Cooperative Financing

This is where the mic is. There's nothing I can do about this. Let me try this one.

This one.

Hi.

My name's Esteban Kelly, and I feel like I should be sitting dutifully. Maybe I'll just sit in order for this to work. How's it going? We're here to talk about cooperative financing. And what we're going to do in terms of format is just go one at a time. So instead of introducing everyone all at once, and that way you'll be like, oh yeah, wait, what, which thing are you from again? So it'll be clearer, all the affiliations and such. We will then have a little, one way I like to do this is have a little moment for the panelists to sort of riff off of one another. If there's questions, disagreements, ideas that build. So we'll do like a little bit of an internal panel discussion for, briefly, just like 10 minutes, and then we'll just open it wide open for everyone, okay? When we do that, I'd prefer if we could take like 2 or 3 questions at a time, and then the panelists will just kind of answer, and then we'll take the next batch of questions. I will remind you of those instructions before it happens, because I know that people, especially people who were partying late last night, some of you are in the room, don't retain all that information all the time. I'm not reading a fancy bio for me. That's the thing that happens when you moderate is that no one is there to introduce you. But I will just say that one of the things that I do and probably why I'm moderating this panel is that I'm the co-executive director for the US Federation of Worker Co-ops. And I'm gonna leave it at that. So our first person, Shifting, keeping you on your toes, keeping you, me, on my toes so that you are awake. Our first person is Brendan Martin. And Brendan is the founder and director of The Working World. And he's gonna tell you a little bit more about that, but it's essentially a cooperative financial institution and business incubator that is based in Argentina and Nicaragua, and now in the United States as well. Brendan originally moved to Argentina in 2004. To work with a group of Argentines looking to support the Recovery Factory phenomenon. And out of this, The Working World was born as a financial institution using its methods of non-extractive finance and just-in-time evergreen credit. Despite dire predictions of investing in the chaotic groundswell that was the Recovered Factory movement, The Working World achieved a 98% return rate across over 715 loans, and they're all— oh, all with repayments only from profit sharing and without guarantees. This experience demonstrated both that grassroots cooperative movements can be economically viable and that finance can be non-extractive and subservient to people, yet still be solvent. After this success, Brendan helped open a second branch in Nicaragua in 2009 and another in the US in 2012. The same grassroots cooperative efforts have been proven effective and provocative in the context of the US, where the working world has already funded 6 cooperatives, including New Era Windows, which is the manufacturing cooperative that emerged from the infamous Republic Windows and Doors situation in Chicago. So Brendan, essentially, you're going to— you probably have a whole thing queued up and ready to go. But I'm curious what your vision is for a US-based cooperative finance sector that's community-owned and scalable and local and knowable. So can you talk about, in your comments, in the time you have, can you talk about the strategic infrastructure that you see as requisite for achieving these values while spanning our country?

Okay, you mean when I speak?

Yeah, just like weave it in.

Weave it, okay.

It's there, I heard.

Brendan Martin.

I'll just add a couple slides.

Brendan Martin, this is where you— By the way— It's like it's your first panel or something.

Jeez Louise.

It's Stéphane Kelly, give it up! Now, now.

Uh, you can take 12 if you want. I'm feeling generous.

Okay, so the microphone situation here is kind of screwy. Yeah, I can kind of hide in the corner, or I can sit and not see what I'm doing, or I can try to yell, which usually works for me. There may or may not have been a colleague's birthday last night, and I may or may not have lost my voice. Hey, I kind of like that. Does this work?

Yeah.

Okay, but then they can see my notes. All right, I'm going to go here. So, all right, as Stéphane said, I'm going to be presenting about financing and— yeah, it'll work. Getting the feedback. I'll try to use this one. But then I can't click. Okay, so we're going to be presenting the working world., and something called the Madeline System Platform, which is towards a financial commons. And I'm gonna start off with the premise that—

Advance your slides.

