With the Platform Coops Now! course and accelerator about to start, it is timely to reflect on some great work done by Megan Larcom, Jenny Weissbourd and Jeremy Avins.
They undertook a study of the alt-labor movement – being those organisations and campaigns working outside of traditional bargaining structures. They looked at how alt-labor is evolving and where it is succeeding.
High touch versus high tech – the challenges of organising at scale
The table above captures the lens through which they viewed this landscape. Essentially they categorised organisations by the scale of their activities – to what extent they were high touch versus high tech.
To explain their approach:
Work shapers – are those organisations that facilitate or restructure labor’s role in the workplace, giving workers a direct role in governance, management or ownership. These co-determination strategies are high touch as they are very much about workers and their relationship with the management of specific companies. For example, Lobster 207 – a business very similar to our very own Geraldton Fisherman’s Coop.
Worker centres – are also extremely high touch organisations that are focussed on information and training of labor. Eg. The Laundry Workers Center
Coalition builders – organisations that are serving workers day-to-day but by working on systemic change, often drawing on traditional organising approaches. The Justice for Janitors campaign led by the SEIU is an example.
Platform connectors – organisations drawing on scale as their source of power, as they are set-up as platform-based intermediaries. Workers can share experiences and build campaigns at scale. For example, the WorkIt app that grew our of Our Walmart and has been adapted in Australia by the the United Workers Union for care workers.
Information equalisers – organisations that help workers overcome information asymmetry. They give the example of https://www.glassdoor.com.au/ – a jobs matching platform similar to Seek. Not sure that I agree that these companies are alt-labor organisations – unless they are platform coops (but more on that below).
A key challenge then is discovering how to blend the high touch and high tech.
The union-coop model – Lobster 207
Lobster 207 is a great example of the union-coop model, as it’s both a local lodge of the IAM union and a marketing coop that provides members with a way to influence industry and to capture more financial value from their labor.
It started in 2012 in response to a crisis, as coops so often do. Lobster prices were at a level that made being a lobsterman simply unsustainable. A serendipitous connection led to the introduction of the IAM who approved an ‘unusual organising campaign’. It was unusual because the lobstermen were self-employed.
The campaign first involved flying the lobstermen to attend training by the IAM in organising and political tactics with the aim of equipping them to form their own local and take power back from the industry. In Sep13, with legal help from the IAM, Local 207 was formed. At the same time the Marine Lobster Union, a statewide marketing cooperative, was incorporated. This enabled the lobstermen to be exempted from anti-trust provisions, and become price-setters rather than takers. From 100 members in 2014, they grew to 550 members, or 10% of the industry, by 2016.
Their success can be attributed to two key factors:
Political – the union was able to help them organise, for example, training members in group bargaining strategy, and enabling them to lobby for specific legislation and run candidates for industry bodies.
Economic – the cooperative business was able to command higher prices and with their group buying power to acquire their own wholesale business (funded by the Bank of Labor and IAM locals).
Lobster 207 is a shining example of the union-coop model where a cooperative becomes a powerful mechanism for worker voice. The alignment of interests across members as business owners means that they can have greater control over their work while leveraging solidarity to increase their bargaining power.
Where are the platform coops?
There is a very large platform coop shaped hole in the research. To be fair the paper was published in Jan18, and as platform coops are still very much an emerging sector their profile as alt-labor organisations at that time was easily obscured from view. So let’s see how they would fit into their nomenclature:
Platform coops as information equalisers – The idea that a privately-owned labour hire platform, that generates its revenue from employers, could be considered an alt-labor organisation is deeply flawed. However a worker-owned platform does offer a very clear mechanism for workers to address issues such as information asymmetry. Sadly, we have a current example of this in Australia where the $500m Working for Victoria Fund, that has been tasked with addressing the unemployment crisis, has chosen to exclusively partner with a privately owned labor-hire platform. Workers, and the organisations that represent them, are unable to access any of the information that is being aggregated by this platform. This is a striking example of the difference between a platform coop that is owned by its members and aligned to their interests, and a privately owned platform that will always aim to maximise returns to its shareholders.
Platform coops as platform connectors – If our social media were owned by its users, then they would be the perfect platform connectors. As they are not, there is a very real and significant role for trade unions to use their resources to create the platforms that can play this connecting role. The WorkIt app is a great example of this. A platform coop is the perfect operating structure for unions and other organisations to aggregate their resources and collaboratively create the technologies that we need to build the labor movement.
