 Good afternoon. Welcome to the Cooperative and Open Source talk, A Match Made in Heaven. My name is Watson. I'm one of the founders of the Lowell Cooperative in Austin, Texas, as well as the Austin Software Cooperative Meetup Group. As a cooperative that has contributed to Open Source, I'd like to share some of the synergies I've found between these two communities. So today, we're going to explore the concept of a cooperative and its motivations as well as the motivations for Open Source itself. We'll try to answer the question of whether a cooperative is a good business entity for developing open source software. So what is a cooperative? The term cooperative covers a broad range of enterprises. There are cooperatives based on purchasing, selling, labor, and ownership. We're going to be concentrating on cooperatives that are worker owned and worker directed. In order to tease out the synergies between cooperatives and Open Source, we should investigate some common motivators to these communities. Borrowing from Daniel Pink's book Drive, we could categorize the motivators as monetary, autonomy, mastery, and purpose. Monetary is simply the acquisition of money or liquid acids. Autonomy is the ability to choose one's own tasks and pathways. Mastery is about craftsmanship or being craftsmanship or I should say artisanship and being an artisan in one's field and purpose is about making a positive depth in the world. Feel free to send any questions into the chat and I'll stop and try to answer them. I'm going to try to go pretty quick here. There are several shared themes between Open Source and cooperatives. Both try to decentralize power, which is to say, both try to flatten the intrinsic hierarchies, albeit using different strategies. Both have unique and strong views for their type of governance. Open Source has a strong history of developing a community of contributors while trying to be inclusive of the community that is external to its contributors. Cooperatives have a history of developing an internal non-exploitative culture of owners and then an external community that uses services. Both Open Source and cooperatives are concerned with fair compensation but approach the problem in different ways. Lastly, both Open Source and cooperatives tend to consider ethical implications of the products and services that they provide. Decentralization of power. The first shared theme is decentralization. Both Open Source and cooperatives attempt to decentralize power. The motivator for this shared theme is a drive for autonomy. Decentralization is about distributing the work that is done to a wide base. For Open Source decentralization can be facilitated by decentralizing leadership structures, but sometimes this isn't the case. The biggest driver for decentralization in an open source project is the organic development of a diverse contributor base. Any open source project can be forked, which incentivizes the original project's leadership to be more liberal in accepting the best ideas as contributions. So for cooperatives, decentralization comes in the form of the worker-owned aspect of the entity. The steering power and direction in a cooperative is dispersed through the group via the one worker, one vote principle. Each worker has much more say in what they are working on compared to a traditional entity because they're an owner in the cooperative. Democratic, let's see here, governance or democratic governance. Again, if you have any questions, I'm so free to post them and I'll take a look at them. Democratic governance is another shared theme between open source and cooperatives. It is, again, motivated by the desire for autonomy. While decentralization spreads the actual tasks into a wider area, governance is about deciding which tasks should be prioritized. While decentralization in open source is attractive because community members can avoid coordination with a hierarchy when performing individual tasks, democratic governance is what provides a method for influencing the overall project. General Bacon in the art of community states that there are three types of governance structures within open source. The benevolent dictator, the enlightened dictatorship, and delegated governance. Enlightened dictatorship is based on the idea that people gain influence with it by becoming thought leaders and through doing useful work. Whereas delegated governance has power delegated to small groups and those small groups come together to form a single governing body. These latter two forms of governance share the same spirit of worker participation in governance to a great degree with cooperatives. That's where they are similar. Within worker-owned cooperatives that have a one worker, one vote mandate, the workers can legally vote the leadership into their roles. In worker-owned, worker-directed cooperatives, the workers decide where to invest or spend the surplus or profit democratically. And we're going to talk a little bit more about that later. In all forms of cooperatives, the workers have a high degree of participation in how they are governed, but the most democratic type of cooperative is the worker-owned and worker-directed cooperative. So I think we have a couple of questions here. I'm going to go ahead and try to take a look at some of these. Let's see here. I'm going to go ahead and see if we'll try this. Show this question. All right. So David Klein, I love this concept. Thank you for presenting. I have, have you spent any time thinking about a buyer's co-op model and how would you, how would it work with open source? So a buyer's co-op where people are coming together in order to purchase, I think that's a purchasing co-op. So I'm not so sure. Maybe a little clarification there. I don't know how that would maybe work. I'm sorry, with open source, but a buyer co-op or purchasing co-op where you come together and purchase health insurance or something like that, those are pretty common and they seem to be a good idea with all of these examples or there's plenty of examples within for cooperatives of just about anything that you can imagine. But Inspiral is one of my favorites and they're they're basically a cooperative of cooperatives. You might want to look at them as far as probably seeing if they have something that might be a purchasing cooperative. And we're going to go ahead and answer another question here. So we've got Taylor Carpenter. Are there any examples of open source projects using delegated governance? So the example that General Bacon uses for delegated governance. I want to say, well, there's a patchy maybe and the CNCF, the Cloud Native Foundation would be one, right? So small groups coming together to form a single unifying