Owning Together Is the New Sharing
This article originally appeared at .
One chilly morning last winter, I reconnected with an old friend, Joel Dietz, on a video chat. We hadn鈥檛 seen each other for years, and we鈥檇 each had several starts and stops in our lives since. He began telling me about his latest undertaking, Evergreen, a digital currency system that he described as 鈥渙rganic鈥 and 鈥渨ithout additives.鈥 I was doing all I could to understand it, and he was struggling to fund it in a way that suited his vision. He needed money, and quickly, but he didn鈥檛 want to sabotage his ideals in the process.
People who want an economy of genuine sharing are coming to recognize that they must embrace ownership.
鈥淚鈥檓 working to find a steady economic base,鈥 he said. 鈥淚 don鈥檛 really want to put it into the hands of the VCs.鈥 Venture capitalists, that is鈥攖he go-to source of quick and easy money for clever tech entrepreneurs like him. He鈥檇 get cash, but they鈥檇 get the reins. 鈥淚鈥檝e considered this before, but it always leaves me feeling a bit dirty.鈥
A few months passed, and we traded emails about our various projects鈥攊ncluding some dead ends. By mid-May, though, he鈥檇 alighted on something new, something that seemed to address the problem that had been burdening him before. I was skeptical. He was soon writing to me from the of his new company, , the world鈥檚 first experiment in what he was calling 鈥渃ryptoequity.鈥
Swarm would be a crowdfunding platform, using its own virtual currency rather than dollars; rather than just a thank-you or a kickback, it would reward backers with a genuine stake in the projects they support. Entrepreneurs could sidestep the VCs by turning to a 鈥渟warm鈥 of small investors鈥攁nd maybe supplant the entire VC system. By the end of the summer, he鈥檇 raised more than a million dollars in cryptocurrency. The legality of the model is uncertain, but the feds haven鈥檛 come knocking yet.
Dietz is part of a subtle insurgency taking place, one of bylaws, financing schemes, and ownership structures. The details can seem abstruse, but the craving is everywhere. High hopes for a liberating Internet have devolved into the dominance of a few mega-companies and the NSA鈥檚 watchful algorithms. Platforms entice users to draw their communities into an apparently free and open commons, only to gradually enclose it by tweaking terms of service, , or charging fees for essential features. Thanks to users鈥 of friending and posting, tech companies can employ far fewer people, and extract more profit per employee, than businesses in other industries. Fiduciary responsibility to their investors requires that they turn on the people who made them successful.
Those people are turning on them back. Oculus Rift raised $2.4 million from fans on Kickstarter, then by selling to Facebook for $2 billion. Users frustrated with an increasingly ad-friendly Facebook started flocking to Ello (whose 鈥溾 eschews advertising and selling user data) and Tsu (which for their contributions)鈥攂ut when Ello took venture capital, . Reddit鈥檚 finicky users have succeeded in preventing the company from turning profitable with intrusive ads or selling data; it鈥檚 now in the process of setting up a Swarm-like digital currency scheme to .
The line between workers and customers has never been so blurry. Online platforms depend on their users, and pressure is mounting all over the Internet. People are tired of seeing their communities treated like commodities, and they鈥檙e looking for ways to build platforms of their own.
Sharing was the new owning
VC-backed sharing economy companies like Airbnb and Uber have caused trouble for legacy industries, but gone is the illusion that they are doing it with actual sharing. Their main contribution to society has been facilitating new kinds of transactions鈥攆or a fee, of course, to pay back to their investors. 鈥淭he sharing economy has become the on-demand economy,鈥 laments , co-founder of the Paris-based network , which connects sharing-economy entrepreneurs around the world.
Once the VC-backed sharing companies clear regulatory hurdles, local co-ops will be poised to swoop in and spread the wealth.
The notion that sharing would do away with the need for owning has been one of the . We could share cars, houses, and labor, trusting in the platforms to provide. But it鈥檚 becoming clear that ownership matters as much as ever. Whoever owns the platforms that help us share decides who accumulates wealth from them, and how. Rather than giving up on ownership, people are looking for a different way of practicing it. OuiShare, for instance, is starting to prioritize supporting new projects that bake new models of ownership鈥攖hat is, real sharing鈥攄eep into their business model.
L茅onard and his collaborators are part of a widespread effort to make new kinds of ownership the new norm. There are cooperatives, networks of freelancers, cryptocurrencies, and countless hacks in between. Plans are being made for a, , and Amazon Mechanical Turk workers are scheming to build a crowdsourcing platform they can run themselves. Each idea has its prospects and shortcomings, but together they aspire toward an economy, and an Internet, that is more fully ours.