No, I'm cool, I'll grab 'em, thank you. I'll start out with the premise that, yeah, good. I'll start with the premise that platforms and cooperatives are not actually new, not really new at all. And we tend to think that everything was invented in the West in the last couple hundred years, and really most things that matter invented maybe in the United States in the last decade or so, and actually anything before 2011 '97 is pretty old. And the reality is so much that most of the things in the world were invented long before Europe was a colonial civilization. Most human beings have been around for 150,000 years. And most of the things that we, that matter and we care about, and even the technologies that underlie them have been around for a very long time. In fact, I can argue that if you think about a platform as a shared resource, as access to shared resource for material ends, access to platforms and who owned them is really the underlying activity of the economy itself. You could describe, rather than describing economy as class conflict, you can really describe it as the conflict over who owns those common resources we need to meet our material ends. Does someone else own it? Do we own it in common?. And so in that sense, that platform cooperativism has been the dynamic underlying our economy since forever. And I'd even argue of civilization itself. So, to sort of explain what I mean of going back in time and civilization, I'm gonna reach over to my technological gizmo here. So, I'm gonna start at where civilization is posited to have begun by current Western historians in Mesopotamia, a couple thousand years BC. In the Fertile Crescent where farming began. So you had all these nice little farms pop up. Well, running your own farm with a family, a small tribe, that worked fine. But you needed some common resources. Now, note that this is a very stylized, simplified version of the beginning of history. The drawings are supposed to give that away. If they didn't, I'll just say it. You needed a— in particular, you needed a common place to store your grain. Everyone trying to store their grain on their own, theft, pestilence. So a common granary, I'll put as being the first platform. And initially, in this stylized version of history, that common granary, everybody shared it. It was owned in common. It was a cooperative platform. People would put their grain in it, store it for the season, and when you needed to plant again, you take it out. And in fact, if you lost your grain, this would be an insurance policy. You could have more grain the next year, because without more grain, you can't plant again. What happens over time, and the Mesopotamian civilization lasted in this system for thousands of years, to remind ourselves again of just how young and small we are. Over time, power inverted and the civil servants running the platform cooperative became aristocracy. And they start to yield, they start to exert control over the individual farmers. And so rather than being able to go to the granary and get grain, when you've had, say, the flood, the moving of the Tigris-Euphrates River washed away your farm that year, you actually, rather than being able to use that as a common source to rebuild, it actually became debt. And this is where debt begins. And in fact, I really don't wanna stand there. And in fact, this is where the Mesopotamians introduce money, they introduce logarithmic math, so that they can calculate infinite compounding interest that has no basis in material world. And when they actually invent money, that's when things really start to go off the rails. And the history of the Babylonian civilization is revolts and then reassertion of democracy and reassertion of common control, birth of aristocracy again, revolts again. So you see this cycle happening throughout in this stylized version of a few thousand years worth of history. So this financialization of society begins in Babylonia 1,000 years ago, not just with capitalism. And I posit this is still the underlying dynamic of our economy now, that we live in a financialized economy. And I will also further argue that money and finance is the original technological platform around which we are trying to decide, is it owned income?? Or is it owned by someone and extracting from the rest of us? Well, in case it's not clear which of those versions of society we live in now, I have some slides about the current shape of the US economy and its financialization. People are probably familiar with this, finance's share of the GDP that rose precipitously before the Great Depression, and then it went down again, and now it's way higher than it even was before the Great Depression. As a few more slides, people might be familiar with this slide. Which charts the growth in median family income after, essentially after World War II up till now, and productivity. You see productivity rose consistently and continues to rise consistently even though people thought, well, the US economy is kind of, it's on the skids, it hasn't been rising for a long time. It actually has never stopped rising. It's just median family income which stopped rising around 1973. I was born then, but it wasn't my fault. It really stagnates. And if you actually took a much more holistic measure of median family prosperity, it would be dropping if you include things like debt and stuff. And of course, what did do well since that period in 1973 till now? Finance did great. Uh, finance's share of the economy has grown and grown until, in a time of record corporate profits, we have a record share of those corporate profits going to finance. So the question then becomes How do we— now we have factories and farms— how do we get back to a financial commons? What would a financial commons, the platform of finance, what would it look like to be cooperative? How do we get that again? Well, there's a lot of different ways to approach cooperativizing finance. People talk about the crowdsourcing models. You start with money, you start with a new form of money, a new way to lend to each other. At The Working World, we decided to start with is the means of production itself. So we start with productive projects. Consumerism is pernicious because we buy too much junk and then put it in a landfill, of course. But it's also pernicious because it teaches us as humans in society the only thing we can do with the, with the yield of our production is to buy things. We just consume. We don't actually plow them back into producing. Most people now wouldn't know how to produce for themselves, wouldn't know how to build the things they need. The money we get We buy things, then we have to go out and beg for a job again. So actually having a system whereby we know how to take money and turn it into productive capital, that we see as being fundamental to then creating a financial commons. If the purpose of a financial commons in the end is the distribution of the means of production in the widest possible way. So, our happy people. The clipart was supposed to be better, it wasn't my fault. So what we've begun in the working world is we're tackling that side of it. We're making a platform of finance through the means of production. We've been working on this, as Stéphane said, it's been about 11 years, and we've been working with putting capital into productive enterprise for all that time. And what we've tried to build now is a platform whereby we could share our experience and methods with others. And so how do we achieve this system? Well, onto our scene when we didn't, we didn't know what to name this effort of ours. We had a little baby born. Baby Madeline was born the day that we decided, the day that we came up with our new system and the day that we received actually a large donation to make that new system by a donor named Madeline. Little baby Madeline was born to my wonderful colleague Christine and her husband. And so that is She's both the face and name of the next financial system. I'm not sure if her older sister is as excited about it as she is. So what is the Madeline System? The Madeline System— I'm going to tell you some of the characteristics of it, and then I'll actually try to show you the nuts and bolts. Characteristics of the Madeline System: it shares the practices of productive investing. Again, most of us don't know how to do anything with money except consume. Taking money and turning cash into productive capital is not something we're used to. But it's in our DNA. It's most people are productive. But we need to share those practices amongst ourselves and demystify it from the few businessmen who run for president that think they know it all. And share again the idea of producing and knowing how to produce effectively is common human knowledge. So the Madeline platform is a way that we share this knowledge of how to invest And how do we turn cash into productive capital? So the Madeline System, by bringing together different projects from across the country, I'll talk about investing projects, it also aggregates those projects so that when they go to the financial markets, they go as one unit. So rather than Esteban, he wants to start his café, and I want to start my roller skate factory, and us trying to go to the financial markets on our own and getting killed because our projects are small, We federate together with the Madeline system, we add a bunch more folks, and then our ask in the financial markets is much greater. So rather than looking for half a million each, we're looking for $50 million as a collective. Turns out in the financial markets, if you ask for $50 million, you get much better terms than if you ask for half a million. Oddly enough, I've gone to many investors and they're like, I don't know, I'm sorry, I just can't put money in your project. Half a million dollars, nothing. If you want it now, if you want $100 million, That would be no problem. But a half a million, I can't do it. This conceit is something that people on the ground that I've met across the world, they don't realize. They assume that even their good friends of Stéphane, who they really believe in him and love his project, they're probably in competition with him when it comes to going to capital markets. So the reality is that's not true. We are much stronger together, just like two workers in a factory are much stronger if they go to the boss and ask for a raise, they go together. We as two projects in the country are much stronger if we go to the capital markets together and ask for capital. One of the interesting upshots of the financialization of our economy over the latter course of the 20th century, and especially since the financial collapse of 2008, is there's a lot of money out there. By some estimates, they printed $16 trillion for the quantitative easing they did with the banks. That money had to go somewhere. The fact that there are now— there was as many billionaires created in the world after 2008 as there were in all history before it means that we didn't get doubly as productive. There's just a lot of cash out there. And so this is another underlying conceit that if we can make a big enough funnel with a low enough risk by arbitraging all these projects together, we can get a lot of that cash. The cash needs a place to park it and it needs this kind of real economy to park itself. The Al Madalin system also So it also, by bringing us together, it allows us to have common accountability. So we can share each other's methods of— Stéphane can show me how he got his café going, I can show him how I got a roller skate factory going, we can teach each other how to invest. We can also hold each other accountable so that if we go to the financial markets together to raise capital, we can show each other, document how we do things, even if we're in faraway cities. We can use our platform to show how we're investing in our roller skate factory and in our café and hold each other accountable to it, which allows us to make essentially an effective producer cooperative. So we become like individual producers making our different enterprises, working together with this platform using the capital we raise in the capital markets. And this system will allow us to be accountable to each other in that process. Um, the last thing I'll say about it is that The Madeline system, it's essentially, it's a way that we can project manage our investments together. He can do it, he can manage the project of his investment for a cafe, I can manage my project for my investment of a roller skate factory. We can look at how capital goes in and goes back out. It's just a distributed project management system, but it, but it's projects that are our livelihood that involve our investment capital and their returns, which as you know, we're all interested in. It allows— we're trying to build a system is to allow other modules and pieces to couple on top of it. So you can imagine rich crowdfunding. What do I mean by rich crowdfunding? Well, right now a lot of crowdfunding is you get a photo and a paragraph that says, "Don't you want to invest in this?" It's kind of novel. It's pretty new that you can raise money that way. If we actually got where we want to get with crowdfunding and it was a common thing in our economy— that's from Hamilton— there would be thousands and thousands of projects to be crowdfunded. And a paragraph and a photo probably aren't going to cut it anymore. So the idea of being able to track in much richer detail each other's investment projects on a platform that can then be shared with our crowd, we can do much more advanced, sophisticated, or as it's put there, rich crowdfunding with it. The platform doesn't have that yet. It's open to allowing that to happen. So a number of people that are working on crowdfunding, we'd like to be able to plug those different crowdfunding modules into it. It can also allow for local equity investing as a more advanced form of crowdfunding. So not just debt, but if you can— some people are working on the possibility of local equity investing. This would be a great place to plug that in. If I'm going to put equity, essentially investing in his café, really great if he's got a nice, easy-to-read standardized platform to display what his investment in his café is about. And then the last step, it could even allow commercial or banking. The farthest iteration of this is if this system shows projects that people can invest in, people also can move their— some of their savings to it, or his café can put its savings in. So it becomes a way for different enterprises to also have their surplus stored not just in their own enterprise, but across a distributed bunch of enterprises. It sort of makes a mutual fund of all our different projects together. That we can invest in and arbitrage the risk across. So to get through it, okay, so really quickly, The Working World is the first prototype fund. Essentially what we've been doing for 11 years with these statistics are old now. Yeah, it's been, it's been over 1,000 investments now. That's been all a prototype to show what a local fund could be like. Now what we're doing is sharing all that knowledge with these. This is our first, the first group of peers that we've put together so far. There's 27 different organizations in about 10 localities across the United States, most very movement organizations on the ground, real contact with people on the ground in places of need. We all came together to have a training together on how our process works and how the Madeline system would be used to share our processes. All those groups are now back in their localities working on those local investment projects that we will share together and go to the capital markets for together. So real quick, since this is a techie conference, I'll put up a couple mockups. What does it actually look like? This is the new version of it. There was an old version of Madeline's System that I wrote, and that was kind of bad. Wrote it in PHP years ago, but it was a fine little prototype. It was a great prototype for about 6 months. It's been a horrible albatross for the next 11 and a half years, but it's about to be replaced by this. So you could like list a project. There could be different loans in that project. You have calendar, it has a calendar of all the steps of when he's gonna buy his café, when he puts in the first machine, when he gets the roaster, once the roaster gets working, when they decide to split the roaster off and make a second business out of roasting versus cafés, whatever they did. And the last thing I'm gonna say about the Madeline system, because I'm down to a minute but it works anyway, is that it turns out that in our prototype fund and in all the funds working with this kind of financing, 99% of our financing has gone to cooperatives, mostly worker cooperatives, some producer cooperatives. And why is that? We're talking about controlling capital. Well, when finance is under control, people can be in control. The key dynamic in a worker cooperative is between labor and capital. In our system, as those graphs earlier hopefully showed, capital really had the dominant hand, and you could essentially say that people work for the profit of capital. Capital tosses people out when it's done. It keeps all the surplus. A worker co-op is when workers hire capital, use it, throw it out when they don't need it. It's workers in control of capital. The final upshot of this system of capital as through control of people is that the full fruition of it is the worker cooperative, which borrows the money from that pot and keeps its savings in that common mutual fund and has its own local control over capital. So I'm going to end there, but the last thing I'll do is actually show some of the workers that have borrowed from our prototype fund, because really it's about people and faces, and technology is there just to be a tool, just like capital should be. So these are some workers in Argentina who borrowed from our fund to run their own factories. I like that guy. Good system of labeling too.

And—

got to get through them. There are about 200 or so factories that are all run by their workers that we've loaned money to and invested in Argentina. The photographs go here. And also in Chicago, near a Windows factory that was bought out by its workers, borrowed from the fund as well. And there's more pictures coming along. You'll get to see. They're all phenomenal people, I promise. There's someone coming in New York City in a moment. But that's the presentation. Thank you very much.

Thanks, Brendan.

Sure.

So why don't— do you want to actually do that while I read?

Yeah.

OK.

I'm on it.

Even though Kanyi's bio is kind of short.

But here we go.

Yeah.

