The majority of online services that have transformed society since the beginning commercial use of the Internet started over 20 years ago, received startup funding through venture capital. From transportation apps and online marketplaces to dating and food delivery platforms — an entire sector has emerged largely through private funding. These platforms and services have made life more convenient and provided easier access to gigs. On the other hand, the explicit goal of venture capital-funded startups is to maximize short-term profits for shareholders. The public good is often left behind. Any startup entrepreneur working with VC money will have to follow the logic of this business model and eventually extract value from the users of the service. With VC money, start-ups must maximize profits and eliminate competition in their chosen sector. If they fail to deliver after a few months, investors take control of the startup.
Platform co-ops offer a different pathway for tech startup founders. This model should be an option for all participants in tech incubators or accelerators.
By launching a platform co-op, you can access member capital and most importantly doesn’t lose control of the business even when you are not creating an immediate return. In other words, the platform co-op model allows tech entrepreneurs to build sustainable businesses that create long-term value. Founders are free to incorporate the social good or other cultural and social objectives directly into their business models.
Running a platform cooperative means that the members of the co-ops own the platform, which gives them sovereignty over the code. Members therefore have more control over the privacy of the users and transparency over what happens to data on that platform.
By organizing as a worker co-op, tech workers can create democratic businesses that they own and operate. The co-op is free to determine how it wants to define its membership: it can be comprised solely of workers, or also include some consumers or producers, and even community members or other stakeholders. Each owner has a share and a vote in the co-op — that means that they can jointly decide which projects they want to take on.
By turning to the cooperative model for digital businesses and projects, we can give users, workers, and owners sovereignty over their digital assets.
Who Else Benefits from Platform Co-ops