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Co-ops — What the Heck Are They?

While some people may be familiar with some forms of co-ops, we’ve had a lot of questions. So this post will break down co-ops, and specifically platform co-ops.



Corporations vs Co-ops


The main difference between traditional corporations and co-ops is ownership. Corporations are owned by their shareholders, co-ops are owned by their members. This affects two main areas: Decision-making (governance) & profits (economics).

Decision-making

Traditional corporations are owned by shareholders. Shareholders could be the founders of the company, investors in the company, or the general public, if the company has ‘gone public’ through an IPO. So while the public can own a piece of traditional companies, their vote and say in matters are relative to how many shares of the company they own, which is usually minuscule compared to investor shares. That’s where you hear the term “majority shareholder,” meaning one person owns over 50% of the company, so their voice is the most powerful.


A cooperative (or co-op) is an organization democratically owned by its members, where each member has an equal vote (one member=one vote). Translation: votes are based on people, not money. This levels the playing field and makes sure all voices are heard and valued equally — no one is more important than the next.


Profits

In a traditional corporation, potential for financial gain is based on ownership. If you own more shares, you’ll be more profitable. If Sally owns 60% of a company, Barry owns 30% and Jean owns 10%, then Sally is entitled to 60% of the company’s value (if bought out or goes public), Barry 30% and Jean 10%. The more you own, the more you have a say in the company, the more you could profit.


But this puts the proverbial “little guy” at the bottom. Again.


In a co-op, how much you can profit is not based on ownership, since that is equal. Co-ops separate governance from economics. All owners have an equal vote, but their piece of the profit pie is relative to their contribution to the co-op.


So if Sally, Barry, and Jean all pay the same membership fee to join the co-op, they all have an equal vote. But if Sally contributes a little, Barry contributes a good amount, and Jean contributes a lot, they will earn profits in the form of dividends relative to their contribution: Sally=$, Barry=$$, Jean=$$$.


Platform Co-ops

Platform cooperativism is relatively new, a term coined by Trebor Scholz in 2014 and began to gain steam after he and Nathan Schneider hosted the 2015 event, “Platform Cooperativism. The Internet. Ownership. Democracy.”


Platform co-ops take the concept of a co-op, and apply it to tech platforms. Tech platforms are things like Facebook, Twitter, Uber, and Airbnb. These platforms rely on their users to make them successful. They are successful because of something called “network effects”, meaning if all your friends are on Facebook and not on some new ‘Facebook-Like Platform’, you probably don’t want to go join ‘Facebook-Like Platform’ because you’d be the only one. Very lonely.


That’s how these platforms get to be so powerful, yet it drives home that they are powerful because of the people.


And these platforms make lots of money off of the data collected from users of the platform (Facebook using it for advertisements, Uber using it to develop self-driving cars) — so why don’t the platform users get a cut?


Enter the platform co-op

What platform co-ops are about, is making those people who use the platform the owners. It’s a way of recognizing that platforms don’t exist without its users, and they should have a say in the product they help keep afloat, and share in the profits they help generate.


Savvy Cooperative — the first ever patient co-op.

That’s what we plan to do at Savvy Cooperative. We are restoring power back to the people in the healthcare system who have for too long been powerless to the system we’ve imposed on them.


At Savvy, healthcare consumers, patients, and loved ones can become owners of Savvy, giving them each an equal vote, and allowing them to share in the profits relative to their contribution.


To read more about this, check back for our follow-up post on how Savvy will specifically work!

In the meantime, please check us out at http://savvy.coop, and “Join Us” to become part of the Savvy Crowd and restore power back to healthcare consumers — Power to the Patients!

Please follow us:


Twitter: twitter.com/savvy_coop

Instagram: instagram.com/savvy_coop

Facebook: facebook.com/savvycoop


Originally posted on medium.com, July 1, 2017

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