I was like, I lost you somewhere. So I should announce that— Kadiman Rohas was not able to make it, unfortunately. But that just gives us a little more time to hear about these other approaches and projects. So Kanyi Maqubela is a partner at Cooperative Fund, an early-stage investment vehicle focused on mission-driven technology business. Collaborative has made over 50 investments in in its sort of early years, years, early years. And part of what I'm curious about in hearing from you, Kanyi, is what sort of crowd-owned innovative investment platforms might traditional financiers have to get used to for sort of looking toward change? And what does that spell for the different financing pathways and risk profiles and for liquidity scenarios? But yeah, tell us, give us your spiel. Oh, you don't have a thing, which is so great. All right, so Kanyi.

Can you see me if I sit here or should I stand?

I think I'll stand. I'll hold.

Ooh, I'm too tall. OK, there we go. Yeah, I don't have a presentation for a couple of reasons. The first reason was I couldn't decide what I wanted to talk about. And I've changed my mind 10 times in the last 10 seconds. So it's been a strange moment for me. No, but I'm really appreciative of your presentation, and I thought Danny's was extremely interesting. And I actually want to start by riffing off of what he does. But before I do, just to give a little bit of background on my vantage point, because it might be somewhat different than the rest of the panelists. So I am from the capital markets. I'm one of the partners of a $100 million venture fund, and it's like a— proper Vampire Squid regular old venture fund. And our belief as a venture fund, our catalyzing instinct is a belief that there's something in the water in this generation, so the people in this audience, but even more broadly where meaning over money, and purpose over profit, and passion is driving consumer behavior. It's driving employee behavior, and it's increasingly forcing employer behavior as well. And so we're trying to invest at that intersection and trying to use the capital markets is to create a more sustainable society and to create a more humane society. It's a very interesting challenge, which I'm going to describe a little bit of my experiences with here. But before I do, I just want to react a little bit to Danny and express some of my point of view about— oh, I'm sorry, Brendan. Brendan, excuse me. Excuse me. Danny's after me. Danny, Brendan. And express my point of view about— how I think we've gotten to the place that we're at now, where capital seems to just be dominating labor so thoroughly, and how vexing that is for all of us. And so the way that I like to describe it is through the story of Ronald Coase. Show of hands, is anyone familiar with Ronald Coase? That's a really good number. That's higher than normal. So for those who aren't familiar, Ronald Coase was a British economist who, for his graduate program, wanted to understand— this was basically at the turn of the 20th century. He wanted to understand— what he saw was an extraordinary production capacity in the United States. And he was trying to understand these companies, which started with General Electric and Motors and the like. And so he came to the United States and toured a bunch of these companies to figure out what the heck was going on. And over the course of doing that, he ended up writing a long series of essays, the most famous of which was called The Nature of the Firm, which was published in 1937. And what he realized was that the second wave of the Industrial Revolution was extraordinarily profound. And the too long, didn't read is that the second wave of the Industrial Revolution is, from my vantage point, the biggest contributor to why capital is such a dominant force over labor today. And so I'll explain my thinking around that. But the reason why that came to be, at least how— How Coase understood it, how Coase processed it, what Coase took out of it was this acknowledgment that the manufacturing line and these extraordinary transformations, technological transformations in how products get made from the loom to the manufacturing line itself to this notion of being able to mass produce. Mass production is a fairly new concept. It's 150, maybe 175 years old. And in the context of mass production, mass production, there is a really interesting moment where a whole economic system can be changed, and it's a revolution, of course. But the implication of it is really important. And that implication is when you can mass produce stuff, and you're coming from a world where you're fundamentally decentralized, disconnected, and you need a physical presence to be able to transact and to create liquidity and to to share resources. The mass production allows you to actually be centralized and connected so that you can actually have a global economic system because you can make stuff for so, so, so, so much less money than it might have previously cost to make said stuff. And since you can make it for so much less, then conceivably you can consolidate resources so as to distribute it more efficiently and distribute it further and distribute it using things like the shipping container. And so what basically happened was the manufacturing line allowed to mass produce. So you could literally make 5,000 shoes in a week. And the notion of making 5,000 shoes in a week, if you're thinking about individual shoemakers, is a little insane. But thinking about it in the context of these mass production lines is transformative. So it was this notion where you're centralizing the resources so as to create the manufacturing lines. But once you've centralized those resources, then what he realized was you had an opportunity where you got two people who were working on this line who weren't competing. They weren't competing because there was a global market that they were trying to serve from a customer standpoint, because they were increasingly specializing, which is another point that Brendan made that we are all increasingly specializing. But they were specializing, and so they were doing different things. And if they were doing the same thing— and one of the really cool insights about the firm and one of the really cool insights about a company is that when we work for the same company, we're not in zero-sum competition with each other because we get wages. And so there was no notion of competition. So he thought, wow, that's really powerful. And that makes a lot of sense. And what also he also found was in the shipping container and the development of the shipping container, which happened within plus or minus 15 years of this similar realization was that you could actually now get stuff to pretty much anywhere in the world with reasonable efficiency. But what this all required was that you really needed to centralize resources and add layers of complexity to the notion of how to actually produce a good. Like making a shoe isn't that hard. But when you put together a firm because you're trying to make 150,000 shoes, it becomes exceedingly complex because to make those shoes, to market the fact that you have those shoes, to get those shoes from point A to point B, the amount of complex coordination dramatically increases. And so that entity is called a firm. Now firms are very strange because firms are simply this matter of complex coordination to do what might ultimately be a relatively straightforward or much more easy thing to do. But in the context of creating a firm, that shoe is so much cheaper than one shoe that's made by one guy. And so the firm just suddenly took over. And so many industries, if not all of them, were using the firm to create stuff and were using the firm to produce goods. And so the 20th century was fundamentally represented by a shift towards mass production of goods because that just made the most sense. It was the most efficient. And so that's what Coase was writing about. And that's a dominant feature of what happened in the 20th century. Now, the implication of that is if you're trying to find methods for financing and for creating economic stability around the context of a firm, there are at least presumably— and this is one reading of what happened— increasing layers of sophistication that one might need to be able to figure out what the value is of this incredibly complex coordinated project versus this complex coordinated project versus this complex coordinated project, how those interact, because you're dealing on a global scale with every single person at least conceivably in the world. And it's becoming utterly intractable. And so you need a high level of expertise to be able to figure out how the capital flows should work there. And so my feeling actually is that as we went into this world of the firm where there is extraordinary complexity and thereby abstraction away from what's just simply taking a nail and putting it into a piece of rubber and putting that rubber on leather and you got a shoe. And now you've got this sort of amalgamation that nobody can really explain. Explain what the there there is because there's so many different things going on that they're actually needed to be alongside that, an increasingly complexifying financial system. And so my view on why capital ate labor was because labor itself got so complex because labor itself wasn't just people's time going towards projects where over the course of their time, you see exactly how that product is made and how that product gets from point A to point B, it became, gosh, you have to go to GE and spend a month there to figure out just how your lights turn on. These things are so complex. Now what's happened since then, and what is actually a point which I think of as an inflection moment in our society, is that we— I have 5 minutes. OK. Gosh, I'm going to barrel through this because I've got more things to say. So what happened since then was we moved into an era where the communication costs, and so the marketing that I've got some good that's worth sharing with somebody else have asymptoted to zero. So I'm connected with almost zero cost from a communication standpoint with every single person in the world. That's a change. It's a pretty big change. That's one, and the internet has enabled that. Two, I think as a function of that, but as a function of other things, Moore's Law, which is the cost curve of production of— it's actually for silicon chips, but for other types of technology— has also gotten dramatically cheaper. So it's so much easier to create stuff now than it was throughout the entire 20th century. And that's asymptoting to very, very, very darn cheap now. So you can make stuff, and you can communicate that you have stuff now so very cheaply. And the whole point of the firm was making stuff and communicating that you had that stuff a lot more cheaply than the status quo. But now, actually, the internet has allowed that we can do things that are more efficient, more economically efficient than the firm was. And so maybe the firm thereby isn't all that necessary moving forward, or at least maybe the firm— and rest in peace, Coase. He died, I think, 2 years ago. And when he died, I was like, well, that's funny timing. But it stands to reason, and this is just one broad point, that the internet is going to allow for individual and peer-based transactions, which the firm had disrupted and is going to be undisrupted. In what's in an economy that's 3.0, which is decentralized and connected and globally connected, where we were coming from centralized and connected. And before that, we were decentralized and disconnected, right? So that's what I've seen as one shift that's happened. Now there's some strong implications to that. And before I do this, I'm just going to take a hard right, which is that I think that the most powerful thing about Brendan— excuse me— Brendan's opening was talking about how so many things aren't new. And that so many modes of value creation and even financially oriented value capture, if you get down to their intellectual kernels, aren't that new. And crowdfunding is the one that I want to spend probably the rest of my time on, because I think crowdfunding is so old. And not only is it so old, it's so central to our whole friggin' economy. The insurance industry, which if you look at the Fortune 500, it's like 20% of it is a whole bunch of crowdfunding. We're all paying in our premiums, and we're just paying them to a third guy instead of paying them to a pool that we all share. We're all paying in premiums. If you think about NASDAQ, NASDAQ is literally a crowdfunding platform. It's a way to raise capital from lots and lots and lots and lots of people who are these retail investors. And even the notion of a bank, where you build these deposits, every deposit comes from every one of us. And it's those deposits that are then used to do all the things that banks do. And so, so many of the core pieces of the financial infrastructure are themselves crowdfunding. Now, we've added this need for experts, this need for asset management, which I think represents maybe 500 basis points, if not more, of the entire global economy as asset managers. And I'm an asset manager who are worthless and who are soon going to be— who are soon going to be— who are soon going to be be innovated out of existence because what our value is, and this is a 21st century value, is this notion that information is scarce and it's hard to access and this stuff is complex and these firms are really hard to understand and you need a certain level of expertise to be able to deploy capital efficiently into these markets, right? And so now that we're getting back to a world where access to information at the very least is utterly an asymptotic curve, right, where we're getting back to a place where we can connect to each other and efficiently gather information and resources around said information such that the asset manager is irrelevant, then I think that we're about to approach a place where the labor can actually take the capital over just from a very structural standpoint. So back to crowdfunding. Mutual funds, right? Mutual funds.