Platform coops as work shapers, worker centres and coalition builders – One of the most exciting things about platform coops is that they offer the promise of being able to blend the high tech with the high touch. As member-owned businesses, cooperatives are designed to promote individual agency while aggregating group power. This means that a platform coop for cleaners can both enable creation of a ‘quality assured’ brand at scale (and thereby scarcity) while also enabling cleaners to create localised nodes where they can work as local teams. The Up&Go model in Brooklyn is a great example of this.
The future of the union-coop model
The opportunity for the labor movement to grow around the union-coop model is profound. As the paper concludes, the union-coop model shows:
unions can support self-employed workers through a coop
a sustainable economic approach where union dues are paid out of business profits
the value of union political organising experience, tactics and training
They conclude that “A new labor movement requires collaboration not competition” between the old and the new… and I would add between our trade unions themselves.
I’d recommend investing 15 mins to watch their video – here and if you’re keen their research can be found – here.
For our first interview in the Ethical Fields co-design of funding for communities, we were very lucky to have Anna Guenther, Chief Bubble-Blower for leading equity crowd funding platform, PledgeMe join us.
ABOUT OUR GUEST
For those of you that don’t know Anna, she is the co-founder of PledgeMe, New Zealand’s first crowdfunding platform. Since launching, over 1,400 creative, community and entrepreneurial campaigns have raised almost $50 million through PledgeMe. Campaigns have ranged from Ethique who raised half a million dollars in ninety minutes from going to the public, through to craft beer company Parrotdog raising $2million in two days to move into their new brewery. Anna has also worked for the New Zealand Government, MIT and Harvard, and completed her Masters in Entrepreneurship with a focus on crowdfunding.
This TED talk “The Anti-CEO Playbook” – where the founder of Chobani, Hamdi Ulukaya, tells the story of buying a yogurt factory that was being closed down by Kraft and how it led to the revitalization of a community and creation of a global powerhouse.
Community is the keystone – The success of PledgeMe, and really any crowd-funding campaign, is the buy-in from its community. The role of those leading a campaign is to activate their tribe that believes passionately in its objectives.
Government is the enabler – The role of government is to encourage and nurture community-led actions through education and targetted financial support. Too often their actions hinder rather than promote community-led campaigns.
Land as a stakeholder – New Zealand now legally recognises land and rivers as natural persons. What if land had seat at the board table? How would the conversation change?
BARRIERS TO OVERCOME
Unhelpful regulation – Although intended to unlock regulatory hurdles, the requirements for equity crowd-funding in Australia are formidable. The PledgeMe checklist for enabling new issues is 10 times longer in Australia than in New Zealand. It significantly drives up costs in terms of time and dollars, and undermines the effectiveness of equity crowd funding.
Misplaced grants – Government has a key role to play in supporting the public good aspects of some community projects. But too often government defaults to grant programs that are administered by a bureaucracy trying to interpret government policy that in turn tends to lag public demand. Better to leverage the wisdom of the crowd and co-invest with communities that are investing with their feet (and wallets) in the things they passionately believe in.
Understanding impact – PledgeMe struggled to understand how to accommodate financial and non-financial goals in their decision-making with respect to approving projects for their platform. They settled on a target of 50% of projects must include non-financial impacts in their objectives (currently over 70% have them). Then there is the question of how to measure impact – there isn’t a dominant standard, and how do you manage ‘data fatigue’ and our very human need for a narrative.
SEEDS OF HOPE
Shared superpowers – communities tend to grow around a successful business or model – this could be an anchor institution or shared productive activity. So Superpowers will come from building on what already exists and what the community can rally behind.
From the Founder, Jenny Doran…
“We’ve also created what many call the “Disneyland of Quilting” right here in Hamilton. Our darling little town now attracts visitors from across the globe. Heck, we just had a bus full of quilters from Australia pull into town who were absolutely delightful! With 12 quilt shops right on main street—each featuring a different fabric theme—you’re guaranteed to find quilt fabric you’ll fall in love with! We even have a spacious Sewing Center for quilting retreats, great restaurants, the world’s biggest spool of thread, and a place called “Man’s Land” full of comfy reclining chairs and TVs, where weary folks can stop in and take a break from shopping (and even play a round of pool!) Hamilton, Missouri, (aka Quilt Town, USA) is a must-see destination for any quilter and I can’t believe I live in such an incredible place!”
