founders rich, it’s to get money to pay managers, employees and other expenses, and to compensate the risk-taking investors fairly for their ethical decision to invest.


So Purism is a for-profit ethical purpose corporation. They have given themselves ethical rules they must follow. However maybe those fixed rules will end up being too restrictive or not restrictive enough, because it’s impossible to know all the various future situations the company might face. So instead of ethical fixed rules, I am proposing to have very ethical founders or a board of directors control the company fully instead of the shareholders, and them moulding the ethical shareholder corporation towards do-good ethical goals.


Regarding a humane device / operating system there are many ways to go about this. Purism seems focussed on completely secure computing, not user friendly and at a high price. e.foundation seems like they’re making the building blocks of an open OS, not the final useable OS to be used by the typical end user. @aschrijver you’re right that these kinds of OS will not become popular.

It would require a different vision of the future. The operating systems in development which you mentioned seem like cleaned up versions of the old Apple / Android vision. I’ve always said Apple’s smartphones (and Android clones) were a big step backwards for computing and freedom. What I would propose is a radically different way of thinking about privacy, almost no notifications allowed, apps all very restricted (this would be a very closed and controlled world, not the free-for all we have now in the software community)… only open source apps, no ads or trackers allowed in apps, ad and tracking blockers in the browser, and many other restrictions. Apps would be federated, cooperatives, open-source, funded by the freemium model, opening the door to a new ethical world.

I think we could get 10 percent of the OS market and grow from there. It would take a beautiful easy-to-use and understand OS (not like Android which is a nightmare) and and marketing to educate users how bad Apple and Android devices really are.


#6

I thought about similar idea about 4-5 years ago. But for that time the idea was too revolutionary and anti capitalist and I could not find the right people from Wall Street. I have long been outraged by the idea Why Facebook is worth so much money. After all, this company essentially does not produce anything. It simply provides a place for communication and data storage. Аll company capital is users, It is they who produce the content and they also consume it. a fair question arises why User earns little on this and why they don’t take part in company management. After all, the uniqueness of Facebook is concluded only in the fact that they were among the first and became the biggest, like bitcoin. So I thought to create not a capitalist Facebook, but a Socialist-capitalist Facebook.

Where each new user automatically receives shares of the company upon registration. For this, most likely we would have to say goodbye to anonymity, but everything and so goes to the fact that we say goodbye soon to anonymity.

Anonymous Internet is uncontrolled Internet. And what the uncontrolled Internet leads to, we could already be convinced. So the idea was to create a virtual state, where all users would be the owners of the company and where once in 4 years elections were held among all users to all major positions in the company including its head. It would also be beneficial for advertisers as they would finally get access to “real” users.

The main question rested on the initial capital, the idea was simple to draw short sellers from wall street. They would have invested initial capital, launched the site. Then it would be necessary to create the big hype in the news that it is not difficult to do.

And they would earn and recapture their investments, when Facebook shares would go down because of the loss of the users. And for many people, this would be a great incentive to move to a new company where they immediately received shares and future income (though small ) and would also have an impact on the company’s policy and a chance to be elected to its leadership. And Facebook shares would go down becouse of this and Short sellers would earn on it. and then from a position of strength it was possible to look for other sources of financing until the company went into profit.

There were also ideas how to make a good social ladder out of the company. Where people with different professions with different abilities could succeed and move up the social ladder, essentially create a virtual state.


#7

It does produce something. But the users are just not the customers. It harvests user engagement and attention (user’s time online) and sells that as their product to their customers: advertisers and marketeers.

A platform cooperative could have a better business model in that regard. But being a cooperative like that in no way guarantees that, it only makes it more likely. A cooperative could just as well be involved in surveillance capitalism worst-practices and throw ethics in the wind. But being a cooperative this decision making falls to each and every employee, so there likely is more resistance and ultimately (hopefully) balance in their policy making process.

A socialist-capitalist Facebook is, I think, very similar to a for-profit platform cooperative. Your idea of a virtual state is a nice one. I think there are other initiatives like that to be found. I would not go with 4 year termed elections, though. That is way too restrictive, and you throw a big USP of cooperative models in the bin. There is good reading of alternative, dynamic models of democracy that can be applied. They are not anarchy (uncontrolled) at all. Regarding position-taking in the organization, I think that should go organically and more dynamic too.