OK, sure.

Mutual funds, which are one of the— One of the— well, OK, I have less time than I thought I did. So let me narrow my field of vision a little bit more here because I'm getting a little excited. OK, so there are platforms for crowdfunding that are old, and a lot of why— I find them to be somewhat sort of frustrating and at best extractive and at worst destructive is because there's so many different layers of people who claim that you need a certain amount of information to cross this layer. And so pay me, toll booth operators, right? And you put enough toll booth operators on there and then all of a sudden you've got this huge bloated system of people who are just toll booth operators when you're trying to get from You're trying to get your capital from point A to point B. And the municipal bond market is a good example of this. So municipal bond, if you go back 100 years, was we need to raise money for our school, let's issue a bond. And a bond is basically just debt. And so let's raise this bond. And so they would actually put it on the city hall and they would go around to people saying, "We're trying to raise money for our school." That's what a municipal bond is. Now a municipal bond, which is a huge market, has— a Bank of America analyst, and a Vanguard guy, and a Merrill guy, because they're so complex. And the muni bonds are often just trying to raise money for my park, trying to raise money for the school. Municipal, so city bonds. So we're trying to get a loan, and once this thing is built and earning revenue, we're going to pay it back. And so what about the notion of doing a municipal bond directly from the people in the darn city, and doing it on the internet? There's no reason we can't do that, right? And another example of this is this notion of crowdfunding. So crowdfunding, part of why the SEC has put these restrictions on being able to go public is because it's hard to get the right information. And the SEC is this body that's going to validate that information and protect the individual and make sure that the individual is not getting taken for a ride, but only if you're a certain type of investor and so forth. And we're living in a world where there's so much more information. Information's abundant. Information's cheap and free and easy to access. And so what about crowdfunding for local projects? What about crowdfunding for projects that you just understand? Like, what about going public? And going public is, in my mind, just crowdfunding. What about going— it really is. It's like crowdfunding, just get all the rigmarole out of there. What about going public if you're If you're trying to raise money for a new local cheese, if you're trying to raise money to sell a few more shoes than you sold last time. You can do those types of things on the internet, and you can do those types of things on the internet with information that can be validated. It can be externally validated. You can have large quantities of people who are ensuring that this is true. This system of crowdfunding, which is what we use to get liquidity, is what we use to consolidate our financial assets. Is something that has been around for a while, but the internet can allow us to do it with dramatically more efficiency. And I really think that we stand so much to gain because we are the ones who are producing. It's actually our dollars that we're putting into these mutual funds and putting into these pension funds and putting into these muni bonds and so forth. So if you can put them into each other directly, we can create a much better world.

Holy wow!

Wow.

Wow. Whoa.

OK, we have more. This is so exciting.

Right?

So Danny's next. Danny Spitzberg is an ethnographer and campaign strategist based in Oakland nowadays. He's principal at Peak Agency, which is a collective that works with cultural and economic justice projects to grow their membership. Most recently helping to relaunch Lokenomics, a freelancer-owned platform for local services. He organized with Omnicommuns, a kind of collective, do they call themselves a makerspace?

No.

Okay, okay, a collective of collectives, it's fine. And co-directed CoFed, which is a national training program and network of student-led food co-ops. Danny, we gotta, To toggle the thing for the thing.

It's got to be—

Let's do that.

Yes?

Do you have a curveball question for me?

I don't know. I think I did.

I don't remember where it went.

It's—

Here's my curveball question for you. How might— and I'm also just reflecting on where Kanyi kind of wrapped up. But how might crowdfunding help co-ops build collective power?

Okay. Yeah.

Oh yeah, my first trick, I'm gonna make a shoe.

With one nail.

One nail. All right, hi everyone, I'm Danny. Thank you so much to everyone here, and I also just want a quick round of applause for everyone who's actually building a platform co-op. So I have today a quick sketch based on some reflections of a few years doing crowdfunding work. And as I'm wrapping things up to be able to make free and openly available tools for people to use, plus some of the support, I'm trying to sketch out a bit of a— bit of a handy framework that I want to test out with you guys. It's coming from crowdfunding, yeah, but it's also for this Platform Co-op conference a question of, well, how much are we doing marketing and how much are we doing organizing? Okay, so this has been said probably 9 times today, just this afternoon. It's actually— I find it really nostalgic and very comforting, and I don't know what's going on here, but I also find that very nostalgic. Very comforting. Sure, yeah. Sweden, I think, right? Switzerland, right?

Switzerland.

Whatever. Point being that I find this also to be a bit dangerous and misleading. Crowd co-ops being the original crowdfunding. Last May I was giving a workshop with my friend Joe Rehman from the North Country Cooperative Development Fund. They're really great. Joe said this to a crowd of folks who were mostly starting small projects, you know, food co-ops, that sort of thing. This was out in Sacramento. This woman from— and he said, "Yeah, you know, co-ops are the original crowdfunding," as if that was going to demystify crowdfunding for people. And this woman from Stockton, hard-as-nails type of, you know, she's like, "Yeah, great, but I still need to know how to do the campaign." And Joe was like, "Oh yeah, okay, let's keep going." So I felt like that was the real tension here. It's nice to think of these platforms, sorry, these arrangements as crowdfunded and crowdfunding, but what I'd like to do is dig into the operations of things and to really expose what campaigning is like. And like I said, sort of weigh the differences in sort of a more-than marketing and organizing. All right, so what this one is really after, did it get cut off? Mm, that's not fun.

That's what it said.

Mm, no, I'm gonna try pushing buttons. It's gonna be a lot of things. How can I make that smaller?

Skip.

Skip.

Mm-hmm. Is there anything I can do to make it—

You're almost there, just move the window.

Zoom out this side.

Drag, just drag it.

Oh my God, it's so tiny.

Click and drop, my friend.

Whoosh, whoosh.

Now, man, and then— no, in the middle, left, top, right, right, right, right, right.

This is the danger of crowdfunding.

Driving, you know?

Do you want to try again?

Where's the slide?

Okay, so while you guys fix that, thank you for telling me. What she was after, this woman, was this simple formula for how generally crowdfunding is done, right? You find number, like I said, number of views to your crowdfunding page multiplied by the percent of those people who click to become donors. And pretty much everything you put together for a campaign, like Brendan said, the paragraph, photo, the headline, the thumbnail, all that, you can reduce that down to how many people is that going to get to visit the page and what proportion of those people will click through to become donors, right? Which is functional and like I said, a bit dangerous insofar as it takes this potential for people coming through to become—

the other ones aren't cut out— supporters.

And who might become members of the thing to mere donors.

Right?

How are we doing over here?

We're just going to— this is the one slide that's affected thusly. And so it's just got to be like that. And then can you tell us what it says?

Yeah, I just have to replace it. Oh, I may or may not have a copy of that.

I was busy.

All right. So what do we got?

Right.

So these kinds of campaigns, as I'm sure almost everyone has experienced, tend to really tap out community more than they build it up. I appreciate what Brendan was saying and Kanyi Maqubela's tour de force for showing the different scopes and scales of campaigns. I'm talking mainly about the campaigns that we borrow, I know personally. And what they can do to, like I said, tap out community more than to build it up. So what I've been trying to do over the last while is take a community organizing approach to crowdfunding and leverage that. Talking about building power for cooperatives. Oh, thank you. That makes it come out so much more. So for example, a lot of the people who come to these—

Yeah, that looks nice.