鈥淪ociety needs a new narrative about the world,鈥 L茅onard thinks, 鈥渁nd that narrative has to be different from the one Uber is offering.鈥
One kind of narrative is that a more collaborative, less unequal future will happen almost by itself. Jeremy Rifkin, a futurist to CEOs and governments, contends that the Internet-of-things and 3-D printers are ushering in a 鈥 鈥 in which the 鈥渃ollaborative commons鈥 will be more competitive than extractive corporations. Investor Brad Burnham of Union Square Ventures that a new crop of grassroots 鈥渟kinny platforms鈥 will spell trouble for behemoths like Uber. Sharing economy expert Arun Sundararajan expects that once the VC-backed sharing companies clear away regulatory hurdles, will be poised to swoop in and spread the wealth.
These stories are certainly possible, even plausible. But they鈥檙e also a bit like expecting Amazon to usher in a renaissance of local bookstores; big companies seeking big profits for the investors who own them tend to get their way in this economy. People are recognizing that doing business differently will require changing who gets to own what.
鈥淲e鈥檙e moving into a new economic age,鈥 says , who spent two decades at the helm of Business Ethics magazine and now advises social entrepreneurs. 鈥淚t needs to be sustainable. It needs to be inclusive. And the foundation of what defines an economic age is its form of ownership.鈥
Cooperative intelligence
When the Occupy movement spread to Wellington, New Zealand, in 2011, Ben Knight says, 鈥淚t seemed like the perfect social movement.鈥 Before that, he had been studying cognitive science, working with primates to understand the evolution of group learning鈥攁nd he saw group learning take place in the movement鈥檚 consensus-based assemblies. 鈥淚t was the collective intelligence angle that got me really, really interested in the beginning,鈥 he recalls.
Soon, Knight went from the perfect movement to the perfect tech company. He and fellow Occupiers took the best of what they鈥檇 seen in Occupy鈥檚 kind of direct democracy and made it available to the world in the form of an app鈥. And they built their organization to reflect Occupy values as thoroughly as they could: It鈥檚 a worker-owned cooperative that produces open-source software to help people practice consensus鈥攖hough they prefer the term 鈥渃ollaboration鈥濃攁bout decisions that affect their lives. Only after Loomio incorporated did its team notice that it was the only worker-owned cooperative registered in New Zealand.
They were not, however, working in a vacuum. From the start Loomio was part of , an 鈥溾 of and social enterprises devoted to mutual support and the common good. Through Enspiral, its team had a place to work, an Internet connection, and a receptive community. Before long, Enspiral was using Loomio to make decisions collaboratively, and members began building a companion tool, , to help them allocate resources together. Loomio is now being used by governments, organizations, and schools; a significant portion of the current usage comes from Spain鈥檚 ascendant political party, . Still, Loomio鈥檚 ideals have kept its revenue flowing slowly. The team members recently had to come to terms with the fact that, for the time being, only some of them could be paid for full-time work They called the process 鈥減articipatory downsizing.鈥
The resurgent co-op model
The worker cooperative is that鈥檚 attracting new interest among the swelling masses鈥攜outhful and idealistic, but with dwindling chances of finding an old-fashioned job. Co-ops help ensure that the people who contribute to and depend on an enterprise keep control and keep profits, so they鈥檙e a possible remedy for worsening economic inequality. And they can take many forms. Loomio and other tech companies, for instance, are aspiring toward the model of a 鈥攐ne in which not just workers or consumers are voting members, but several such groups at once. It鈥檚 the ideal model for an Internet that doesn鈥檛 draw clear lines between employees and users. But it鈥檚 easier said than done.
is a San Francisco-based startup designed, like TaskRabbit, to manage short-term freelance jobs; but unlike TaskRabbit, administrators and freelancers alike will be members with equal voting rights. The is advising the project, and others like it, on the strategy and the paperwork. As prepares to begin operations this winter, it鈥檚 running out of the pocket of the founder, Josh Danielson鈥攁 far cry from the millions that TaskRabbit raised from investors in its early years.
The ambition of a cooperative Facebook or Uber鈥攃ompetitive, widespread, and owned by its community鈥攕till seems out of reach for enterprises not willing to sell large parts of themselves to investors. Organizations like and the have been developing models of financing suited for co-ops, but they鈥檝e tended to focus on local or industrial businesses, not so much the lean-and-leveraged strategy of a tech startup. A cooperative tech economy might require very different ways of operating.
People have been trying, to build alternatives to concentrated wealth and ownership for a long time.
