THE BLOG COOPERATIVE

Blog Cooperatives are businesses jointly owned and operated by their members. BlogCoops are for-profit ventures that embrace emergent democracy as a means for governance and decision-making.

The purpose of this site is to generate discussion. In the entries below, I have posted my ideas, opinions, and questions about what a Blog Cooperative might look like, and how it might operate. Please join in the discussion. It is very likely that the resulting discussion will change many of my opinions below, and hopefully it will help answer many of the questions as well.

Join the discussion:

Replies	Last Reply at	Last Message
8	06/23/05 01:38 EDT	Graham: The co-operative busin...

A Cooperative is a type of business that has been around for some time. Searching the web, I have found a number of definitions, each of which is somewhat different. Essentially, a cooperative is a business that is owned by its members. Members of a cooperative usually own an equal share of the business, with an equal vote in the governance of its affairs.

Join the discussion:

Replies	Last Reply at	Last Message
6	08/24/03 22:26 EDT	doug powell: That's a great link Jo...

Blog Cooperatives don't have employees, in the traditional sense. There are no bosses, superiors, inferiors, or 'direct reports'. There is no hierarchical structure. There are no 'titles' or 'positions' or 'departments'. The organizational structure of a Blog Cooperative is fluid, appearing more like a diagram of the Internet than a traditional 'org chart'.

The above begs the question: how will the organization function? And can we even call it an organization at all, as it doesn't seem very organized?. I believe that Blog Cooperatives can function and organize themselves much more effectively than traditional organizations. The constantly changing structure of the Blog Coop enables it to adapt faster and restructure itself to respond to new business projects, opportunities, or crises. In order to achieve this, Blog Coops will need to find new ways to interact, make decisions, and cooperate in the performance of business functions. The entries that follow include a number of ideas and questions about how Blog Coops may be able to interact and conduct business. All of the ideas are concepts borrowed from elsewhere, that I think could be applied successfully to this kind of business.

Join the discussion:

Replies	Last Reply at	Last Message
3	09/07/03 20:19 EDT	Josef Davies-Coates: A blog coop has a <a h...

All members of a Blog Coop are equal. Each member has an equal share in the ownership of the company, in so much as share ownership has any real meaning (it may not). When it comes to decision-making, each member has a equal voice in every decision that the Coop makes.

Join the discussion:

Replies	Last Reply at	Last Message
2	09/07/03 20:40 EDT	Josef Davies-Coates: Liquid Democracy</a...

Since Blog Cooperatives have no defined structure or hierarchy, no 'management' or board of directors, there needs to be a well-defined process for making business decisions. And since every member has an equal voice, some type of voting system immediately comes to mind. I think that Blog Cooperatives should embrace the principles of Emergent Democracy for business decision-making and governance. (Click here to read the Emergent Democracy paper, mostly by Joi Ito)

As opposed to representative forms of democracy, in which members elect a 'representative' to vote on their behalf, members can vote directly on all of the issues (direct democracy). Web tools and technologies are making this approach a feasible alternative for business and political decision-making. Of course, in business, as well as government, some members may not be knowledgable in all aspects of every business decision. For example, a Customer Service expert may not have enough knowledge to make an informed decision (or vote) on a complex Engineering issue. In such an example, the case may be than only a few Engineering experts (a minority) fully understand the decision at hand. So if all members have an equal vote, and the majority of members don't understand the issue, there is a strong likelihood that the organization as a whole may make an uninformed decision (based on a majority vote, for example). This doesn't seem to be the most effective way to make decisions, does it? It is important, therefore, that any type of voting system take into such differences in expertise, while maintaining each member's equal voice and equal vote. One approach, that may be able to achieve this, is a related form of emergent democracy: Liquid Democracy.

Join the discussion:

Replies	Last Reply at	Last Message
1	07/16/03 14:39 EDT	Josef: I marvel at the prospe...