We are defining such a model for our own community, where you can take any role if you are actively involved, persevere and other members agree with that (implicitly or by a vote). Dedication leads to well-earned authority and people agreeing you deserve a particular role.


#8

I found an interesting disccusion on Mastodon about Platform Cooperatives. On Mastodon a heated discussion is waging on how ethical and principled one should be. The trigger of all of this is Aral Balkan and his frustration that people working to improve technology keep on being sponsered by Big Tech and using the tools of these surveillance capitalists (see: I was wrong about Google and Facebook: There is nothing wrong with them).

On Mastodon he just posted:

Google/Facebook are to the health of our human rights and democracy what Philip Morris is to the health of our bodies and what Exxon Mobil is to the health of our habitat.

If you’re a doctor, you do not get sponsored by Big Tobacco. If you’re an environmentalist, you do not get sponsored by Exxon Mobil. If you’re a privacy advocate, a human rights activist, or a democrat, you do not get sponsored by Google, Facebook, or any other surveillance capitalist.

It’s that simple.

And it came to platform cooperatives: the platform cooperativism consortium (PCC) at the new school, receives $1,000,000 google.org grant with the by-line Google.org Foundation Grant Will Support the Development of Cooperatives in the Digital Economy”. To which Aral responded (and he is right):

Well that’s a million reasons to love surveillance capitalism right there :slight_smile:

OTOH, as far as I know, the platform cooperative movement has never taken a stand against surveillance capitalism. So it is what it is. Afaics there’s nothing in being a platform cooperative that stipulates you must have an ethical business model or bars you from being a surveillance capitalist. It’s just a flatter structure for sharing profit.

So summarizing and refering to the topic title: Something more is needed to ensure that Platform Cooperatives are the key solution, but the business model can be of help in getting closer to HT goals.


Some of the interesting resources that came with the article:

Platform Cooperativism (platform.coop)

The Platform Cooperativism Consortium

Platform Co-Op Development Kit


#9

While I don’t like Google, the Platform Cooperative Developmetn Kit focuses on building open-source tools for worker cooperatives. As far as I know, they are not tools that are based on surveillance capitalism.

Think there is a bit of circular logic in criticizing Google for giving a grant to platform cooperatives. The logic is somewhat the following:

  • Google is bad
  • If Google supports something good, it means that good thing is bad

That’s a rather black-white way of seeing the world. I am very critical of Google and other tech giants, but not everything they do is evil. They support Wikipedia too, which is perhaps the greatest example of a website that combines popularity with lack of extractive and intrusive surveillance capitalism.

Mondragon is the world’s largest worker cooperative. It was started under the Francoist Spain, with the support of the fascist government. It doesn’t make it in any way fascist in my opinion. Similarly, not everything Google supports makes the those things part of surveillance capitalism.

I am happy to accept that I’m wrong here if someone can point out to me how the Platform Cooperative Development Kit contributes to surveillance capitalism. I am being sincere here, I haven’t looked into “technical details” of the Platform Cooperative Development Kit, but so far it seems like a brilliant project.


#10

Yes, that is why the discussion about it is so heated, actually. Aral Balkan has some reasons to be angry. Talking about Ethical Design at open conferences and foundation-organized events he was repeatedly asked to please not criticise Google and other big tech sponsors in any way. There is definitely whitewashing tactics going on, and when you received large sums of money it is very easy to be compromised. And that just happens too. Aral is drawing the line very, very sharply in that regard, I agree.
The discussions are very interesting to follow.

But what I am saying wrt Platform Cooperatives basically that it does not say anything about being good or bad, being involved in Surveillance Capitalism or not. The 2 things stand apart, and your venture and the tools you use might be entirely ‘clean’ and ethical. Or they may be compromised.


#11

I appreciate Aral and think he is a brilliant fellow who is more often right than wrong. I totally accept the risk of being compromised, and do not dispute the possibility that this might have already happened.

What I would however wish is that when such accusations are made, there would be some examples of such compromising happening. Currently the Platform Cooperative Development Kit is building open source platforms to organize female workers in the informal sector in India, sanitation workers in South America, social workers in the US and refugee women in Germany to worker owned cooperatives. It makes me feel bit uncomfortable to oppose these projects on the basis that they receive funding from Google. Rather perhaps criticism should be directed to the global cooperative movement for not pursuing such projects before Google.

