We wanted to found a collective of programmers and admins in the 90s, because we all felt cheated by companies for money and didn't like company politics. From around 50 people it slimmed down over a year to 3 during discussions and legal work - and the 3 of us then founded a startup because it showed others were not really interested in a collective idea but 9-5 jobs that brought in consistent money.

I don't know what to take away from that. My impression was they would like to work for a collective but not found one perhaps.

I was always amazed by

https://en.wikipedia.org/wiki/Mondragon_Corporation

Sounds like a common case of loving the idea of something but not having the will to carry it out. That's most of humanity in my experience. People, even experienced tech professionals are far more likely to bitch about a problem vs actually taking steps to solve it.

It's like people who will bitch about how lousy customer service is at company X, but if company X raised the prices on their products by $1-2 to hire full time customer support staff, those same people would take their business elsewhere. So really they don't want better customer support, they just want the genie to grant wishes.

3 out of 50 people actually serious about solving a given problem fits pretty well with my life experience. :P

> 3 out of 50 people actually serious about solving a given problem

That seems high.

About 20 years ago I first heard about co-ops, and I thought it was a great idea. So I literally bought every book on the subject that I could find (spent many hundreds) and read all those books. There is a long and rich history of co-ops worldwide. My take away: Most co-ops end up either failing or replicating a power hierarchy - with workers on the losing end. Very few avoid that end, and those that do are those that either exist in markets where they don't have to execute perfectly (such as many successful businesses today) or those that figure out some way to cultivate leaders who make good business decisions (giving them a market advantage, and again letting them operate without exploiting their workers.) In other words, markets still operate as markets, and force business to operate in particular ways unless they can create what are sometimes called "effective monopolies" (based on regions or differentiation or some other advantage). I've become convinced that we need to change the way markets compete if we want any real change.

Agreed. The root of the problem is that exploiting workers can - and usually does - give one a competitive advantage. If we can somehow fix this, the entire problem will solve itself.

Are you accounting for the benefit to workers of not having (some) authority? Decision-making itself can be extremely stressful! Ceding authority to someone else also relieves you of the associated responsibility and that can and probably does have significant benefits e.g., psychologically, emotionally.

Consider a pretty analogous industry – musicians, musical artists, etc. I've noticed that a lot of 'bands' I like are really 'dictatorships' run by a single highly-motivated artist that recruits other musicians to act as 'employees' to realize their, the dictator's, vision. It doesn't seem inherently bad to allow people to be employees.

Regardless, it seems impossibly to perfectly negate any advantages (or disadvantages) of "exploiting workers". I think a better vision is to help and encourage everyone to become more 'powerful', e.g. more skilled, wealthier, open to more possibilities. But I also admit I don't have a plan to prevent the already-powerful from becoming more powerful themselves, and at a faster rate than everyone else. I'm still undecided whether that's generally good or bad. Perhaps it's (effectively) undecidable!

I agree. IMO, the problem is not that companies aren't made of equals. Hierarchies serve a valuable function. The problem is that the lower bound of how much the bottom of the hierarchy can be abused is far too low. I don't think we need to abolish hierarchies - just raise the floor.

Isn't it more of a game theory situation? If your competitors exploit their workers and you don't then you will be too expensive?

Yes. That's exactly what I meant by referring to competitive advantage.

> Are worker self-directed businesses truly not viable?

I think that's it. There's nothing stopping us from making such corps. I'm sure it must have been tried multiple times in history. The fact that no successful company like this exists probably means the concept is unviable.

As to why, that's anyone's guess. Maybe any org without a single-minded purpose is doomed to fail. Maybe if our arms and legs had a say in what we do, we wouldn't survive. Maybe that's the reason millions of years of evolution has turned out a body with a single organ controlling everything else.

Here's a list of worker co-ops:

https://en.wikipedia.org/wiki/List_of_worker_cooperatives

Self-directed businesses are totally viable - until they need funding. Then any approach to possible investors is likely to be met with "Ha ha ha ha no."