These are where your shoes come from. So I've been trying to use this community organizing approach to crowdfunding, looking at, well, what do we do to host? What is the art of hosting and crowdfunding? What are we doing to make a great invitation? Not showing where people have needs, but what is the potential they have, and then hosting a really great party for them to meet one another, to have camaraderie. Again, this stuff is not new. Whoopsie, pushed the other button. You know, there's a simple matter of, well, people who have the specific vision, the specific potential, right? You have these young tigers— bear with me— who see the world a little differently than your average tiger. They have to get together and do their thing together. They are this, if you will, this sort of core group doing this new whatever it might be. In this case, they need to get some water, that's fine. And they ally mainly with their community where eventually they say, "Guys, you know, we all speak Tiger and it's tough. Young Tigers like us can't get a shake at the oasis. What if we make something happen?" This is crowdfunding, by the way. So then eventually, yeah, they find a common need. And this happens. But let me be a little more sober about this. This stuff again, it's not new, but you see a marketing approach steamrolling over what— this is a more political economic point of view from decades ago. There's a scholar, I forget his name at the moment, he had actually the broken windows theory guy, but he asked why do people voluntarily associate? And he said Is it economic interests? And he discovered, you know, as we discover these days, air quotes for those looking elsewhere, that no, indeed there are other incentives for why people voluntarily associate. That plays out in really powerful campaigns. Even the guy, Jancz, what's his name, Janczyk from Kickstarter himself said, when you go to crowdfunding for money, you will probably fail. But if you go there to build community, As everyone's saying, I think community is the new innovation right now. Then you will succeed. So, you know, he's tapping into something quite old and traditional for those who still can appreciate what it means to live in community, a beloved community if possible. And yes, so purpose for a campaign, that is, what can we achieve together? What is our collective power? Which is tough when you're raising just from individuals, but still the solidarity. So what is the common purpose across people, right? What do we all feel in our lived experience? What is some of the emotional labor that we all, you know, struggle through? And then yes, of course, the material economic benefit— that cannot be left behind. And new work from a guy named Peter Murray, for example, he's trying to spin out lots of apps, lots of platforms for groups like the National Domestic Workers Alliance, I think, and others, where they're saying, yes, here's something that matters to you on a daily economic basis, just like the NRA offers life insurance, just like the AARP offers a different kind of life insurance, and then we'll lop on top of it all these other community layers, right? So what's happening is people are rediscovering this stuff but still coming at it from a very, like I said, marketing point of view. Marketing meaning How do we communicate to someone that they have a need for something we would like to sell them? It's not my background. Like Esteban said, I do ethnography, but I'm seeing this sort of being unwittingly adopted. So I want to talk about a very quick example of how this worker co-op that is Lumio made its way through a campaign and has ahead of it potential for platform cooperativism. And then I'm going to wrap up by showing you a couple of the distinctions and metrics. So yeah, great campaign. It was a real peach. You should go watch the video. And they had this excellent set of those incentives embedded. The purpose was, hey, democracy. What is democracy? Well, it's when the decisions that you make that affect me also have some place for me to have my voice. That's great. We should include everyone in the decisions that are being made that affect them. So they had also a lot of delight, a lot of whimsy, and yeah, they had this tool that you can use. Changes your workplace. Economic value right there to make decisions and facilitate discussion. Okay, here's another photo-worthy slide for you guys. By the way, I'll put my email at the end because I'm putting this stuff all together with much more narrative around it. But yeah, they found the people that they really cared about, you know, they They packaged a great invitation. This is sort of classic organizing, right? They said, hey, if you believe in better decision-making, give us a shot, right? Then they ran a really engaging campaign. They had a party. They had lots of parties. They love to party. If you ever knew Wellington, go and check out the Inspiral and Luneo crew. I see some sparkly fingers. M, spirit hands, jazz hands. Why access? And so what this is really is that The dotted line is effort for—

is dollars going out, right?

The thick line is potential for funding, not dollars in the bank, but what is the potential we have together to make this happen? And that top line there is 100% of your goal. So this is less important than what I'm going to show next, but if you photographed it, cool, ask me later about it. How do I click something? So I don't have anything against Lumio at all. I think they're lovely. And what they've done is they've had a worker co-op, got a bunch of money to do their thing. Now they're looking for social venture, social enterprise funding. They're trying to figure out B Corp. It's a pretty familiar story, and it doesn't quite get anywhere near to what Brendan was describing, for example. Some pooled assets, some large collaborative fund. Even though Inspiral, which is the sort of host group for Lumio, small detail, has something to go. They have this platform, you know, and you can look at it two ways. Are these people who are mining this watermelon for whatever the hell this is? I just found this. Is this a cooperative effort, right? Or is this something where this guy down the bottom left is like wearing his, you know, Oxford blue JFK outfit and he's just bossing around? I don't know. But what I'm getting at is with Lumio right now, you have a lot of people using the platform better than they know how to use themselves. And they're trying to figure out, wow, we've got this great platform. What are we doing to really make it a commons? Well, we might— I think MJ, who's here, was saying we might have people who run these different use cases who are doing these little decision-making efforts with this tool we built. They'd be feeding back. But there's something still lacking where the Lumio group, for example, is operating on a pretty traditional approach of, well, we got this product and now we're going to try to get people who are using it to feed us back knowledge and we'll improve it. Good stewardship, good, you know, feudal sort of work. So I find that this idea of a platform cooperativism is really compelling. I've been friends with Nathan for some time. I think the spaceship metaphor of like, what are we doing for the future? It's a little dangerous because there's so much old stuff we can reference. I think things like Ethereum are delightful but maybe missing the point. I think other spaceship metaphors are also dangerous. So I think pirate ships actually can offer us quite a bit. I'm not going to explain much because I have just a minute left or two, but in pirate ships, as opposed to the merchant marine, There's a great paper called The Invisible Hook where this guy says, you know, actually in the 1700s, 1800s, pirate ships were racially equitable. The pay was almost flat between the captain and the people who were the crew. The merchant marine was just crazy. It was slave labor and it was widely spread in terms of their income. So I think there's something to be sort of in that tension of, well, pirate ships are criminal, yes, but they're really modeling good behavior internally. So I just want to zip through these last two slides. The way Silicon Valley works these days is they've used what's called pirate metrics. Like Espen said, I live in Oakland, I hear about this a lot. It's been around 10 years and it's a very simple way to grow a startup. It really leverages this marketing and— oh God, has anyone heard the term growth hacker? There are people who are running around not knowing what they're really saying They probably— okay, no need to insult, but they work through these set of metrics. How can we acquire users? How can we activate them on the platform? How can we keep them on the platform? How can we get them to tell their friends? And how do we earn money? I see Lumio doing this too. I mean, I think they're doing a very sophisticated approach, but it's still the sales and marketing schema. I think what this does is it just grows a larger user base mainly, right? And it also allows that orientation to business as usual. And social enterprise doesn't really, I don't think, fall far from the tree. So what I'm thinking about these days is mutiny metrics. Leveraging that metaphor of the pirate ship where, yeah, it's a little criminal, but there's this really democratic threat, if you will, where there's, um, the captain's out if he doesn't do the job right, and people will just run it themselves and find a new captain. What I've been sketching out for these different campaigns I've been through and for some organizing work is, well, if membership is an active thing we're working on, our member base, maybe some sort of strength orientation, how are people getting to know what the platform is about and to take it further? Not the best word choice, but reciprocity, where there's an equitable exchange of the work from the so-called members and the platform stewards. And then finally, organization. If anyone knows Fred Moten, he's a fantastic poet, look him up. He talks about, oh, we have lots of organizers these days, but what the hell happened to organization where we can get things done? We don't have to rely on some charismatic individuals. So, and then finally leveling where Like with the pirate ship, the captain doesn't go too far really, and he's kept in check by the quartermaster because that is the way the ship is. He can't rock the boat, right? People will out him, and it's a quite flat setup. So last couple points, I find that maybe this set of metrics— for those of you who are actually working on platforms, pirate metrics are great, this may be better. This may be complementary. I'm really curious to figure out what we can do to not give in or not be, say, subject to the same practices that have been used for quite some time in startup world and to model better behavior. I find that what I've seen so far— this might be pushing it— but that there's democratic participation that these might favor more than just pirate metrics, which get more users, not members. And then finally, yes, collective power. I'm just going to answer Espen's question. My last bullet point. That's me.

Thanks, everybody.

All right.

Can you eject that thing?

The other one, I have it on my computer.

Oh, well that's excellent.

Thank you.

All right, thanks Danny. So we're gonna do this as a team. I'm actually gonna read both your bios right now.

Perfect.

All right, sound good? So we've got Paula, is it Seagull or Seagal?

Never seen it.

Okay, Seagull, Paula Seagull and Caroline Woolard. And I'll start with Paola. Paola is the founding director of 596 Acres, New York City's community land access advocacy organization. 596 Acres is a— well, let's see. Maybe there's a different organization that's a 3-year-old technology-driven nonprofit?

