Running a Technology Cooperative

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Facilitated by cooperative members in the participant group

More and more technology cooperatives are serving the nonprofit sector, and this session will provide a chance to different cooperatives to compare experiences while also teaching others about their models.

Session Notes

• “How to Form a Tech Co-op” – great resource, URL was distributed on tech co-op listserve > --

• Challenge of getting people act like owners of the group – instead they rely on hierarchy and act like employees. Getting people to switch minds to encourage people to get business in.

• Democratic culture

• To work around problem of providing medical benefits for such number of people, work with Workforce Solutions, a company that does payroll and medical benefits.

• John Abraham book “The Companies We Keep” – challenges and examples

• Lessons learnt:

- Legal and accounting advice which lawyers and accountants weren’t familiar with co-ops.

- A lot of time on organizational model/structure

• Large Co-ops: make a lot of money and distribute it at end of the year to members. Don’t care how money is made.

• Small Co-ops: Try and make money-making processes more efficient and give back to community in that process.

• More support for large co-op model.

• Bay Area and Boston main areas in US for co-ops, and still very tough to find right/relevant legal and accounting knowledge.

• LLC – all equal partners in business, each owns a percentage. Bylaws which define how it works. Benefit over non-LLC co-op: legal concept applies outside of CA and US.

• No pre-existing bylaws that deals with different scenarios, e.g. if someone leaves. Important to plan for different scenarios from beginning.

• Give yourselves decent benefits, take care of yourselves as an org, not just wider community.

• How to figure out pay? Options:

-Everyone gets paid same hourly, but same hourly rate for people doing admin tasks to run the org?

-Everyone gets same salary, regardless of hours, regardless of productivity

-Pay less hourly, but pay for every hour, regardless of type of work. But no measure of productivity to assess whether hours being spent wisely.

-Pay rates for different jobs and levels of experience, but all members get same level of voting power. Base it on market salary rates.

• You should set limit on how much time you spend on admin work, as percentage of time, or fixed cost.

• Tools used:

-Harvest web application for hours tracking

-Basecamp for project management

• Determine how many billable hours you need to meet your fixed costs. Up to team to make sure you make the same hours.

• Owners, not employees, therefore can’t unionize normally. But Design Action is a bay area unionized co-op that does design work, so it’s possible, but it was a complex process to get union rep to represent them.

• Process definition and documentation of everything, because conflicts do arise.

• Size of org important: much tougher to manage for larger orgs. Though can work, e.g. Rainbow

• Bringing someone in after establishing co-op: trial period before you give them share of business. During that period, tough to treat them like owner when they weren’t. Ensure they understand what their responsibilities will be once they become owner.

• Strategies for understanding that they’re owners: you’re business partners, bound by contract. Member buy-in so that people take role seriously and are personally invested.

• Look for entrepreneurial qualities during trial period. Think of them as a business partner, not just a good programmer/etc. People have to be convinced that they want to be owners and are able to deliver on that intention.

• If you’re on trial, ask yourself if you’re happy working with these people? Do you trust their business decisions? Do you believe in their potential?

• Why do co-ops close?

-People going separate ways, different business goals

-Intense personal relationship, if both strong-willed, makes decision making very tough. Compare to marriage.

• Decision making options:

-Consensus not voting. Talk it out until you reach consensus. When you feel empowered, you’re much more likely to compromise. If complete deadlock, voting.

-Vote. But trust people whose expertise it is to make that decision > allow natural leaders to come out.

• Legal structures won’t save you from social problems. Good policy will help but not save you.

• How to manage tasks:

-Rely on expertise rather than trying to make it fair. People take it on, cos it needs to be done.

-Project coordinator who’s aware of who’s working on what and can assign tasks

-Weekly meetings to re-assign workload.

-If everyone is more or less on the same level of expertise/skills, so everyone chips in equally.