I first read about Liquid Democracy here. Similar to direct democracy, each member has a right to vote on every issue. However, each member also has the option to proxy their vote on a decision-by-decision or topic-by-topic basis. In this way, it seems similar to representative democracy, since you are allowing someone else to vote on your behalf. But there is a very important difference: that representation is temporary, and can be very narrowly defined. In traditional representative forms of government, representatives are elected for a period of several years, voting on your behalf on every issue within that governement's jurisdiction. To continue the example above, the Customer Service expert may decide to proxy her vote to one of the Engineering experts for this particular decision. However, she may choose not to proxy her vote in the same way for a subsequent decision. And she may choose to proxy her vote for a Sales-related decision to one of the organization's Sales experts. This liquid voting structure has three important aspects: 1) informed decision-making, 2) immediate accountability, and 3) maintenance of equal voting rights. If members choose to proxy their votes on decisions for which they are not experts, the effect is that the votes by members with expert knowledge with carry a heavier weight, which would lead to more-informed decisions. Because proxies can be taken away at a moment's notice, or given to someone else, there is immediate accountability. In a government example, if you don't like the way a representative votes on a particular bill, you might give your proxy to another representative on the next vote. Finally, this approach maintains each member's right to have a voice and vote on every issue, since proxies can be taken back at any time. Of course, this assumes that members of the Blog Cooperative are rational, having the best interest of the organization in mind, and that they will choose to abstain or proxy on decisions for which they do not have an informed opinion. But how do you know who to trust with your vote, on what areas of expertise? One of the most important elements to the operation of a Blog Cooperative will be an effective reputation system.

Join the discussion:

Replies	Last Reply at	Last Message
8	09/25/03 10:55 EDT	Pike Street: Definitely the issues ...

In organization with no departments, no leaders, and no position titles, a system is needed to help members assess each other's knowledge, expertise, and roles in the organization. I believe that an effective reputation system can meet these needs.

A reputation system is a system that measures a person's 'reputation' in way that can be viewed and assessed by those who have never actually met the person. An example of a successful reputation system is the eBay feedback system. The system is simple, and contains both a quantitative and qualitative element. The quantitative element is a positive, neutral, or negative (scored 1, 0, -1 respectively) rating for each transaction. The sum of a user's past ratings is representated as a score. The qualitative element is represented by comments made by other users. The scores and comments are available to all other users to view. So, without meeting the person, and without meeting someone who has met the person, you can make an assessment about the reputation of the person.

In a Blog Cooperative, the reputation system could be closely tied to the liquid democracy-based voting system. Several elements of the voting system could be used to measure the reputation of each member. Proxies can be used a measure of 'trust'. If a member is being entrusted with many proxies from other members, it demonstrates that other members trust that person to vote on their behalf. Viewing proxy total over time is also relevant to a member's reputation. A sudden decrease in proxies received might be indicative of a poor decision or a vote that other members did not agree with. Proxy totals are also a good measure of expertise level. When proxy totals are show on an expertise or 'category' level, the result is an expertise-based reputation level or score. This can show that some members have a good reputation with Engineering voting, a mediocre reputation in Marketing, and a low reputation in Customer Service. This reflects both reputation and area of expertise. A qualitative aspect of the repuation system could be the member's voting record, in a similar way that a politician's voting record forms part of their reputation. Voting records should be retained indefinitely, accessible to all members.

While voting-based aspects to the reputation system are important, other elements will be needed to form a comprehensive picture of member reputation. Another important area includes the completion of work and accomplishments. Like all businesses, some members will do more work than others, and some will have greater accomplishments and successes than others. Accordingly, the reputation system should take into account the work effort and accomplishments of members. One method for doing so, would be a peer review or rating system in which other members rate other members on their accomplishements. This could be time-based (weekly, monthly, etc.) or project-based.

