Thank you to Tech Workers Coalition organizers for putting Circuit Breakers 2024 together, and thank all of you for showing up Cooperatives are all of the things you can possibly do at a workplace: a mix of model UN, mission-driven organization, and capitalist enterprise. Then you play all of those things, all at once, on expert mode I've included a lot of resources on this slide deck, which is accessible at this URL. I've included some challenging reading and homework for you, all linked at the end in PDF and Excel format. I'm always here, one email away, ready to help.

This picture you see here is Ministry of Velocity in summer of 2018. In 2013, I co-founded Ministry of Velocity with a friend, and we freelanced underneath that label as a partnership My co-founder left in 2014, and I hired folks that I met through volunteering, client work, and in community We mainly do custom software, design, and project management in the public and nonprofit sector, and we've booked about $13m in sales so far By 2018, a couple dozen people worked at MoV, and I was investigating a co-op conversion with Project Equity In 2022, we formally began the process of conversion, and by 2023 MoV was a cooperative

For the audience: * How many of you consider yourself familiar with co-ops? * How many of you have been in a co-op in the past? * How many of you are in a worker-owned co-op today?

Cooperatives are a concept more than a specific legal vehicle: a bunch of people pool their resources together, participate in trade, and the members receive a benefit At least as of a couple years ago, the earliest record of a cooperative is the Fenwick Weavers' Society 18th century Scotland

The cooperative mass movement, however, is born at the same time as industrial capitalism, during the era of Dickens' Oliver Twist. In 1815, the British government's debt reaches a high of £1b at the end of the Napoleonic Wars. The 1834 Poor Laws created workhouses where homeless Britons were housed, fed, and clothed. Labor was compulsory. Activists at the time called workhouses "Jails for the Poor" One of the most popular theories among the rich was Malthusianism: a country’s population increases faster than its resources allow, which creates poverty Malthus proposed a lower birth rate and a higher mortality rate by substituting philanthropy for the poor laws (welfare), which he felt “create the poor which they maintain”

Picture of New Lanark, Scotland Robert Owen bought the cotton mill at New Lanark by his father-in-law David Dale in 1799. Owen didn't like the material conditions workers faced, and developed his own brand of utopianism socialism, and his ideas grew into public talks about self-governing “villages of co-operation” In good conscience, I can't continue without acknowledging that Owen's wealth and utopian vision were built on the cotton industry This means this early utopian vision is directly connected to industrialized chattel slavery in the United States, the damage of which is born to this day by Black and indigenous people in this country

Picture of the Rochdale Pioneer store outside Manchester Owen's talks inspired The Rochdale Pioneers. The Pioneers were a mix of Chartist and Owenite activists, workers, and well-paid artisans. They started a successful series of businesses, starting with this store in Rochdale, which is still a location you can visit today. Their model was wildly successful and hundreds of small cooperative stores popped up around northern England within a few years The Pioneers also planned an expansive, decades-long vision for growing their co-op store into a full utopian society, including multiple industrial sectors, housing owned by the community, and creating a college all owned by the community Although the housing didn't happen, and some of the industrial enterprises failed, the Co-Op College was finally established in 1919 and still exists today

The USDA heavily promoted co-ops in the 1920s. With the passage of the Capper-Volstead Act, cooperatives became an easy way to avoid antitrust laws Remember how I introduced cooperatives as a bunch of people coming together, pooling resources, and acting in their own benefit? It turns out that's the definition of a cartel 1936 picture of the Sunkist building, headquarters of the California Fruit Growers Association, who established an alleged citrus monopoly in California

Communities of color used co-ops to gain food access in the Jim Crow era and the natural foods movement adopted this strategy in the 1970s. This picture, taken in 2016, shows some members of Cooperation Jackson, an example of a politically-active enterprise more in line with the original political and social movement of the Rochdale Pioneers

Historian, cooperative scholar, and Thompson Rivers University president Dr. Brett Fairbairn says in "The Meaning of Rochdale: The Pioneers and Co-operative Principles" that cooperatives have a dual nature as an association and an enterprise While the enterprise aspect of cooperatives is similar to any business, the association aspect is a unique social formation that allows them to transcend profit-above-all logic and focus its energy on the community.