No, it's us.

Same one, great. So more description about it. So they're a 3-year-old. Technology-driven nonprofit that's enabled the creation of 32 new community spaces on formerly warehoused public land in New York City and resident engagement with hundreds of other such places. The open source platform of understanding and organizing around city land that 596 Acres created to facilitate its work, Living Lots, has been deployed by advocates in Philadelphia— that's some of the work that I did— New Orleans, and Los Angeles. It's also inspired 2 other nonprofits tools for public engagement with physical public assets for Melbourne, Montreal, Sydney, and Pittsburgh. Paula is here today as a member of the interim facilitation team bringing a real estate investment cooperative to life for New York City. I'm also going to— Ah, I'm not doing that stuff. I'm also really pleased to welcome Caroline, who is an artist and organizer based in Brooklyn, and works with the solidarity economy and conceptual art. Making media, sculptures, furnitures, and events, Willard co-creates spaces for critical exchange, forgotten histories, and desired-inducing narratives. Her practice is research-based and collaborative, sensing that each project transforms the people who make it. Little Octavia Butler in there, hi. Willard opens spaces for co-production rather than toiling alone. In isolation. In 2009, Woolard co-founded 3 organizations to support collaborative cultural production, 3 long-term infrastructure projects that support short-term artworks, a studio space, ourgoods.org, and tradeschool.coop. Working with conceptual artists, educators in the solidarity economy movement, and technologies in startups, Caroline Woolard labors for political economies of cooperation. So, With all of that, are we set with that yet?

Yeah, just really—

All right, with all that—

Thank you, Mr. Welcome.

Yeah, and thanks for the awesome setup.

Sure.

I'm going to try to project. And Paula, I know that there are other members of the Real Estate Investment Cooperative in the room. Can you guys just stand up? We can do this totally differently. No, no, really. Yeah, yeah, okay. You guys outside, like, enjoying the sun. We're not gonna say anything you don't know. I'm Paula, this is Caroline, and we're gonna tell you about an emerging project that we hope actually really embodies the Mutiny Metrics that you just heard about. We are not building an online platform. We are building a cooperative venture that will impact the New York City, but by starting with the question, how can we fuse real estate investment with concern for local community? Spoiler is, we're gonna need a platform.

We believe that democratic investment mechanisms for affordable workspace will pave the way to the inclusive, resilient city we want.

Why do we need this? Picture a vacant storefront on your block. The shuttered windows, the white paint on the glass, retail space for lease, or a little for rent sign. How long has it been there?

What does that mean for you and for the city? It means rent goes up even if the storefront sits empty for months or years. It means for a local hardware store that their rent just went up from $4 grand to $14,000 overnight. It means they go out of business. They can't afford to live here. They're moving to Florida.

For our city, which just made the largest investment in the developer— in the development of worker-owned businesses of any U.S. city in history, this means investing in small business workers without investing in small business space for those workers to work in. For the Center for Family Life in Sunset Park, a developer of worker cooperatives, it means that shared office space for member meetings and trainings is chronically overbooked. For our city, it means local character and street vibrancy are at risk. And it means local wealth doesn't circulate.

So we're members, just 2 out of 350, of this early phase emerging democratic financial organization, the New York City Real Estate Investment Cooperative. We have joined together to secure permanently affordable space for civic, small business, and cultural use.

Anybody can become a member by giving $10 and coming to a general meeting. We're having meetings quarterly. As a cooperative, we're striving to operate by the principle of one member, one vote. We're going to decide together how to spend all the money that we pool. We aim to have an expert team investigate potential projects and present them to the membership for support after they've been vetted. We're hoping to ensure that members' investments are safe and safely, slowly growing. By using legal mechanisms for permanent affordability, we'll make sure that ownership structures reflect the needs of the present and future communities and honor the collective power of and capital used to make them possible.

And it's important to remember that we're only 5 months old. So far we have over 350 members in our co-op, we've received $1.3 million in investment pledges, a grant from RSF Social Finance, we've established 7 work groups that meet regularly, and we had over 700 RSVPs at our recent general meeting.

At this early phase, We're exploring possible structures. We have a case studies workgroup that's actually looking at best practices at investment— of investment cooperatives all over the world, and we've come up with some alternatives. We could act as an incubator. We could act as an investment cooperative ourselves, investing in particular properties. We could create a community-driven real estate investment trust, or a loan fund, or an organization that works in partnership with local communities. We haven't picked a form, and we actually think we'll use all of them as they're appropriate. We can, we know we can turn vacant municipal properties into sustainable community resources. We know we can buy properties from private owners to stabilize existing businesses and community spaces, and we know we can we can come to a day when we formalize an agreement with the city that enables a percentage of newly constructed commercial condos be dedicated to affordable use that we can manage.

So our public building inventory workgroup— some of the members are here— has reviewed over 84 vacant commercial city properties. And identified properties like this one, made site visits to them, and begun conversations with potential community allies. Paula will talk a little bit about one story.

Thank you so much. So the City of New York— who lives here? Okay, civics lesson. City of New York says this is surplus. In fact, since the early 1990s. The city has been empowered to identify real estate that it considers surplus and put it up for auction to the highest bidder with very little local oversight and a uniform land use review process that can take years between when it is initiated and when a building actually arrives on the auction block. That process is supposed to be the community input process, but when it begins, it's What community members and community planning boards hear is, "We're just doing this because we have to. There's no auction planned. This is just our job." Then years go by, and all of a sudden, a property will appear at a public auction that is not advertised to the neighborhood where the building is. This particular building caught the eye of the folks in our workgroup. That have been looking at potential investment properties. It is in Jamaica, Queens, in a residential neighborhood that lacks not only commercial services, but actually really lacks health services. It's got this big sign on it. Seems pretty obvious. So folks from that workgroup— and I'm just going to call Rafael out. He's right here. Woo! And he's going to join us when we come up for the discussion. But folks from that workgroup actually went to the local neighborhood— talked to local organizations, made a relationship with the church, and started brainstorming how this building could be reused. And right about that exact same moment, the City Department of Administrative Services published their list of what's up for auction this year. There has not been a city auction in 2.5 years. Um, yeah, there it is. Surplus, right? A surplus property. So we organized really quickly, um, We have a big leg up on this, since we have— we're coming from a bunch of grassroots organizations with a lot of skills. Right? And so, when I saw that auction list, I understood what was going to happen. And we mobilized community-based organizations in Jamaica, as well as citywide organizations that are acting as watchdogs for the distribution of public assets, including Picture the Homeless, the New York City Community Land Initiative. We planned a rally. Rafael worked with folks in Jamaica to collect hundreds of signatures asking the councilmember to stop the auction of this building. I think the next one— click, go to the next one. It's really small, but Councilmember Ruben Willis actually wrote a letter to the City of New York being— saying, "Oh, my God, please take this building off of the auction. It's in my neighborhood. There could be better things to do with it." They didn't do it. So, we went to the auction with copies of this letter. And I myself, and then Rafael joined me, gave a copy of this letter to everybody in the room. There were about this many people in the room. And when this building came up for auction, came up on the block, it was dead silent. You heard me. It came up twice, right? It came up twice. It was so nerve-wracking the second time it came up, because they don't do that usually. But it came up a second time, and we all just stood there like, oh my god, we thought we already won this one. What happened? And when the gavel came down a second time, almost everybody in that room applauded. So now we have a problem. We have the same problem we had. Forget about that.

Rafael's here.

He's up there too. Now we have a problem. Right now we still have this building in Queens that has a screwed up roof. That the city has done very little in terms of community engagement for visioning a new process to create an asset out of that building. And we know that we have enough political power to stop having that building go to the private real estate market, but we're just building the thing that's gonna give us the power to actually fix it and turn it into something useful and do it with the trust and participation and real input from the local neighborhood. We're figuring that out. That's the platform piece.

So we're working toward elections, which will be on January 28th, for an empowered leadership. But until that time, you can follow along and get involved. So just to close, you should imagine that vacant building on your block But this time, imagine that it's open, filled with your neighbors, occupied by a small business, a civic organization, or a cultural group. And imagine that we have the power to make this possible, and that you can join us in building that power democratically. We think that we can use the power of the networked information era to bring economic and social justice to our built environment.

I think so.

Yeah, that's it.

We got our time.

We got our time, chat.

Fun.

Yeah, we said all the things.

Thank you so much.

We said all the things.

So, um, you want us to come up?

Yeah, everyone, let's, let's come back up here and I'll get the house lights all the way up.

OK. I have a question.

You can switch.

So yeah, I'm sticking with my original game plan, which is let's first— all right, we'll get to you. Let's first, if there are things, thoughts, reflections, comments that you have among yourselves, just for a few minutes. And then I know that the audience have a lot of brilliance to bring into the room as well. Please, you're here for a reason.