Join the discussion:

Replies	Last Reply at	Last Message
0

Like most business issues, decision is preceeded by discussion and deliberation. When should a vote be called and who should call it? In an organization with no leaders, Blog Cooperatives will have to develop a set of rules that govern this process while allowing the business to make effective decisions.

Join the discussion:

Replies	Last Reply at	Last Message
2	09/21/03 17:19 EDT	Rick Johnson: In the 1062.org system...

In a voting-based decision-making system, what should constitute a 'decision'? Should decisions be based on majority or consensus votes, or something in between? Perhaps important decisions should require consensus, but who decides what is important. I am not sure what would be the most effective, but my best guess is a two-thirds (66.6%) majority. The main reason for this is that it might prevent the organization from becoming divided into two factions, which could occur if there was many 51-49 majority decisions. What are your thoughts? Join in the discussion...

Join the discussion:

Replies	Last Reply at	Last Message
6	03/02/04 16:51 EDT	Randy McLaughlin: Reverse the question. ...

In a system without stated salaries, there needs to be a system to determine how members get compensated and how profits get distributed. Although members have an equal ownership stake, this does not equate to an equal share of the profits. For any business to be successful, its members should be rewarded and compensated in proportion to their contributions and accomplishments. Some members may make a lot of money, while others may make little or none. In fact, one might predict, or even wager, that the compensation of members would follow a power law distribution. That may be case, but if the compensation structure is designed properly, I think it will be fair. Though the compensation structure may depend largely on the type of business, one approach is to base compensation on reputation.

The reputation system of the Blog Cooperative is a measurement of the collective opinions of the organization of the knowledge, expertise, and accomplishments of each member. Each member's reputation is formed and compiled from the votes and ratings of his or her peers. As such, it represents as reasonable system on which to base the distribution of profits. A challenge in this area results from the fact that the reputation system has both quantitative and qualitative elements, while money is very much a quantitative thing. There would need to be a be a way to represent each member's reputation as a percentage, which could then be used to calculate compensation.

Join the discussion:

Replies	Last Reply at	Last Message
4	09/14/03 10:11 EDT	Josef Davies-Coates: Shannon, I agree that ...

Another alternative compensation scheme is a voting-based approach. This may be suitable in cases where profits result from large projects or contracts, as compared to continuous, multi-transaction revenue streams. Upon completion of the project or contract, all members would cast votes regarding who should get paid and how much. Once approach would be for each member to assign 100 points amongst all members according to what percentage of compensation each member should receive. Points would then be tallied from all members and averaged, determining the percentage payout for each member. Of course, some checks and limits may be needed to keep the system feasible and fair. Potential examples include: members cannot vote for themselves, minimum and maximum number of members to vote for, per-member percentage maximums, and minimum reputation level to 'make it on the ballot'. To be fair, the system would have to be well designed so that voting cartels would not be able to form and distribute profits in an infair manner.

Join the discussion:

Replies	Last Reply at	Last Message
0

The question of organization size is important for a geographically-dispersed organization with no hierachy, departments, or leader. A Blog Cooperative with thousands of members is likely to be unmanageable. Since discussions and decisions will be made through online interaction, Blog Coops have many of characteristics of online communities. In "Communities, Audiences, and Scale", Clay Shirky demonstrates that there are human barriers that prevent communities from growing beyond a certain size: "This barrier to the growth of a single community is caused by the collision of social limits with the math of large groups: As group size grows, the number of connections required between people in the group exceeds human capacity to make or keep track of them all." In Blog Cooperatives, members need be able to assess reputation and divide reponsibilities easily. So what should the limit be for membership? I don't know the answer to that, but my best guess is between 100-150.

Join the discussion:

Replies	Last Reply at	Last Message
1	07/16/03 16:08 EDT	Josef Hasslberger: Adapting blog cooperat...