I find myself in a weird position of defending Google funding and criticizing international cooperative movement :smiley:. Believe me, this is not representative of my general take on things!

I agree with what you are saying. Perhaps we could put it this way: it’s possible for shareholder companies to do good things and cooperatives to do bad things to their users. But it’s easier for user owned cooperatives and harder for shareholder companies to do good things for their users.


#12

Sorry Leo, but you’re making a stawman argument here. Those of us on the critical side of worker co-op supporters taking money to help co-ops from companies like Google (and Citibank and others) is not that “everything Google does is bad” by definition. The issue is what strings Google attached to that money and why, when I’ve asked the principles directly, I’ve gotten no answer about that. The real problem I have is that there has been inadequate transparency regarding what exactly the deal with Google is. We’re already struggling to break free from Google’s ubiquity, so why are we now creating a situation where new Platform Co-ops are going to be part of the Google ecosystem by default. (Maybe that’s not the case, but with the lack of transparency, it’s hard not to assume the worst.)

Another question is who makes the decision to apply for the money in the first place and who makes the decisions about how to spend it. Often times we’ve seen academics and non-profit people who are not themselves cooperators (i.e. they make their money from university or non-profit salaries, not from being a member of a worker co-op) get grants to “support co-ops,” which money ends up funding more and bigger salaries for non-cooperators, but not much of anything for those of us in the trenches. Whether what they do actually benefits any actual co-op or cooperator seems to be a matter of luck. Sometimes that grant money leads to projects that are actually beneficial to us cooperators, but just as often we see nothing but reports and infographics that don’t actually do much to help (especially for the amount of money the non-profit got to produce them). Without maximum transparency and leadership from actual worker-owners, the outcomes we’ve gotten and will continue to get will only be helpful by chance.

Like I said on Mastodon, the fact that Micky and some other actual cooperators are on the team soothes my fears somewhat, but there have been other orgs (the Democracy Collaborative, for instance) that had good people on the founding board but went down a very non-cooperative route once the big money started flowing.

And I’ve got examples galore of people who don’t know the first thing about cooperation, but who are good at talking, getting grants for co-op projects that fizzle and flop. This isn’t just about Google, it’s about grant money in the movement generally. And, for the record, I’ve been on the side of receiving the grant money too, so I have got to see things from both sides, at least a bit. The criticism doesn’t come from hatred of Google so much as from a fear that our grassroots movement will be taken over by the non-profit industrial complex.


#13

you live in democracy and democracy is the power of the majority.
Therefore, if you want to change the world or the Internet, you need to either enlist the support of the majority or lead large corporations.

People are mostly passive. If you for example take statistics on Facebook or YouTube.
30-40 percent can put a Like or Dislike And only 10 percent can write some comment.
This means that most just want to see photos of some celebrities or their friends and loved ones and communicate with them.
so even now, despite the negative press in recent years, Facebook has shown record revenue. and this means that most people will not switch to a new platform. Since all these friends and celebrities are not there. This is the biggest plus of Facebook.
all your talk about morality and the fact that this is Open Source, they will not lead to anything, most people will remain on Facebook. So if you want to drag those people(majority)to another platform, you need to offer something more than morality and Open Source.


#14

I think it’s a fair portrayal of Arals argument that if anyone receives money from Google, they cannot say they support human rights or democracy. Yet I wouldn’t dismiss a brilliant project like Wikimedia simply because they have received support from Google.

I might be repeating myself but I want to point out that:

  • I don’t think the concerns are unreasonable
  • I don’t dispute the possibility that unethical compromising has happened

Since you have asked questions without getting answers to them, that is very concerning and I wasn’t aware of that. It’s the sort of criticism I was calling for. What were these questions specifically?

Can’t comment from experience about the problems of non-cooperativist people getting money for largely useless projects that don’t really advance coops, but have no reason to doubt that it’s a real problem.

I understand where Aral is coming for, and largely agree with the principle of “follow the money”. He also understands these things much better than I do.

@geo

Largely agree that being more ethical alone won’t be appealing enough, and the network effect is a huge obstacle with no easy or simple answers to overcome.

