No, I taught him about co-ops two years ago. It probably just clicked this week, though…
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So, in a co-op, as it (if it) grows and hires more people to accomplish more tasks (say it starts to diversify their offerings), do the newly hired employees get an equal share of the company? At what point do the “founders” stop hiring people/stop offering equal shares? Or at what point does this model become ineffective (due to dilution of control)? Or am I just misunderstanding what a co-op is?
It becomes ineffective almost immediately. It’s not very strong in competition against standard corps/businesses.
Co ops suffer from the feelz. Employees rarely vote for employee cuts, so you get destroyed after the first economic downturn when everyone else makes correct business decisions.
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I would lovvvvve to hear Zeppy’s answer, but we all know he won’t touch these questions.
I agree with @pfury my guess is most co-ops that actually can/do grown beyond a very small venture stop being co-ops. You’re not going to give a college grad with zero experience the same control as someone with 30+ years of experience in the field and be successful long-term.
I’d imagine. As there’s no real, to my knowledge, successful model for co-ops to follow I’d imagine these businesses vary considerably, not only in goods and services produced, but also in vision and mission. I’m less inclined to believe “it’s the feels” as I don’t think that can be quantified in any meaningful way with the data that, I’d imagine, is available.
Are you basing this off of experience/observation? Or is there some empirical evidence that suggests a business structured this way fail faster/more often than average? I’m not trying to be combative, I’ve never really read up on the structure and viability of co-ops. It’s generally not covered in depth in Harvard Business Review or any other articles/texts I’ve read to this point. Is there a Co-op Monthly?
This seems like what I’d expect which is why I asked if there’d be a point at which the founders realize their dream is being diluted by the ever varying whims, desires, and vision of their new partners. Kind of reminds me, for whatever reason, of that Netflix doc “Wild Wild Country” about the Rajneeshee Cult…
How can he answer if he still wears velco-strapped shoes - and not because he prefers them?
So, co-ops would naturally be closed-off groups of close knit people with similar thinking, then. That’d make it, by it’s very nature, stagnant. I doubt they’d diversify or be agile enough to change with market demands.
I wonder what the successful co-op companies are modeled like, what kind of product mix they offer and if there’s any type of power imbalance among the stakeholders?
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It generally depends on how they operate and their internal structures.
They certainly aren’t above price fixing and creating monopolies, with the top brass earning salaries comparable to top CEOs.
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Right. I’d imagine there’s wild variability across co-ops wrt size, operations, earnings, etc. Sounds very willy-nilly. Like pfury said, very high on the “feelz” index, it would seem. Very low on the “business acumen” index - generally speaking.
I suspect this would be the case. If only because I’d imagine they see themselves as “do-gooders” and have a sort of moral superiority complex - and the only way to maintain their legitimacy in the marketplace is the stifle entrants via the vote. Generally speaking of course. But, then again, I don’t really know anyone who’s worked for a co-op nor have I dealt with any outside of a farmer’s market … and they’re very quick to denigrate the less expensive produce offered at my local supermarkets.
They tend to push the “buy fresh, buy local” doctrine…
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That’s the modern narrative. There were co-ops in the agricultural and farming sectors in Taiwan run by gangs in the 90s that used strongarm tactics to force independant producers to become members and then engaged in price fixing activities. Gangs in Asia can amount to 200,000 members lol.
(@SkyzykS I think your sister-in-law may know more about this)
Here’s one I’m vaguely familiar with. I used to sell them surplus maitake/sheep’s head mushrooms. Might go back there this year depending on the turnout. Easy way to unload 50 lbs. for a pretty decent price.
Also, typically funny to see Zep blather about stuff he is ignorant of and doesn’t participate in like his other greatest hits.
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Well ultimately co ops suffer from poor business decisions. You’re right that it’d be impossible to really quanitfy whether its just low intelligence decisions or feelz based decisions. 6 of one half a dozen of the other I suppose.
Experience only in the realm that I was briefly taught about co ops back in college. The observational is from their lack of existence compared to non co ops.
There’s certainly horror stories online of co ops, but I can’t speak to how accurate it all is. The main weakness of co ops is generally the inability to make correct business decisions.
I’ve seen debate that it’s actually because most people just aren’t knowledgeable enough about business to be making business decisions, but are granted the same voting power anyway.
Iirc there’s a decent number of farmer and lending based coops that are able to be successful, but I’d imagine that relies on the industry being fairly cut and dry that mirroring non co ops business decisions aren’t that hard. Beyond farming and small loans I actually haven’t heard of a successful co op.
Probably nearly impossible in any industry that can be touched by outsourcing to a high level
Maybe a little. She left Taiwan when she was pretty young, but is familiar with the central California environment. Likely just a slight variation on the theme.
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I wonder if their success has anything to do with being able to control the local independent competition a la:
I wonder if those successful ones could manage without the use or threat of force. They sound, basically, like unions at this point
Quite possibly. I chalk it up to how easy it is to make the correct credit/commodity decision. It’s not that hard to piggy back off of Corp America since the price tends to be the price.
Also could be some societal aspects. I don’t know a ton of farmers anymore but back home most were pretty much all on the “hate big banks” bandwagon.
It’d be interesting to see if those businesses could survive in a world where they don’t have standard companies to mimic.
Yea, that’d be intriguing. I’d imagined due to the democratizing of business decisions, it’d be super difficult to innovate. New ideas, that later turn out to be good, tend to seem crazy to people who with no imagination or who are afraid of risk/change. The likelihood an innovator would be voted down in a democratized structure are pretty strong I’d think…
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The general stereotype of co ops is similar to unions/HOAs/school boards/etc. Eventually most people lose interest and a minority ends up controlling the whole thing until/unless they do something to piss off the masses (like cut jobs during an economic decline for example).
Edit: obv this would probably be reliant on size of the org, the members, etcetc
Right. And this brings us back to the dilution of responsibility and control the larger it gets.
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That just… That just can’t be!!! Propaganda!!
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Guy expects us to believe corruption is a human construct instead of a corporate America construct??!?
Sounds like fake news to me. Everyone knows it’s big business that creates problems, and rich people.
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Inb4, “this is an outlier most co-ops have the people at heart unlike The greedy corporations”.
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