body. The higher end or the upper end is kind of more strategic. But and they they don't get into the individual like the operational day-to-day decisions. Those are left to the individual groups. So that's kind of where the delegated governance comes in. And I want to say, General Bacon, who's I want to say he spoke earlier today, he favors the delegated governance style. Let's see here. We're going to take a question from Angie. This talk is more interesting than than I thought. Can you provide a real world example and mention a case study? So I'm going to mention a case study at the end. So it's going to be a good one. So let's see. Who else? OK, that's good. Let's go on to talk about communities. OK, so both open source and cooperatives are deeply intertwined with their communities. A big motivation for open source contributors is the development and showcasing of the mastery of one's craft. This gives social capital to the individual contributor within the context of a community for many cooperatives building the community is the business strategy which leans towards the greater purpose as the motivation on going back to the different styles or categories of motivation. For these cooperatives, where purpose is their motivation, a feedback loop in the form of serving the immediate local community with their products and services is the it ends up being the best way to attract new members to develop those projects, products and services. So it ends up being kind of a bootstrapping, right? So where the business, the community is the business strategy that so it's kind of interesting. You might, again, try to take a look at a spiral for a good example of that. So let's talk a little bit about compensation. Let's see here. So monetary compensation is the traditional way to think of motivation for economists and the general public. Both open source and cooperatives have a non-traditional or conventional approach to compensation. And as mentioned before, open source is largely driven by social capital, but that social capital can indirectly have monetary gain in the form of building a strong signal for competence in one's craft. So this serves as a kind of ideal resume for the contributors to an open source project. Cooperatives can sell products and services as a normal business would at the group level, right? So the higher level, but at the individual level, the compensation schemes can be similar to those that you would find in a business that runs as a partnership. And this is a kind of really important to understand about a cooperative. You really to understand when people are confused about a cooperative, I always just say, think about a law firm. They run as partnerships. And it's always it's interesting that the people that understand law, they opt to form an entity that's a partnership. Whereas people that don't understand law and fairness and things like that, they don't they they're happy to just consent to a hierarchy and a corporate structure. So I find that to be tremendously interesting. Right. So within a cooperative, some way of working out a fair compensation must occur in an entity that has one member and one vote. So it kind of serves as a that's kind of like a a a a a a a barrier to stop unfair, unfairness in equitabilities and things like that. So, for instance, corporations, the typical corporations have a ratio of executive to worker compensation. That's like two hundred and seventy eight to one. Whereas a partnership style, so cooperatives are everyone's an owner. So they're kind of like a partnership style. Those operate anywhere between four, between four and ten to one. So just that alone kind of gives more of a equitable compensation scheme without even getting too advanced. So that there's plenty of there's lots of information on compensation schemes. And I just really that's one of my favorite topics when it comes to cooperatives and fairness and things like that. And I'm going to have a bunch of links later where you can see more papers and stuff on that. So now we're getting to ethics. So within both open source and cooperatives, the ethics have to, in my opinion, they have to do with you can kind of categorize them as a mitigation of exploitation. And exploitation is an interesting subject to try to have people define on one extreme. You could say something along the lines of exploitation is stealing or something like that, something illegal. Whereas on the other extreme, what you'll find is people say they'll kind of lean on consent and say, if you consented, there's no way that you got exploited. So even indentured servitude, which is a consent, people used to be able to say or people used to which is illegal now, be able to say within feudalism and so on and so forth. I will commit myself to you, pledge myself to you for five years and essentially be your slave. And that's consent, but yet. You know, it's to me, that's an exploitation. So if you were to. Um, talk about exploitation, what I think a good definition to try to do a middle road is exploitation happens when someone creates a product or service, but doesn't have any say in the surplus or profit of that product or service. So to make it simple, an example would be if you had, if you made, if you contributed to making a widget and let's just say your wages and everyone else's wages to create a widget was six dollars and the widget was sold for for ten dollars. That four dollars, that's the profit that it was sold for. That four dollars is the surplus. Right. If you don't have any say on that surplus, then that's an exploit. That's a definition of exploitation. That's one definition. But I would challenge is really important to think about a reason about. What exploitation is and if you if you don't use that definition. Right. So I find it to be ambiguous oftentimes. All right. So so talking about some of how some of the ways that open source tries to address exploitation. I actually think of what source mitigates exploitation because it's licensing insurers that the code is a non rival good. Right. A non rival good really means this, that no one is excluded when the good is consumed. Right. So you you use open source simply and it is obviously doesn't stop someone else from using it. Right. And that it's a small mitigation of exploitation as far as the contributors vote. So if your contributor open source and you you want to use your contributor to some software and you want to use that software, if it's open source, let's just say it's a dual licensing situation or whatever. You can you can go and at least use it in another scenario and say that you worked on it and so on and so forth and actually use it and it ends up working. Whereas, like say a closed