Should we become a coop?

👋 Hey friends

Soooo I've got a new obsession...I know, you're shocked.

Over the past week, I've been delving into the world of platform cooperatives - a structure where the stakeholders of services on the internet actually own the platforms they live and work on.

Now, that might sound confusing, complicated, and very "kumbaya", but I'm going to try and explain why I'm so excited by this concept and why we're seriously considering turning Lumastic into a creator-owned coop.

Also, I'm by no means an expert so take everything here with a grain of salt.

First things first.

What the heck is a coop? We have a running joke in our friend group that our goal is to make enough money to buy a plot of land where we grow our own food and just sit around playing music together. We affectionately call this cult our "eco-coop".

So, when I first heard about platform coops on the Rework podcast from Basecamp, there was a little cognitive dissonance going on. But really, coops are basically our og way of structuring companies.

coops are a business structure where the workers and key-stakeholders of the company actually own the company. Meaning the profits are shared not with shareholders or investors, but with the members of the coop. One of the largest and most recognizable coops in the US is actually REI.

What is a platform coop? So, about 4 years ago, this guy Trebor Scholz wrote this book called Uber Worked and Underpayed where he outlined how the gig economy is leading to a system of worker exploitation similar to what happened in the 19th century. In the book, he outlines an idea for a new model of marketplace platforms like Uber, AirBnB, Etsy where the workers actually create their own platforms and run them as cooperatives.

This book went kind of min-viral in the tech community in 2016 so the author and some other academics decided to start the Platform Cooperative Consortium where they promote and support the creation of platform coops. If you're interested by this concept at all, I really recommend checking out their website.

"Well, that's different."

As most of you know, I did not set out on this path to start a startup. I was just a small YouTube creator who thought that the infrastructure around the job lacked a ton of support - from tools to community. And over the past 2 years, I have become entirely disillusioned with the startup "ecosystem".

I remember vividly the very first day of the first accelerator program Lumastic was in when the director asked the cohort, "So, who's planning on raising money at the end of the summer?"

Every team raised their hands...except us. This was such a shock that the director actually stopped his opening remarks and asked me why.

I replied, "raising money is what you do when you want to spend money - not make it" (a spiel I shamelessly parroted from Jason Fried).

A year later, in a pitch session for Lighthouse Labs, someone asked, "What's your exit strategy?"

I was so tired of this question that rather than making something up, I said truthfully, "I don't have one - I want to work on this for the rest of my life".

They replied, "Well, that's different."

They were right.

These moments have shown me that the way I think about Lumastic - as my literal life's work - doesn't fit into startup culture.

So, when I heard about platform coops - where the goal of a tech company is not to scale to be a billion dollar exit, but to build a business that's dedicated to serving a community for decades, I devoured the information.

I don't know if we're going to do it or not, but it would make a lot of sense. When I describe Lumastic to people for the first time, I ask them to imagine a co-working space on the internet. A place where there are tools and people that help you make stuff as an independent creator.

If you think of that analogy, it makes a lot of sense for that to be coop. We literally talk about pricing for Lumastic as a "membership-fee". Like, c'mon.

How would that work?

To pull it off, I've got some initial thoughts, but I want to be clear that this is a thought experiment - nothing here is set in stone. You can think of this as me brainstorming in public.

One of the main priorities/benefits of being a coop would be sharing ownership/profit with our employees and creators. So, at the end of the year, if we have profits after paying our expenses, we could split those 50/50 between the team at Lumastic and distribute the rest to the membership as "dividends" (probably on a scale based on how long someone has been a member).

Another cool thing is that because coops are owned by a large, distributed group, they're run democratically. So, we could also have a voting system that allows the membership to decide if they'd like to forgo dividends in favor of funding a new development project or maybe even a Creator Fund that gives grants to creators trying to build their businesses.

Like, imagine how cool that would be to really mean it when we say, "By and for creators."

Closing thoughts

I am trying to tone down my excitement because this is a huge decision and I have been told that I can be....impulsive 🤣.

That being said, I am STOKED by this idea and if you find it interesting or have thoughts to share, I'd love to hear them. You can slide into my DMs on twitter, or you can email me.

Until tomorrow.