(2022-03-06) Could Tech Startups Become Community Owned Coops

April M Short: Could Tech Startups Become Community-Owned Co-Ops? Nathan Schneider, assistant professor of media studies and director of University of Colorado Boulder’s Media Enterprise Design Lab—a think tank for community ownership and governance in media organizations—spoke on the Laura Flanders Show about the drawbacks of the “conventional” startup model, and the necessity for alternatives.

“[W]e really need a new set of tools to enable companies, as they mature… to become community-owned by whoever relies on them the most,” Schneider said.

Meanwhile, nonprofits, which can provide the platform for ethically driven innovations in the tech startup space, unfortunately, have not had great success with them. As detailed in a recent article in the Nonprofit Quarterly titled “How to Build Platforms that Our Movements Can Own,” the nonprofit funding method is not sustainable for the “capital intensive, open source driven, risk-laden landscape of technology today,” and tech startups tend to be too expensive for nonprofits to fund as a side project.

the authors of the article in the Nonprofit Quarterly are spearheading a potential solution... known as “exit to community.”

The authors of the Nonprofit Quarterly article are all members of Open Collective.

The platform was launched in 2015 in response to a need for a place where informal collectives and community volunteer groups—like mutual aid groups, skill shares, tool libraries—could put their money.

Rather than sell Open Collective for profit, its co-founder and CEO, Pia Mancini, recently decided to sell the company to its stakeholders

Laura Ruffin, co-founder of the storytelling co-op Crux and former co-CEO of the Fractured Atlas, the country’s largest association of independent artists, is also working with Open Collective on their exit to community strategy.

we already support [more than] 200 mutual aid groups and nearly 3,000 open source software groups,” she says. “These groups—mutual aid and open source [software]—have shared values but entirely different cultural practices, communities, and ideas about ways of working

April M. Short of the Independent Media Institute (IMI) interviewed Pia Mancini, Caroline Woolard, and Nathan Hewitt, program manager of Open Collective

If you accept the premise that your mission (enabling communities to be sustainable) will be as relevant in 50 years as it is now, then you need to think about the role of the funders and team

At the end of the day, we are building infrastructure for the commons to be sustained

AMS: Why is the conventional startup model less than ideal?

As part of this process, someone else must purchase the investors’ portion of the company. The standard ways to exit aregetting acquired or engaging in an initial public offering (IPO)

The problem with both the options is that [they do not factor in the] purpose and social impact [of these exit options]. These pathways essentially put a company on sale to the highest bidder.

Nathan Hewitt: In many cases, tech founders have good intentions. They create online platforms because they want to create new ways for people to connect with one another

all of that falls to the wayside: the goal becomes profit, above all else

AMS: What is the incentive to “exit to community” and give stakeholders ownership of the Open Collective platform

with that infrastructure comes a network, and a community of collectives, nonprofits and funders.

Open Collective is a legal, financial and technical commons—a piece of shared infrastructure.

very glad to have the help of the crews at [other organizations working toward similar goals like] the Metagovernance Project, Exit to Community, MEDLab, Purpose Foundation, and Zebras Unite Co-op that are helping promote the exit to community model.

When users have economic power, they can ensure that a platform serves its community and its society

Open Collective might become a cooperative or we might use another legal tool to achieve community ownership and governance.

Open Collective’s cap table is made up mostly of like-minded individuals (angel investors either working on similar problem spaces or aligned with our mission) and funds that have aligned investment thesis.

Part of the reason we want to start returning value to [these companies] is because we want them to invest in other companies like us.

I guess, if you buy into the mission truly, you also buy into this exit.

Community ownership is even more important now, when things seem to be pulling apart. (Is there a 3rd choice?)

Whether that has to do with Open Collective, DAOs [decentralized autonomous organizations] and the blockchain, or other tech tools, I think that community ownership and governance are essential for us to collectively, cohesively face today’s many challenges.

The Urban Institute’s “ABCs of Cooperatives” framework is a really useful tool for thinking about the benefits of collective ownership.

In general, society evolves a lot faster than the institutions that govern it.

What we are seeing today is a reflection of that systemic noise and a societal response to a lack of institutional mechanisms to organize, participate, create and share value in contemporary society.

whatever you think of the Web3 world, I think the energy and growth in that space shows that people are definitely feeling the need for new models of ownership and governance.