How should members be selected? Should membership be open to all, up to a pre-decided membership limit? What barriers to entry should exist, if any? For a organization without leaders, I think there are limited choices in the early stages of a Blog Coop. Though all members are equal, it is reasonable to assume that Blog Coops will have one or more founders (Blog Coops won't spontaneously come into existance). Being a 'founder' does not impart any special power or rights, however, and I don't think the process should be started with founders acting as 'hiring managers'. Rather, the founders should have a high-level idea about the type and scope of business. People with experience are invited to join. So membership is open to anyone, but with a "qualified people only"-type of honor system. Once members join and begin to interact, the reputation system kicks in, and members begin to build a reputation in the group. Over time, the organization may choose to review certain memberships, and some members may be voted out for a number of reasons.

Join the discussion:

Replies	Last Reply at	Last Message
4	09/08/03 14:04 EDT	Mark Carey: I like that idea too, ...

Should the operation of a Blog Cooperative be conducted in a public online space, or should it occur in a member-restricted area? While much of the business discussions and operations can take place publicly, there will likely be a need for some to remain private, due to confidential client information or other reasons. Ideally, the software tools would be flexible enought to support both public and private spaces.

Join the discussion:

Replies	Last Reply at	Last Message
1	09/07/03 21:45 EDT	Josef Davies-Coates: Most stuff should be c...

Discussion tools will be one of the key spaces in which Blog Cooperatives will conduct business. Useful discussion tools would include discussion forums, chat rooms, and audio-conferencing capabilities. Discussion is any medium should be archived and categorized for easy search and recall. Discussion tools should provide easy access to member reputation information.

Join the discussion:

Replies	Last Reply at	Last Message
1	09/14/03 11:31 EDT	Josef Davies-Coates: The best way to acheiv...

To facilitate the actual work of the Blog Cooperative, collaboration tools are needed to enable members to share and collaborate on files, documents, etc. Key features include document sharing, file repositories, and collaborative document editing.

Join the discussion:

Replies	Last Reply at	Last Message
1	07/24/03 08:42 EDT	Zbigniew Lukasiak: Just a link to a list ...

Tools would needed to record the votes and decisions of the members and the organization. This could take a tradional poll or survey format. Alternatively, a link-based voting system could be used. Members could indicate their vote by placing a link on their profile page (or blog). The voting system would need to record and aggregate votes and archive past votes and results.

Join the discussion:

Replies	Last Reply at	Last Message
1	09/11/03 17:26 EDT	Rick Johnson: [ http://www.1062.org/...

As mentioned previously, the reputation system would be one of the key software components of the operation of a Blog Cooperative. Ideally, the reputation system runs without much member intervention - it records votes and ratings and other aspects of a member's actions within the cooperative. All reputation information would be archived and made available for any member to view at any time. Reputation data should be able to be filtered by time period and category/expertise area.

Join the discussion:

Replies	Last Reply at	Last Message
0

Depending on the nature of the business, the cooperative may or may not require start-up capital. In either case, the founders may choose to set a membership fee, payable by all members (including the founders). If for no other reason, the fee can act as barrier to entry, improving the probability that only serious individuals will join. The fee should be equal for all members. Payment of membership fees should not grant members any right to future profits of the business -- that is to say that there should be no silent partners. Profits should be distributed based on reputation and contribution to cooperative, not based on the payment of fees or investment. The implication of this approach is that members will pay the membership fee with the full knowledge that they will not receive any share of profits unless they participate and contribute to the operations of the business - nobody gets a free ride. This further ensures that members will have serious intentions when joining.

Join the discussion:

Replies	Last Reply at	Last Message
6	09/14/03 11:18 EDT	Josef Davies-Coates: Blog Coops should, I t...

Being an online business entity, it makes sense to use online services such as PayPal to conduct financial transactions, wherever possible. Of course, the nature of business will have a major bearing on the financial infrastructure, depending on the size and frequency of financial transactions.