However, shareholder companies have a narrow and short-term goal of maximizing quarterly returns. Here’s three points on where coops could find a competitive advantage:

  • User-owned platform cooperative could potentially be in a better position to develop features that users would find beneficial, as they could take user benefit, not profit maximizing as their goal.
  • Allowing user participation in the decision making could potentially also lead the platform into being more innovative if it would allow to harness their collective intelligence.
  • User-ownership could potentially also lead to users getting compensation for the value they create, instead of being sold as products.

#15

Nice post, @LeoSammallahti.

I would like to follow up on this and to the point that @geo is making…

Platform cooperatives represent a different business model, and sure Geo - if the objective of the co-op business is to defeat Facebook or at least become just as large - outcompeting FB and turn the network effects to your own favor is about the hardest tasks you can set yourself to.

But this is not just what platform cooperatives are for. It is an universal model and can be applied at any scale and in any market segment. Why should you strive to be that big, or earn that much money? Because that is how success is defined? Happiness? The good life?

A small platform cooperative that can earn a decent living for its partners/employees and is viable and healthy in a small market niche is just as worthwhile an objective to pursue. And if you can earn a decent living by going this route, it is naturally an attractive option, and more and more will follow this path. Take trends like decentralization and ‘cross-coop cooperation’ into account and - in due term - this movement can become competitive with big tech single players.

Maybe Google - by sponsoring this movement - is recognizing that fact and wants to ensure it takes a stake in it, if the trend takes hold more broadly.


#16

I think being big isn’t enough, ethical tech must be HUGE. Also free or underpaid labor is not a good answer.

Users deserve humane tech as the primary choice, that means being as popular as the tech giants. Firefox has done it. Or being more popular than the tech giants, Wikipedia has done it. It is possible!

But humane tech needs to grow to the bigger areas of tech. It can dominate, open source, collaboratives, social projects will be better than the current big tech horror story. How? Because great humane tech with a new vision can easily defeat the horror. Which would you choose, if both were on the same level, the humane or the horror?

Humane Tech vs Horror Tech

Humane tech will win 100 percent if the time. Businesses and consumers will choose humane tech. Already businesses are leading the way in converting to open source.

Platform cooperatives are not always practical. It’s just one form. Full democracy isn’t always easy or efficient or always the most ethical. Cooperatives work for banks and investments, but not for user networks. What use is a 1/1,000,000,000 share of a network with no revenue?

I suggest Benefit Corporations and B Corporation certification as a model which might work better for many kinds of big humane tech projects. These are for social projects and allow funding and profits, for employees to be paid oh so well! And these require ethics all around, from the way empoyees are treated to the way users are treated to the environment to everything really. These are social projects which make enough money to pay employees well and hopefully pay back investors for supplying the money for their ethical investment. The purpose of this structure can be to fund social humane tech projects on a large scale, such as displacing the tech giants. Profits are limited to many humane rules and are never maximised, and are necessary to fund operations.

Grants, volunteer projects etc have the goals of getting more grants or satisfying people’s needs for volunteer work.

For profit social projects with B corporation certification have the goals of getting their employees and shareholders paid for doing ethical work that they love. It’s the perfect job, the one you do good, the one you love, and where you get paid well under ethical conditions.

And it is the model which will disrupt big tech with a new generation of ethical open source tech.


#18

I am not opposed to Benefit Corporations, quite the opposite. Think they are not mutually exclusive solution to cooperatives: indeed institutional diversity is encouraged. Another example of how they are not mutually exclusive are coops like Savvy, that is Public Benefit Corporation and a cooperative at the same time! It’s a platform owned by test participants that allows members to take part in (mostly medical) trials and research projects.

Would be interested to hear if you think the only benefit of B corporations would be that they are don’t have the problems of democratic governance? Or is there more reasons you would think they are preferable to cooperatives?


#19

Yes there are similarities but cooperatives as opposed to B Corporations see different types of growth, and different types of ownership and different governance that you mentioned. B Corporations are much more easily funded by investors, providing the money needed to pay employees, do marketing and all the other expenses needed to compete with C Corporations.

But the founders and investors must go in from the start with clear ethical rules they will follow and a fixed plan that profits will only come under very ethical rules. There would also be additional considerations for employees, letting them hopefully all get incentives when the entire company does well, as well as other guidelines that the company will do ethical things all around and also have a social purpose. In that way it’s very similar to a cooperative, the main difference is there is more hierarchy and more economic incentive.