I think one thing that I am afraid of when people get excited about investment cooperatives is the idea that we can't demand that some things are public or common goods without our investment. And so I was wondering how you all feel about the erosion of public services and the replacement of arguments for crowdfunding and crowdequity for things that we should otherwise just demand or imagine are already ours. So how do you combine the organizing tools with the resistance work of not accepting that we have to fundraise for our library or school?

I have one thought, and then I'll defer to people smarter than me about it, which is that a lot of common goods are are taxpayer-funded, and so they are crowdfunded. And there's—I mean, that's the simplest answer. And so I think that it's on some level the same side of the coin, and it's a matter of which vehicle you have better organizing capacity around. But a million people who have shared interests and who are putting their dollars towards something, whether they're putting it into the government government who then puts it back into that thing or putting it in themselves seem to me like they're the same million people who are trying to organize towards a desired goal.

But people are taxed differently for a reason. Some people have more money to give.

Isn't the system of adjudication in taxes is by one person, one vote in the government, whereas in a crowdfunding, it's one dollar, one vote. I mean, doesn't that— does that strike you as an important distinction?

It strikes me as a critically important distinction, which which I think is manifest in how one chooses to organize. And so if I'm organizing for the sake of the government spending money a certain way versus for the sake of my peers spending a certain way, I think that's an important piece of the calculus in terms of who I organize among and whose interests I'm trying to recruit to my cause.

I'll just add a brief point, which is it really depresses amazes me how crowdfunding is, as we kind of, you know, think of it as Kickstarter, just for example, is eating journalism, social life, you know, how we have parties. How many parties in the last year did I go to that was for a campaign? And what I also think is it's crowding out sentiment for really smart public investors. So how you choose to organize is already predicated on how you believe organizing is possible. And shout out to like 1920s Spain where people all wanted to have equitable arrangements and there was very little propaganda and it was collective society. And if you don't think that's possible, check out that history when people are like, yeah, public is great, let's all make it work collectively. So I worry about giving in.

Um, any other things that you want to— before we—

it's an awesome question, so I know there's a lot you can say.

Yeah. All right, um, we're gonna do 3 at a time. So 1, remember your numbers. 2, Felix. 3, Matt. I just know everyone's names. You're just psychic, that's fine.

Uh, go ahead. Okay. Uh, so I'm Alice from Afro Crowd.

We are trying to bring more Black people to edit Wikipedia. So that's one hat. In another hat, I'm also a lawyer. And so my question to the real estate investment fund is, I think— Cooperative.

Cooperative fund, right? Real estate investment cooperative. Okay. We're now all learning to say that together. So I I think that—

I think I heard you say that it's one person, one vote, correct? And then each member gets $10. And now you have 350 members and you have a million dollars.

No, 1.3.

You said that you raised a pledge. Pledge. Pledged a million dollars. So the question becomes, if that million dollars came from people who are not members, how are you going to over time balance the pressures from the pledges, right? In other words, how do you know that you don't have hedge funds giving to your pledging, and how do those hedge funds not take over, right?

Okay, so I'm gonna fix some facts.

Yeah. Before we do that, so first of all, did people hear the question? Someone didn't. So essentially the idea for the reinvestment cooperative, the real estate investment cooperative, is if insofar as there's pledges of a little over a million bucks coming from somewhere, is there any sort of obligation or are there pressures or powers or influence that come along with those dollars which overshadow the dollars of the members who've invested, essentially.

Perfect. Thank you. Felix. Yeah, hey, Felix of Fremont.

First, I wanted to thank you for the really entertaining and successful presentation. And just wanted to say, I think it's a really, really great project that you have there with the real estate investment corp.

You live here? Yeah, cool. No, he lives in Germany.

He lives in Germany.

I'm not from New York.

Miscommunication averted.

Go ahead with your question. Some people just do that.

Okay, so it's a difficult challenge. With Fairmodo, we at the time did have the second most successful crowdfunding campaign in Germany, and we were the first co-op doing a crowdfunding campaign using a crowdfunding platform. And of course, this was ages ago, it was in 2013.

So, and after that, a lot changed.

There came crowd investment with a lot of new vehicles, and our crowdfunding campaign was much smaller than what's happening right now. But the major point I realized, what we are doing is trying to crowdfund for people, human beings around us, people like us. And, um, they don't have the same access to assets as do institutional investors or professional investors. And so I don't think this comparison of the stock market or things like that to crowdfunding platforms is right. I think it doesn't work because banks are creating money, as we know, and these institutional investors and and other professional investment vehicles, they have had decades of, um, pulling enormous amounts of money out of the economy into this kind of virtual pools that are out there. And, um, and not even peace can't set up that. And so we have this challenge with Vermondo that we don't— we can't raise capital like venture capital firms can because we have to press the monopoly relying on people. And, um, right, and just very little education because I'd like to follow up on this discussion. And there's a 5 PM workshop which I want to use to discuss this in more detail. Oh, great, please come.

Room 205 to discuss further. Okay.

Um, and Matt, uh, so one other thing is I'm hearing Hearing this, kind of really like crowdfunding seems to be the— and, you know, as you were talking about, sort of sourcing things from individuals seems to be really sort of the dominant piece of the conversation that I'm hearing right now. But I want to just sort of point out and get people's thoughts on the role that for the last 3 generations, our ancestors have been accumulating this pool of collective cooperatively owned capital that's called the credit union movement. The assets recently passed $1 trillion. Now, you know, when we're talking about the ability, you know, this morning to bring some projects to scale, things that need tens of millions of dollars potentially to build these sorts of platforms, how do we— what role does that sort of cooperatively owned massive pool of capital play that has been built through a lot of sacrifice? My grandfather, you know, worked as a running a credit union out of a shoebox after work for free. So there's a lot of sacrifice that went into building this pool of resources, and if we can't tap that in order to build our cooperative movement, and we're just kind of throwing around pennies here and there, I don't know how much hope there is. So what place can that— what role can that sort of thing play in this work that we're talking about?

3 excellent questions. You're unleashed.

Can I go first? Yeah. OK, I want to just respond to some of the nuts and bolts stuff, but I think I can tie in the other 3— the other 2 questions, as well. We don't have $1 million. We have $4,200 in the bank, which means that we've had about— we have, I think, 383 members, actually, and they each gave $10. And then we also have a hardship fund. And we have more people who have given money to the hardship fund than people who have taken money from the hardship fund. So yay for us. And if— so if you want to join and you don't have $10, we've got a hardship fund. But in terms of— so those pledges were sort of a, should we do this? If we did this, is there interest? And that $1.3 million— I also want to— I almost want to say billion because it's so abstract. It happened in a Google Form during 3 weeks before we had any kind of institutional identity or membership, or even before we had our first educational event. This is a temperature check. Yo, New York City. Yeah, there is a thing out there called the real estate investment cooperative. Do we need one? And if we did, if we do, would you give it money? And how much would you give? That's what that number is. Um, so New York City was like, yes please. And we were like, okay. And we shut the form down actually after a couple of weeks because we were like, we don't understand what to do with this. We need to— if we're really going to build a cooperative, that's going to take much slower work than people filling out a 4-question Google form. The idea of one member, one vote really comes in my mind— maybe you guys can speak to this too— but it comes in my mind from the fact that what we're trying to do is actually impact place in New York, in neighborhoods. And we want to make sure that New Yorkers have their voices valued equally, no matter how much they contribute to the fund that actually reinvigorates those spaces. That will definitely be part of our governance. But from the beginning, we have been talking about having a very open door for institutional investment. Investing. There's no way we're doing this without pension funds, without credit unions, without getting all of us to reinvest our retirement money into this. So what we need to do first is build a really robust governance system and a management system that actually is true to what we aspire to do, which is put New Yorkers in charge of their neighborhoods, so then those institutions want to cede control. Right? So that that's actually not a negative thing but a positive thing that they see in participating with us. And so the work that we're doing is very slow and it's organizing. It's not— you know, we're not building an online tool right now because we don't know what we need.

Cool.

Other— yeah, other responses to the other questions?

I'd say for the credit union comment, Thank you. We are banked with a credit union, and I think the two things that hopefully the Platform Cooperativism Conference can spur are first, an investment cooperative for cooperative tech so that we don't need an ROI through venture capital, which either buys out all of our developers or ruins good ideas once they start getting good. And the second one is to actually work with the existing credit unions credit unions so that we can build the tools with them. Like we see, for example, in Canada there's an amazing credit union that does something like this investment co-op work where they have a night of pitches where different businesses say, hey, I need a loan, and everyone votes on it. So we could have a tool like that. We could just white label theirs. So I think let's have all the developers work together. Let's make sure they actually get paid patiently through an investment cooperative for good tech. And let's work with credit unions to continue that history.