Join the discussion:

Replies	Last Reply at	Last Message
0

Perhaps a PayPal account could be established to act as the bank account of the Blog Cooperative. This raises some important questions. Whose name(s) should the account be in? What controls should be put in place to ensure that those with bank account access act responsibly? This also leads to a number of legal questions. For an international business with no offices, in what country should the company be registered (if any)? Should the Blog Cooperative be considered a 'company' at all? After all, it's just a group of individuals collaborating to provide products or services to others, right?

Join the discussion:

Replies	Last Reply at	Last Message
0

In my opinion, most companies don't do enough to contribute to charitable causes. If a company is making a profit, I think it should give a small percentage of those profits to charity. I won't get into the math, but if every major company in the world gave 10% of profits to charity, think of the huge impact that it could have. There is nothing specific about the Blog Cooperative model that lends itself to this practice (all companies can do it), but I propose that Blog Coops set an example and embrace this practice.

Join the discussion:

Replies	Last Reply at	Last Message
1	09/08/03 14:01 EDT	Josef Davies-Coates: Rather than giving mon...

Some types of business may be better to suited to the Blog Cooperative structure than others. Professional services is one area that seems well-suited to the model. Professional services encompasses a wide range of services, inlcuding consulting, advertising, web design, etc. Services are well suited to the Blog Coop model because the need for start-up capital is low, and because the product itself is the advice or services of its members.

Join the discussion:

Replies	Last Reply at	Last Message
0

The Blog Coop model may also be well-suited to collaborative software development. Instead of open-source, call it cooperative-source software.

Join the discussion:

Replies	Last Reply at	Last Message
0

Other types of businesses may also work well within the Blog Coop model. Join the discussion for this entry to suggest other business types.

Join the discussion:

Replies	Last Reply at	Last Message
0

At this point, you may be asking: what does this have to do with blogs or bloggers? The answer is that it has nothing directly to do with blogs. This form of business could be started by any group of online individuals. That said, I think that members of the blog community are well suited to the Blog Cooperative approach. Bloggers have a good understanding of how the web can be a platform for opinion and conversation. Communicating, interacting, and collaborating with others using social software over the web is not new to most bloggers. Much of this interaction is between people who have never met in person, often seperated by oceans and borders. Finally, I think that blogging has given many a taste of a better way of doing business. A way in which the voice of individual is valued, a way that doesn't include hierarchy and bureaucracy, a way that rewards individuals for their accomplishments and contributions. I think bloggers are ready to participate in this experiment.

Join the discussion:

Replies	Last Reply at	Last Message
0

In some ways, the first Blog Cooperatives will be experiments. To my knowledge, there isn't any business that is modeled in a similar way. Like any experiment, sometimes you have to do substantial tweaking to get things to work. For Blog Cooperatives, experimenting with various social software tools and systems for measuring reputation will be necessary and important. The discussion, deliberation, and voting processes may also require experimentation. I strongly believe that this business model can work. It may take some experimenting to find the best tools, processes, and practices, but I think that like-minded individuals can come together to conduct business as individuals with an equal voice.

Join the discussion:

Replies	Last Reply at	Last Message
0

The purpose of this site is to initiate discussion about the Blog Cooperative model. I hope it generates much discussion and ideas. I also hope that it spurs action. Towards that end, I would like to propose the first Blog Cooperative, a consulting venture aimed at helping companies manage their web presence. Areas of focus may include helping companies start conversations with their customers, speaking with their own voices (perhaps in blog format). If this sounds familiar to you, it's likely because this idea, as well one of my blogs, is inspired by Cluetrain. Most company web sites are impersonal, and read like print ads with hyperlinks. There is usually no way to engage in conversation with companies' principals or employees. This blog cooperative venture can help companies create conversational web sites that create real relationships with customers and prospects. If you are interested in joining such a venture -- and ready to do some experiementing with the blog coop model -- join in the discussion for this entry and let's make something happen!

Join the discussion:

Replies	Last Reply at	Last Message
8	09/14/03 10:35 EDT	Josef Davies-Coates: Personally, I don't th...