source, you get exploited in some way. So as far as cooperatives, the cooperatives are kind of built for dealing with exploitation, they mitigate exploitation because of workers actually literally vote on how the surplus is used. Right. So all the owners get together and say, we sold the widget for ten dollars, it's a four dollar profit. We're going to say we're going to reinvest in the company or we're going to give everyone a raise, whatever. So that's kind of kind of the argument there. So all right. So some final thoughts. Right. Open source emerged originally from the desire to share ideas among early computer scientists and practitioners, but it did not inherently address exploitation of its contributors. We have kind of a bunch of different situations, dual licensing, open core, things like that, where the contributors, they don't get a say on where the surplus goes. Cooperatives emerged directly from the desire to address exploitation, but it didn't inherently share the recipes of any innovation that were developed by the non-members. Right. So cooperatives kind of aren't really nice when considering the external world inherently. Right. So while cooperatives and open source projects emerge to solve different problems, there's no reason to avoid the combination of these two structures and to address what we were saying earlier, this has been done in traditional ways, invoke the company that I'm a part of. We actually develop open source software. So that's one example, but a new form of cooperative called a platform cooperative exists where the software infrastructure is developed and shared among the members of the cooperative and then they provide services on top of that shared infrastructure. So it's open source. So anyone can use it, but the services are actually the part that's sold. And so let's see some examples of that. I want to say there's a company in Denver where they it's called the Green Taxi Cooperative and they're a platform cooperative. They develop software that's essentially similar to Uber, but it's open source and I guess anyone can develop or download, develop and create their own cooperative, a taxi cooperative, but the Green Taxi Cooperative actually uses it and then they sell the services on so on and so forth. So that would be a platform cooperative. So to answer, I think it was Angie's question. So to combine the combination in summary, the combination of decentralization, democratic governance, value of community, alternative compensation schemes and ethical priorities provides a unique position on how we could organize employment and goods together. Right. So cooperatives are really good at employment and exploitation, dealing with that and open source is really sensitive to how the goods are distributed. If you put those two together, it seems to be, in my opinion, a match made in heaven. Any questions? I think we've got three minutes or something like that. I see a couple here. Can you talk about the similarities between, let me publish this question. Can you talk about the similarities between differences between partnerships and worker cooperatives? So worker cooperatives really have two tiers. You have members and you have associates. Partnerships within law firms, they can have two tiers. They can have three tiers. You really don't find them where they have more than three tiers. That would be a major difference or a slight difference, actually. So, you know, a common misconception within, in my opinion, within cooperatives is that there's zero hierarchy. You're a communist or an anarchist or something like that. No, there can be, you know, if someone, if you're in the situation where it's a kind of equal to kill, someone brings on a project, there's a hierarchy there. Right. It's not completely flat. Right. There's, you know, someone brings in, if you're a law firm, you bring in the big two million dollar project, then, you know, and let's just say that that law firm only makes, you know, a million dollars a year and someone brings them two million dollar project. The person that brings it in gets to do what they want and they get to bring in who they want and work on what they want and they make it equitable. So there's a certain amount of fairness that comes in there. So there's some kind of hierarchy there. And then I want to say that a cooperative that runs as a service and services-oriented type firm, consultancy, that type, they end up having those types of situations, which I think is fair. You know, there's a difference between equitability, which is everyone's the same and I'm sorry, egalitarianism and where everyone's the same and equitability where it's someone brings in work and they kind of, they kind of, they're able to, since they took the risk and they did the front loading of getting this work, the marketing and all that sales, they get to decide who they bring on and and they get to have some more decisions, more power and decisions. So it's a flat hierarchy, but it's not completely flat. Let's see here. Let's publish this. Save this. Okay. Sometimes flat structures can still contribute to inequality, just more quietly think valve. Have you seen this in practice? Okay. I kind of tried to address that. So there's a difference between egalitarian and equitability, right? And so it depends on what I want to think that you're saying with inequality, someone contributed a whole lot and maybe you don't mean this, but someone contributed a whole lot and but then they got compensated just the same as everyone else. Equitability is a different and this is a whole different discussion, but it's called, if you're interested, it's called fair division within game theory and it's also called fair division within law, within state planning and things like that. That's probably where you want to look if you want to see some of the answers for this. Okay. Yeah. Flatness, just everyone being equal is the same. Okay. It's a follow up, meaning some ideas were valued less than others in conversation, even though everyone is equal. Okay. So I mean, yeah, I do see that that can happen. And it'd be interesting. I mean, it's, it seems like that's not necessarily a function of cooperative. So that seems like to be a social problem. In my opinion, though, that's an interesting question though. Let's do this. It's 502. So I think we're going over. If you all want to ask me some of these questions, join them. Do a Google search on the, or let me show some of these papers and you can go ahead and visit the Austin software cooperative, Google Austin software cooperatives and join that middle group and send me these questions directly. And I can probably answer those questions at that point. And thanks for joining.