What makes a co-op different than a startup. Guide to help you decide what company to start.

What makes a co-op different than a startup? Perhaps you've done your own research a bit into cooperatives, into startups, but not sure which one you should choose. Well, in this video I break down the 5 main differences between a cooperative and a startup. And as someone like myself who spent a lot of my life starting startups and spent actually the last 6-7 months researching cooperatives, I'm in a unique position to provide a clear idea what the differences are between a cooperative and a startup, and hopefully I'll make it really simple for you to follow along. Hey guys, it's Vivek from Mindtome once again, and today I'm excited to share the differences between a cooperative and a startup. What about you guys? What do you think about starting? Why don't you think about it for now, whether it's a cooperative or startup, and by the end of the video, once you've learned a little bit more, perhaps you can let me know in the comments below if you've changed your mind or you're sticking with a cooperative or sticking with a startup. I'd love to hear about it. So number 1, owners versus founder. In a traditional cooperative, there's usually much more owners, worker owners, or in some cases multi-stakeholders that control and direct the business. Versus a traditional startup, there's usually one or two founders and maybe an investor or so that provide most of the direction for the business. So in a cooperative, it's about a team coming together, a group of individuals coming together, no superstars, rock stars per se, but more as a group coming together around a common vision to build something and to own it and to see it come to life. Versus in a traditional startup, there's usually one or two founders, maybe an investor gets involved that has a strong vision and kind of pushes it forward. And they continue to lead that company long into the future. Future, you know, whether it's 2, 3, 4, 10 years into the future, those initial founders are usually the ones that are directing that business. And with that comes also a lessening in control of the founder versus the owner. So in a traditional startup, founder has a lot of control, a lot of direction on where the business goes. In a cooperative, it's about coming together around an agreed-upon vision early on in the business and and taking the input of all the different owners and stakeholders in the business and, and using all that input from those different people to direct the business on where it goes. Number 2, growth. A traditional startup is really known about being a fast growth vehicle, about providing a high return on investment to the investors in a startup. And that can also come into the effort and time put into a business. So if you're a founder of a startup, your expected return is supposed to be very high in a startup. That's by definition. But in a cooperative, while there can certainly be growth, and at times may even be very high-speed growth, that isn't the primary focus of a cooperative. The primary focus of a cooperative is usually the mission that the group comes together behind. And so usually growth in a cooperative is much more sustained. It's more focused on the business growing in a logical way that feels comfortable to the owners of the business. While high growth may sound good, long-term this is not sustainable. It's never sustainable to be able to grow continuously quarter after quarter, year after year indefinitely. And that's why you always see in traditional business economies and traditional businesses cycle of up and down, up and down. Well, versus a cooperative where growth can be more sustained because there's no investors that are demanding that you grow 2, 3, 4, 10% quarter after quarter or year after year, and instead the worker owners, the people within the company, deciding how fast they want to grow. And even if they don't match their expectations, there usually isn't much consequence because as long as the owners are making a salary and making a living wage, even if they don't get a surplus from the year before or the quarter before, they're generally fine. So growth in a traditional cooperative is much more sustainable, maybe not as fast, but often much more sustainable than a traditional startup. And there's examples of this everywhere. Every quarter you see big companies like Amazon or Tesla or Apple and they have to meet these expectations of investors or analysts. And even if they grow a lot, but they are off, you know, in terms of growth, 1 or 2 cents versus what analysts' expectations are, the stock price of that company can crash. Versus a traditional cooperative where, yeah, the worker owners might have an expectation or a hope that they're going to grow at a certain pace, but if they don't hit it, it's usually fine because They own the business. They were making a salary this whole time. And yeah, they didn't grow as much as they hoped. Okay. And they'll reevaluate the business, but they're not going to shut down. There's no stock price going down. There's not people freaking out or losing their jobs. Usually. Number 3, more protections for workers. In a traditional worker-owned cooperative, the owners of the businesses are the workers. So they are going to be looking out for their interests as well. And they're not gonna ship their own jobs off to a cheaper country just to match some growth expectations. Versus a more traditional business, if they need to save some money or, you know, costs are for whatever reason more getting higher in this country, they might actually ship their jobs to somewhere else cheaper because they need to save money to match investor expectations. So in a traditional cooperative, there's definitely more interest around workers and making sure to provide consistent long-term growth, or consistent long-term jobs for the workers. Number 4, money. And that breaks down to 2 different things. So the first thing is the financial reward. So in a traditional startup, the financial reward usually gets spread out between the founders and investors, maybe a couple key initial individuals. In a cooperative, on the other hand, the financial reward for that business gets spread out to all the worker owners of the business, whether you're one of the first people who started the cooperative or a more recent member of the team. The second component of money is who you get money from. So in a traditional startup, there's sophisticated investors that are looking out for startups and businesses to support. VCs, they're usually called. In a cooperative, those type of individuals don't usually invest in cooperatives because there's not that high return of investment for them. So you have to find different types of people to invest in a cooperative. Usually it can be, you know, angel investors, smaller individual investors, it can be credit unions or different types of banks, it can be perhaps foundations, it can even be government organizations as well. The money one's a hard one, I know. The greedy side of us definitely wants to take as much money in for ourselves. I've definitely thought about it myself. But as a cooperative, you get to spread out that wealth and still make a good living wage. And fifth and final difference: slower to start. So a cooperative is a bit slower to start, I would probably say, because of the nature of a cooperative. Requiring to coordinate, to cooperate with other individuals and not just go out and start your own thing. It requires a little bit more coordination, it requires bringing together a bunch of people around a common vision, not just your own vision but a vision that the team comes together around. And so that takes a little bit more time, but once you're you have that vision together, you have some of the rules about how to work together, a cooperative can move very quickly if it decides to. So what about you? Cooperative or startup? What and why? Please let me know in the comments below. I'd love to hear what perhaps you're thinking about and what of the different arguments I mentioned convinced you. And just as a quick recap between the differences of a worker-owned cooperative and a startup. So, owners versus founders. Number 2, growth. Number 3, workers' protection. Number 4, money. And lastly, number 5, slower to start. Hopefully this video was helpful in clarifying the difference between a cooperative and a startup and answered some of the questions you might be thinking about the two. If this video was helpful, please consider giving it a thumbs up. If you're interested in cooperatives, definitely subscribe to the channel. We're going to be doing a lot of videos related to it. And definitely share the video with someone who you might think might benefit from learning more about cooperatives versus startups. Thanks so much for checking out this video. Have a great day. Take care.