Community-powered infrastructure – There is plenty of opportunity to use equity-crowd funding in the infrastructure space, but it has not been widely adopted yet. This is partly a function of structure – only public companies can raise capital under the equity crowd funding rules. In funding infrastructure, there is always the question as to where the line is between government versus privately-held ownership. Somewhat depends on the absolute breadth of the public good – is there a community that has a common cause or is the driver based more on place or location. Hamburg water utilities…
Raised just over $2m to acquire the Food Connect Shed, a warehouse that would become a local community hub for food. Its vision is to create a world where everyone has access to healthy, fresh, ecologically-grown food that is fair to growers, eaters, and the planet. And according to Rob Pekin (Co-Founder) – “In order to fix our broken food system, the infrastructure needs to be owned by the public.” In keeping with this vision, it’s equity owners are called ‘careholders’.(Check out the PledgeMe case study – here)
Network of trust – Equity crowd-funding works best when there is a tribe of believers that are able to rally around a campaign. The average single investment in a campaign is $2,000, while contributions are often limited to a maximum of $10,000. This means campaigns tend to build on wide community support. This creates it own advantages as the raising is based on a network of trust. The leaders of a campaign will be known to the community from whom they seek support. That community will in turn spread the word to their friends and family. These trust based relationships serve to de-risk the projects.
When Mondelez announced it was closing the Cadbury Factory in Dunedin, New Zealand, a group of local citizens decided something must be done to keep chocolate making skills and jobs alive in the city. With the help of PledgeMe and Firebrand set up the “Own the Factory” web landing page to gauge public interest in investment to retain confectionary and chocolate manufacturing in Dunedin. During the two week campaign considerable national and international media coverage resulted in $5.7 million pledged. Subsequently, the Own the Factory campaign teamed up with a the Otago Chocolate Company to create OCHO – raising $2m via PledgeMe from the local Dundedin community.(Check out the campaign here)
Co-operatives tend to mirror their cultural context. Their democratic nature allows them to escape the homogenising demands of capital and to focus on the different ways value can be delivered to their members and communities. So it was not so surprising that the annual Platform Co-operativism conference in Hong Kong was notable for the many faceted ways that platform co-operatives are developing across the globe. They may have a common gene pool but the way it is expressed is very much a reflection of the community that they serve.
Defining the space
A common definition of platform co-operatives is still emerging.
Trebor Schultz (the New School) as the primal protagonist of the Platform Co-operativism movement spoke to the very tangible ways that work is being done to build momentum. This includes projects around the Platform Coop Development Kit that are at the vanguard of change to create open-source software by industry sector and by common function. It’s a very utilitarian definition of platform co-operatives.
In line with these developments, Danny Spitzberg (CoLab) suggested that perhaps it makes more sense to talk about ‘co-operative platforms’– that they are not a new type of co-operative but a specific way to organise a technology platform. They represent the opportunity for the value of a platform’s network, whatever its size, to be retained by its users rather than passed over to profit-motivated shareholders. This makes intuitive sense, as unicorns can only exist if they are able to capture the lion’s share of the network value they catalyse.
The nature of the network was also pivotal to Michel Bauwen’s (P2P Foundation) thinking around the trends he sees emerging in the co-operative sector. In a wide-ranging talk, he mapped co-operatives against two axes – with distribution of value contrasted against their reach:
This approach takes a narrow definition to ‘platform’ – limiting platform co-operatives to the ‘for-profit and centralized’ quadrant – which then enables Michel to distinguish between other network enabling technologies:
Platform coops – are primarily digital marketplaces
Ledger coops – are technologies that enable distributed capitalism
Protocol coops – are open design repositories for common infrastructure development
Cosmo-local coops – are urban commons projects that can use shared technology
For the purposes of this note, we’ll adopt a simple definition that co-operative platforms (aka platform co-operatives) include all those co-operatively owned technologies that enable communities to create online networks.
There is a willingness for co-operatives to share platform technologies across borders.
One of the benefits of being a global conference is that could draw on the latest thinking and developments from a wide variety of industry participants. And as co-operatives are pretty good at sharing, it offers a way for the sector to foster development across borders.