A co-op is a business, and it's important to explore what that means. For the audience: How many of you plan to start a co-op?

If you're coming into this room and don't know what to build, even if you're going to be offering hourly consulting, I recommend the Lean Startup book by Eric Ries As a co-op starts up, it looks like everyone else: recruiting founders, landing its first sale, doing a little planning, and finding money If it finds money, the founders incorporate, and need to make some serious decisions This is the first point of difference compared to a traditional business: rather than creating a founder-led dictatorship where a 23 year old PhD dropout makes random guesses and maybe they work out, a co-op creates a democratic power structure and make random guesses together

This is Jeff Parr, who's been at Ministry of Velocity since 2015. Jeff's an entrepreneur with a few decades of experience, and he's been a mentor to me at various points Jeff's insight is important: the discomfort he's speaking to here is that power dynamic on your team, it exists today and it's the first hump to get over Here's a really important insight that speaks to Principle 5, education: you can pay to get skills or an expert in the room, and this can save your co-op.

Patronage comes up a lot in co-op literature. It basically means profit sharing, split up by how much you worked for the co-op. On the next slide, I've included a flowchart describing how patronage works. I'm not going to read this slide here at this talk, but you should look at it after the talk is over. It's a very thorough description of the way patronage is calculated.

Let's start from the top by imagining a worker-owned hardware store. The hardware store makes $10,100 in a week, and the members collectively worked 90 hours. The members made a set of paid gardening videos, and that brings in $100 in a week, which are kept by the store for operations. The $10,000 amount gets divided into a collective amount used to reinvest in the company. The remainder is split up between members based on the number of hours they worked. Two members put in 40 hours each, so each person is allocated $4000, and the last person who worked 10 hours is allocated $1000. This money goes into an internal capital account. The lease, utilities, inventory, and point of sale system all cost money, and the members agree to pay that out of their capital accounts. The rest is for the members to either keep in their capital accounts at the co-op or take home with them.

For the audience: When was the last time you made a decision that affected your workplace?

This is Rae Bonfanti, an engineer at MoV who helped with the conversion Notice Rae's insight here: she's speaking to the efficiency of more structure. While it might seem counter-intuitive, the division of labor doesn't have to mean people lose power. This speaks to the tension within Principle 2, Democratic Member Control.

There are two types of activity when operating a business, and they happen at different cadences Governance is what a board of directors or a C-suite does at a traditional company: strategic planning, creating policies, setting goals Management is what the rest of the management stack does at a traditional company: day-to-day operations tasks, implementing policies, directing personnel to meet goals In a co-op, there are potentially no bosses, so members perform these functions in different configurations. The USFWC runs a co-op clinic that talks about four main types of co-op configuration

Collectives are where all members have equal governance power.Management in a collective requires a very engaged, empowered, educated, and developed membership. It's good when everyone's at the same level. You can build accountability in a collective with peer evaluations, a shared backlog of tasks everyone works on, and a very clear grievance process.

Co-ops that are too big for collective management may use a structure like Sociocracy. A Sociocracy co-op focuses on clear responsibilities for members, where every work area is managed by an empowered circle (committee). Circles coordinate among themselves by sending representatives to a general circle. Governance might be handled by a governance circle that performs the same functions as a board.

Co-ops that have an elected board empower this governing body to differing degrees. Some co-op boards maintain significant shared governance with members often including monthly, quarterly or very active annual member meetings. Boards are often empowered to create policies, lead strategic planning, set an annual budget, coordinate between teams and oversee a general manager if the co-op has one. Quorum (the minimum number of members needed to be participating in a meeting or decision) is often set higher and supermajorities (more than 50%) are required when voting on certain decisions.

Some co-ops are organized much closer to a traditional company. These have CEOs or managers that are hired, fired and overseen by the elected board, usually with a majority vote decision-making process. Members have little governance power because they're not on the board or on empowered committees. However, they might ratify major decisions at an annual meeting.

Now we're going to split into groups and put this theory into practice I took this exercise from a much longer workshop that McKenzie Jones runs when she does cooperative development

Our goal today is that everyone here should be able to serve on a co-op board You're going to get into groups and fill out the worksheets in front of you I'll have sample decisions on the screen, or you can discuss your own It doesn't matter if you finish all of them, or you only talk through one Just keep it simple