The Future of the Web is Employee Owned.
The next wave of marketplaces, services, and apps should build a network of cooperative infrastructure.
When you make an organic meal, all the ingredients need to be organic, including the pesticides used on the vegetables and the feed given to the animals. This extends to the ingredients that make up the dish itself. If any of these components are not organic, the meal is not considered organic. The same principle should apply to worker-owned companies and the companies they interact with. The overarching term for this interconnected pooling of resources is called the Solidarity Economy, which encompasses cooperatives, employee-owned businesses, and other forms of resource sharing that are different from current capitalist structures.
When you walk into a worker-owned cafe, everything that can be supported by the solidarity economy should be supported, if possible. This includes not only the wages of the baristas and staff but also the sourcing of the coffee and even the software the cafe uses, such as the point-of-sale (POS) system and inventory management.
Currently, I don't think the bulk of Americans consider the corporate structure a company uses before making a purchase, but this may change in the future. The bottom line is when you walk into a Starbucks, you're supporting an ideology that tries to scrape profit from every part of the business with little transparency. The flip side is walking into an employee-owned business where the individuals that make up the company have a stake in the company and are treated as equals with others in the company, have a say in the direction of the company, and can choose where to invest the profits.
We've all been burned by the "ethical" business model, with things like TOMS shoes and companies that rose to popularity with the buy-one-give-one model. Will the American population be able to differentiate other capitalist marketing techniques, like the buy-one-give-one model or greenwashing, from companies that are boasting that they are "employee-owned"?
When people create apps, they start out with small teams or even possibly one person. That person decides the pricing structure for the app. At a certain point, you may need to hire more people or get venture capital. What's the incentive for a single-person business owner to flip over "control" of the app to new employees? Most founders want to be sitting on a big pile of cash in several years, have stock options, watched "The Social Network," and want a business card that says "I'm CEO, Bitch."
Overall, the incentive to do this would be to appeal to companies that simply want to support the solidarity economy by virtue. If you were given a choice between two local cafes that offered the same product at the same price and were located right next door to each other, but one was an employee-owned cooperative and the other had a single owner, which would you choose? I think that for most if they had the knowledge about the difference, they'd choose the coop. Perhaps another benefit of choosing this model means that you can be competitive with price by the nature of it being transparent or, because you're a smaller operation, perhaps you're offering a more bespoke software solution. I think literally any app can be rebuilt with a different, more modern ethical profit model and gain traction among this new type of economy.
Compensation & Dedication
Are new employees even ready for this type of work and ownership? Are the masses already checked out and only interested in a paycheck? Unlike a small coffee shop, apps are digital, and teams are remote. While you may have people in a local coffee shop who are interested in working at the same company for several years and are invested in the long-term perspective of the business, would people feel the same about a software company? How do you prevent people from prioritizing their own short-term gain over the long-term vision for the company? As an engineer joining a coop, I can expect that compensation would be much lower than the Silicon Valley tech scene. What are the pros, what are the cons?
Obviously, I think my perspective personally is a little biased. I, like thousands of other software engineers, was laid off in the recent tech layoffs at the end of 2022. I was also laid off by one eccentric billionaire. One benefit of working for a coop would be that it would be generally harder to get fired, and the decision may not be up to one person. I think the model generally lends itself to more stable employment.
Many companies of this nature disavow venture capital as it tends to steer the ship in nefarious ways that don't benefit the workers. "Venture capital uses investor ownership to drive companies toward a quick, value-maximizing exit. Co-ops, in contrast, are designed to be owned by their participants rather than outside investors, prioritizing social value over the long term." [source]
One of the most challenging aspects of starting one of these businesses is funding it, and we need ways for people to pool their finances together with the hope of getting paid back over time with profits.
I think that there are some glimpses of this model for businesses arising. You can find companies near you on the United States Federation Of Worker Cooperatives website. What are your thoughts? Do you think this will be a trend? Is the future of the startup world going to be a capitalist VC-backed or will it shift into a more cooperative employee-owned model?
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