For some of those questions, I'd like to answer them through Caroline's question of like how much of this should be political rather than just, we'll just build something, but what should we be demanding. And even things like the credit union, one of the problems, and so much of finance is that it's that finance is that common resource, and it's been circumscribed with so much different legalese and legal problems Like credit unions, they can't really get in the game of investing in business because of laws, like anti-competitive laws, essentially, of the banking system. And a lot of the ideas you were talking about of, well, why can't people just invest in their municipal bonds? And there's so many legal things right now that are stopping them. So one of the political— one of the fights is legal against all these rules that are there just to protect a monopoly over the financial system. If I had one thing I think we'd get, though, it would be that— what is that platform? I mean, it would be— the dollar, which, as you pointed out, who gets to make money? Like, we had to spend all this time trying to save $1 trillion. The Federal Reserve, the Treasury printed $16 million for banks that were losing money so that they wouldn't close. And having that, that's the platform that I think we should, we should cooperate on more than anything else, the US dollar, rather than a little consortium of private bankers that get to own it.

And do either of you have a response to Felix's I mean, I suppose that's something that will be discussed at 5:00 in that other room.

That's the institutional part.

Well, I have one thought, which is that Kickstarter is 6 years old and has funded more creative projects than the National Endowment of the Arts. I mean, this stuff can happen fast and can happen at scale. So, and Wikipedia is 10 Encyclopedia Britannicas in the time that a teenager becomes I was a teenager. These things are happening extraordinarily fast. And so you can create massive, massive, massive scale for totally radical movements that actually upend— I mean, we're talking internet scale. Facebook is 10, and it's a billion people. There's things that we can do now that we haven't been able to do before, which means that I don't think anything is impossible in terms of cooperative movements that get to real scale.

That's a good point. That's a good point. No. No, sorry. But you can bombard these people afterwards, unless they say no, and then that's up to them. So we're going to go Laurent right here, over here in the front, and then someone in the back. Yes, in the back.

Okay. Okay. I'm very glad that we're having this crowdfunding discussion. I come from a nonprofit in Montreal that's organizing to develop affordable student housing. We've raised $300,000 in seed funding and $1.8 million in equity to build. And out of this, the crowdfunding has provided us with a great total of $0. Why is this? It's because crowdfunding for us is a lot of work for every dollar. And also, we're not going to petition individual students to commit money, whereas it's a poor population in general. And this is something because the that's possible. It was possible to lend this money because in Quebec there's collective financial tools to fund collective projects at the movement level. And yes, they do have public money, and they do have credit union money, and they do have labor union money, but they were built out of a movement to create these collective tools. The next step is to pool demands to emit debts, kind of like what the Madeline system is, but it never relies on individuals with personal wealth, because that in a sense to us justifies any unequal wealth distribution. So instead of that, we create movements, we create collective tools, and we're talking 20 to 30 years of movement building. It's like, we're very privileged and we're very aware of that, but what I'm saying here is we've created the movement first, then the collective tools, then we petition for public money and labor union money, and now we have that. And the 1.8 equity that we have is not out of thin air. It's out of a student union that has been building economical capacity for 10 years. Year after year, collectively, instead of going for individuals to give voluntarily, they take 50 cents off every student every semester. That's affordable, but it gives collective power. So all I'm saying— and this is— I'm sorry, but there's no question in the end.

That's okay. No, I'm— yeah.

—financial system to not always depend on individuals.

And I think transparency is important. Like, if you try to like shoehorn a question by just raising your voice at the end of a section, it's like, no. Number 2.

So my question is actually where crowdfunding is actually turning into— I'm going to ask, just because you're so accessible, if you could Yes, so my question is about how crowdfunding is really actually— we're on the verge of what's really crowd investment and how it seems like a lot of people are really excited about this, but from a cooperative point of view, the kind of question is, do you see that crowd investment actually could really dilute what is already the power of cooperatives, which is to raise money through contributions from its members but that is actually crowd ownership. And that's the thing that we should be concentrating on the most. And that's kind of a statement and a question, but how much can we sort of— because this is happening at the same time that I feel that this big cooperative movement is going to happen. It's going to hit really hard, and there's going to be a lot of promotions about how great it is to now invest in everything. But crowd investment without crowd ownership is false.

Thank you. And the third, it's right over there. Yes.

Um, so I respectfully disagree with some of what Danny was saying about, say, old man, iron bedpans versus young bedpans. And that's in the context of developing a mobile platform which is for people that hold, uh, like, monetized babysitting clubs, things like that. Now Regarding funding, on one hand, obviously we're committed to kind of cooperative movement and I'd be interested in equity crowdfunding, something like that. On the other hand, something which hasn't been mentioned is— two things which haven't been mentioned. One is pool expertise that startups were looking for from high-quality VC funds, who is kind of a level of experience which is coming in from institutional investors, like BlackRock, on that side. And second, the structure hasn't been discussed, which is kind of the collaboration, eCorp. So how would the panel kind of see the relationship between private funding and VC And a B Corp, which is not that it's a workers' corp per se, but it's obviously democratic and it's—

Sure.

OK. So a couple thoughts and a couple questions. What do you all think? And we're going to— that was it for the questions.

But go ahead. I have a few suggestions. Yeah.

Maybe I'll offer something very light to start out appetizer-wise. Something that hasn't really been mentioned too much, I think, you know, sort of alluded to, is the idea of federation. Now, what you just mentioned, Felix, is that correct, Felix? Francis, pardon me, about the talent and the power that comes behind some investment. I want to also, again, bring up this group called Inspiral They hold a foundation together, these 30 small businesses, yeah? But there's also things happening in the Bay Area. The founder of Uber started a thing called Expa. Thank you. And what they are doing is the same thing. They're starting a handful of startups at a time and they're pooling their talent so that they can share a back office and have user experience researchers go out and do their thing. To help all of those groups together. So I think federation coupled with things like the Madeline system where that talent is on tap would get us farther ahead than just slotting in B Corp, which is mainly for auditing really and doesn't have a whole, how do I say, mandate for democratic ownership and control.

Yeah, so I wanna respond. I agree completely with what Danny said about B Corps. The other— B Corps do two things. I'm an attorney. That's the part of my bio that didn't get read.

Um, what benefit corporation?

Sure. So we have benefit corporations here in New York State. You can incorporate your business as a benefit corporation. It does two things for you. Requires you to get audited by somebody who is a certified benefit corporation Auditor tells your shareholders that if you decide to make them a little bit less money by cutting down fewer trees, they can't sue you. That's it. That's the whole law. There doesn't actually say more stuff than that. It's actually very short, and I invite you to go read it. Do not go to B Corp's website. Go to the New York Department of State's website and read the Benefit Corporations Law. It's not written in anything funny. That's why, you know, we make it kind of, I don't know, jivey. Look it up. Um, uh, wait, okay, so ownership. This is, this is the key point, right? Cooperative investment without a mechanism for community ownership of whatever is produced through that investment is total bullshit. Right? It is racist, classist, and actually how people have been consolidating wealth for hundreds of years. It's called capitalism, right? Like, take a bunch of other people's money, get— turn it into more money, then give that more money to the people who were smart enough to do this part. Come on, take all the shit. Come on, give me a break. So we're talking about real estate, and like, we're talking about very concrete things where ownership is actually something that's very visible. And so one of the requirements that we are baking into our platform— and it is a platform— is that any ownership of structures will never go to individuals. We will be incubating community land trusts accountable to the neighborhoods and have representation in their decision-making to hold these really public assets, right, that we're using— Mm-hmm. —crowd-invested public money to revitalize. What a community land trust does is it splits the ownership of the land, which really only has value because it's near other land, right, that other people— that people live on, and the ownership of the structure that maybe will be a community health center, that has its value based on what's actually happening there. Owning this, great, we can— this can flip, right? It could be a community health center, then maybe it becomes a food co-op, maybe housing becomes a real issue and maybe it needs to change. But owning the land and being able to capture that value, that has to have an accountability to the neighborhood. And if the land and the structure are owned by different organizations, there always has to be a conversation. And if the board of the organization that holds the land has some people on it who just don't have a self-interest, right, they're neighbors, and if they decide to sell the land, they don't get any of the money, then there will always be some accountability there. Many land trusts were brought to the US in the 1960s by Black farmers in Georgia to flip the power structure that was keeping Black farmers in Georgia from being able to stay on land and cultivate it. They have been appropriated really handily by housing activists, and we are expanding that idea to other assets in cities. Invite you to think about how we can work analogy in the world where you work, right? I'm talking about real estate, which I know.

Cool. But all right, well, thank you so much. You had the last word, Paula. And a round of applause for our luminary panel here. Thanks. That's it. Do whatever you need to do next.

So I have a car.