But while platform technologies are generally portable by nature, the way they can be shared will depend on the economics and structure of the networks that they enable. So there were examples at the conference of open-source codebases, hosted software-as-a-service options; peer-to-peer licensing for sharing of code between members; and, proprietary closed software platforms that were owned by cooperatives.
Similarly, the reach of the communities that use a technology can define how platforms can achieve scale and therefore the way they might be shared – from platforms that are defined by an industry or function and that can be adapted to meet local needs, to placed-based co-operatives that seek to take advantage of common infrastructure platforms.
We can see these factors being played out in the different co-operatives that presented at the conference.
This approach is exemplified by the work that the New School is doing with SEWA to create a platform to assist beauty workers in India. Similarly, CoopCycle has created open-source software that enables worker coops to create their own local bike sharing schemes. By solving for a specific problem and making the solution open-source, it is hoped that these platforms can be picked up and developed to meet similar needs in other parts of the world.
Open source software has it limitations, particularly as it still requires that each instance is customised and maintained to meet local needs. For this reason, another way of targeting scale efficiencies is by creating hosted solutions that offer more plug’n’play type functionality. For example, Sharetribe – which enables communities to create their own labour or product hire markets – is a co-operatively owned platform that offers hosted, customizable services.
Special purpose platforms
And then there are the platforms that offer services that meet the specific needs of communities of interest. Their technology platforms tend to be highly customised to the circumstances and target scale at the nation-state level. For example, a worker co-operative like SMart offers very sophisticated back-end support for skilled freelancers. It needs to be specifically customised to the regulatory framework of the region it operates in. Similarly, NeedsMap – which connects donors with communities in need – maximizes its effectiveness when it can match needs on a country-wide scale.
Finally, there are the platforms that are developing capabilities that can support co-operatives regardless of their purpose or structure. These are platforms that are aiming to create common infrastructure. So for example, Coop Exchange is aiming to make it easier for co-operatives to raise funding. Similarly, Geddup is being developed to support distributed organising and governance in co-operatives. Interestingly, Geddup takes a blended approach to sharing the technology as it is being created as an enterprise coop where its members are large organisations that require their own instances, and it also makes a hosted ‘community’ version available to smaller organisations.
The sharing of value across different stakeholders remains a challenge for the sector.
One of the underlying themes of the conference was the question of how value is shared between founders and investors of a platform on the one hand, and its users on the other. It’s a foundational issue. Notwithstanding their democratic approach to the distribution of value, platform co-operatives still need to find ways of attracting the resources required to foster development.
To resolve this challenge, some platforms have sought to align interests by promising to share surplus with founders and investors subject to pre-defined constraints. For example, Fairmondo’s model is to allocate slices of equity to founders and investors, but to also place limits around individual shareholdings, salaries and dividends paid. Notably, Coop Exchange is seeking to free up investment in the sector by promoting a standardised methodology for sharing value based on the Fair Shares model that rewards investors, founders and users.
These concerns are not just limited to multi-stakeholder co-operatives. The sharing of value between members based on patronage or other metrics can give rise to wide dispersion of returns. The debate around these issues suggests that this remains a key focus for platform co-operatives to address both at their founding and as they grow.
There is plenty of scope for the cooperative sector to work with data.
The conference showcased some cracking examples of how data sharing and analytics can change communities:
PetaJakarta showed how using open source software (Cognicity), they had been able to change the way Indonesia could respond to flood events
Shanzhai City is developing tools to measure impact of social investing that can be embedded in the funding structures themselves via smart contracts
Datavest illustrates a data cooperative approach to helping members realize the value of their data
Notwithstanding these examples, there remains an underlying concern about how data is managed by co-operatives and the potential role of emerging technologies in augmenting this. In particular, there was some deep suspicion around blockchain approaches to solving problems.
My view is that co-operatives, with their focus on individual agency within a collective structure, are ideally placed to help with the transition to a data-driven economy. The big technology companies are already well advanced in developing algorithmic ways of interacting with the disempowered consumer. Co-operatives that can understand and develop event-driven solutions, while still enabling members to retain control over their data, offer a very healthy alternative approach.
The conference was a brilliant hotpot of fresh ideas. In our own corner of the world, it’s already lead to the introduction of a few of these international efforts into the Australian market. We look forward to seeing where the movement has taken us next year.