鈥淲hen you talk about cooperatives with entrepreneurs, they鈥檙e super afraid,鈥 says Antonin L茅onard. 鈥淭hey鈥檙e like, 鈥楢re you crazy, man? Cooperatives in the digital age just don鈥檛 work.鈥欌 His fellow OuiShare founder is concerned that too much fixation on a particular model will make it hard for well-meaning ventures to be successful. 鈥淚 like the idea that we don鈥檛 need to have a specific legal status,鈥 he says. 鈥淚t鈥檚 more about hacking an existing legal status and making these hacks work.鈥
No blueprint
Few have been so successful at turning hacking into sharing as Casey Fenton. In 2003, he founded , one of the original sharing economy platforms, which built relationships around the world by connecting travelers, free of charge, with the spare couches of trustworthy strangers. But the community-driven heyday didn鈥檛 last. After the IRS failed to recognize CouchSurfing鈥檚 activities as charitable, it transitioned from a non-profit to a for-profit in 2011. In that form, it raised millions in venture capital, but saw a precipitous decline in vibrancy. Much of the once-loyal user base turned against the company.
Fenton鈥檚 new undertaking, , proposes to 鈥渃reate innovative solutions to accelerate social change,鈥 much as CouchSurfing did, but it鈥檚 doing the innovating cautiously. All work is done by worker-owners located around the world. Sovolve uses an internal platform鈥攕oon to become a product in its own right鈥攖hrough which contributors decide how much they want to be paid in cash and how much in equity. They can see how much others are earning. Their virtual workplace is gamified, with everyone working to nudge their first product, , into virality. In the process, they鈥檝e invested more than $1 million worth of unpaid work鈥$1 million less that Fenton needs to seek from traditional investors.
鈥淚 think we鈥檙e finally coming to the point where we have complex enough tools that we can start to do this stuff,鈥 he told me over lunch and a can of Rockstar鈥斺渃omplex enough legal instruments and complex enough software.鈥
Loomio鈥檚 members use a similar system, which they call Loomio Points. But Sovolve is no cooperative; contributors are not in charge. 鈥淚 wanted to give more people ownership to create more alignment,鈥 Fenton says. 鈥淏ut we don鈥檛 want to have a whole bunch of people making decisions every day. I鈥檝e tried to do that. That鈥檚 like some kind of democracy.鈥
Governments already subsidize business as usual. They need to be pressured to encourage more just alternatives instead.
It鈥檚 also like . For the past four years, Tiberius Brastaviceanu has been trying to build a truly open-source business model from a shared lab in Montreal. He was troubled that many leading open-source projects, like WordPress and Arudino, rely on unpaid labor and are managed by a closed, traditional company. As it designs and builds high-end scientific equipment, Sensorica is an experiment in another approach. 鈥淵ou have to break the walls down and create a more permeable membrane,鈥 Brastaviceanu says. But doing so is no easy hack. 鈥淭here鈥檚 no blueprint for the kind of organization we鈥檙e trying to build.鈥
Open-source software and share-alike licenses have revived the ancient idea of the commons for an Internet age. But the 鈥 鈥 that Sensorica seeks to practice doesn鈥檛 arise overnight. Just as today鈥檚 business culture rests on generations of accumulated law, habit, and training, learning to manage a commons successfully takes time.
Like Sovolve, Sensorica pays workers for their contributions to the product. Unlike Sovolve, they participate in the company democratically. Everything from to is out in the open, wiki-style, for insiders and outsiders alike to see. The whole company, not just the product, is open source鈥攕haring not just code but profits. Progress has been slow, though. Only one device has been sold, and the 3-D modeling and printing business barely supports one person. At the same time, Brastaviceanu is getting more and more calls from people interested in adapting the model Sensorica has pioneered. He believes a change along these lines is coming. 鈥淚t鈥檚 inevitable,鈥 he says.
If this is true, one reason may be Bitcoin. It is becoming increasingly clear that the technology underlying the digital currency鈥攁 secure network that doesn鈥檛 rely on any central server or authority鈥攊s good for a lot more than currency. It makes possible , or DAOs, which exist entirely on a shared network. While a conventional corporation, for instance, exists because of documents held by the corporation itself and a government, the code that defines a DAO is shared across the network. On this kind of open-source platform, an organization like Sensorica actually starts to seem more sensible than closed-source alternatives.
The most ambitious successor to Bitcoin, , has raised more than $15 million in crowdfunding on the promise of creating such a network. With it, proposals have been made to develop decentralized social networks, Airbnb-like rental services, Dropbox-like file-sharing systems鈥攅ven an entirely new Internet鈥攁ll with technology that makes collective ownership a lot easier than a conventional legal structure. A project called is developing a collective decision-making tool designed to govern DAOs on Ethereum, though the platform may still be months from release.
鈥淭he foundation of what defines an economic age is its form of ownership.鈥
For now, the burden of reinventing every wheel at once makes it hard for companies like Sensorica and Loomio to compete. In tech culture鈥檚 rush for making all things new, it may be overlooking older approaches to the challenges of community ownership and financing. People have been trying, after all, to build alternatives to concentrated wealth and ownership for a long time. For instance, specializes in helping companies raise money through a long-standing mechanism called the direct public investment, or DPO, which allows for small, non-accredited investors.
It involves neither Swarm鈥檚 Bitcoin-like technology, nor the murky new crowdfunding investment provisions in the 2012 JOBS Act that . Cutting Edge Capital is trying to bring the DPO into the digital age with , but few of Cutting Edge Capital鈥檚 clients have been tech companies. Part of the problem may be that DPOs require state-by-state registration, which makes it hard to cast a wide net for funders. CEO Jenny Kassan suspects it is also partly a matter of culture鈥攊n many people鈥檚 minds, tech culture is synonymous with fast-and-furious venture capital.
鈥淓veryone knows that the model is broken,鈥 she says, 鈥渂ut it still has this prestige factor.鈥 And, for the moment, easy money is hard to beat.
Where the money is
Swarm has competition. During its early months, when Joel Dietz was first trying to get his idea off the ground, he talked with a lot of people about it. Many of them liked it. Some of them liked it so much that they found investors, and persuaded them to like it, and to finance . Venture funding may be in competition with Dietz鈥檚 cryptoequity vision, but it provides a fearsome head start.
For those hoping to mend the inequality of the existing economy, Swarm鈥檚 competition makes it hard not to notice the inequalities built into the models vying to disrupt the status quo. Bitcoin鈥檚 micro-economy holds the dubious distinction of being than the global economy as a whole. On a sharing platform, who owns, and who just rents? In an economy of cooperatives, who gets to be a member, and who gets left out? And in a workplace like Sovolve built on sweat equity, some people can afford to work for less cash upfront than others; those who have some already will be poised to end up with a lot more than those with less.
Devita Davison, co-director of , a network of local food entrepreneurs, finds that new kinds of sharing economies can be hard to embrace for those living in poverty. 鈥淧eople who have been without for a long time,鈥 she says, 鈥渙ften operate with a mindset that they can鈥檛 share what they have, because they don鈥檛 know when that resource will come along again.鈥
Sooner or later, transforming a system of gross inequality and concentrated wealth will require more than isolated experiments at the fringes鈥攊t will require capturing that wealth and redirecting its flows. This recognition has been built into some of the most significant efforts under the banner of the so-called 鈥渘ew economy鈥 movement. They鈥檙e often offline, but that makes them no less innovative.
Co-ops help ensure that the people who contribute to and depend on an enterprise keep control and keep profits.
Building on the model of the in Cleveland, the helps seed new cooperative enterprises by connecting them to large in their communities; hospitals and universities with deep pockets can help a new enterprise become viable much more quickly than it can on its own. In France, OuiShare supports new collaborative business models through partnerships with its own set of anchor institutions鈥攊ncluding MAIF, an 80-year-old mutual insurance company, and the public train operator SNCF. A less consensual strategy was employed to fund the in Spain; over the course of a few years, around $600,000 from Spanish banks without paying any of it back.
Government is an important source of support, too. Perhaps more than some go-it-aloners in tech culture might like to admit, a new economy will need to level the playing field between traditional corporations and collaborative enterprises. In Jackson, Mississippi, was elected mayor in 2013 on a platform of fostering worker-owned cooperatives, although much of the momentum was lost when Lumumba died just a few months later. This year in , for the first time, co-op advocates secured public funds to support training programs that will help the sector grow鈥攁nd . Governments already subsidize business as usual, and they need to be pressured to encourage more just alternatives instead.
This is not the first time people have longed to replace owning with sharing, to forgo property through community. In the Middle Ages, say: The early followers Francis of Assisi at first sought to do away with property altogether, to . It may be an ambition worth pursuing. But to ensure their autonomy, and to protect their growing movement in the feudal world in which they lived, the Franciscans ended up having to hold communal property, though they managed it very differently than the neighboring lords did.
There are many ways to own. Simply giving up on ownership, however, will mean that those who actually do own the tools that we rely on to share will control them. People who want an economy of genuine sharing are coming to recognize that they must embrace ownership鈥攁nd, as they do, they鈥檙e changing what owning means altogether.
Nathan Schneider
is a journalist and assistant professor of media studies at the University of Colorado at Boulder. He is a YES! contributing editor, an editor of the online literary magazine Killing the Buddha, and the author of three books, including Everything for Everyone: The Radical Tradition that Is Shaping the Next Economy.
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