We simply don't have a culture that supports non-hierarchical businesses. There are no role models in the media, hardly anyone has personal experience of a working in a co-op, and most of the population doesn't even know what a worker co-op is.

Wall St and VCs are implacably hostile to any business model that gives workers economic power.

Given those challenges, the fact that successes still exist suggest the idea has unexplored potential.

You seem to be assuming bad faith in place of a more likely explanation.

Various models of funding are predicated on taking equity, either directly in exchange for cash or as collateral for a loan. The problem is that as soon as you issue equity to investors, the business isn't worker-owned (and, crucially, worker controlled) anymore, it's (at least partially) investor owned.

It seems to work when it starts as a benevolent dictator taking care of employees. I like examples with razor-thin margins since they show the rest could probably pull it off:

https://www.forbes.com/sites/briansolomon/2013/07/24/the-wal...

It's more a right mix between worker's ideas and worker-approved management, though, instead of purely worker-directed. Same happened with Ricardo Semler's company that was even more radical.

Communes exist, and people start them regularly. Unfortunately, they tend to be unstable and disintegrate. The most famous one is probably San Francisco's "Summer of Love" in 1967. It lasted just a few months.

It's a stretch to describe the Summer of Love, even just in San Fransisco, as a commune. If anything, there were many communes that existed or maybe started in that time.

Not a stretch at all. There were organized efforts to provide free food, clothing, shelter, health care, and entertainment. People were encouraged to contribute what they could, or nothing at all, entirely up to them. They thought they were building the perfect society.

Probably similar to herding cats – too many opinions and too many directions to get pulled in. My girlfriend worked in an artists' co-op with equal share and high level of democracy. Everybody's ideas are always great so as to not to hurt anybody's feelings and if anything needs to get done, it takes weeks of roundabout talk just to end up with a monstrosity full of compromises.

I guess there needs to be some degree of hierarchy, just like with state elections, to constrict opinions and epitomise the main idea so there are not too many cooks undoing each other's work.

> Why do we not leave the top-down run businesses to form cooperatives where we collectively define our own roles?

Founding a business requires considerable access to capital. Investors are less likely to invest in an unusual coop structure than in a bog-standard company. Workers may have to pool their own resources to found the company, which means that they are risking their own financial assets.

> Founding a business requires considerable access to capital.

Not necessarily, especially not with software.

Can you give an example (business -> success in software) without outside capital investment? Most of the time the sequence is software -> success -> business, and the event chain is exceedingly rare.

Fog Creek, 37 Signals, GitHub, Mailchimp, WooThemes, AppSumo, Grasshopper...

There's a very well worn path from consultancy -> productized consulting -> success in software or day gig -> side project -> success in software. Patio11 bangs on about it incessantly, because he's completely right - the majority of HN readers are more than capable of launching a successful SaaS business without quitting their day job or taking a huge lump of VC.

I'll agree to disagree. For example, github certainly did use a chunk of capital.

Tom Preston-Werner, Chris Wanstrath, and PJ Hyett spent quite a bit. You may not care about the amount here on YC, but it's a non-trivial barrier, regardless.

Sure, the problem is always the idea. I don't know how many more times someone can make another bingo card maker or time scheduling system and have it still work.

Maybe you only consider as "software business" the kind of "software businesses" of VC fame today, like Facebook, Google, and the tons of web based ones, where huge investments are needed for the scaling and infrastructure?

I think the parent has in the mind the more traditional (but still widely present outside the VC echo chamber) model of a company writing some software package and selling it.

(Of course some people don't believe making $5 or $10 or $100 millions a year, as successful such companies do, qualifies as a success, but that's another story).

My own companies (Zortech, Digital Mars). Id Software. I believe Microsoft borrowed $5,000 (outside investment, but it's not remotely "considerable").

Saying “my own companies” only proves my point. You are risking your own personal assets only, while a coop structure would involve risk for everyone. Furthermore, you are founding a small business that you hope to eventually grow in some direction. That is very different from a whole set of workers founding a business where they wish to continue doing the same work they were doing before, only on a coop basis.

>You are risking your own personal assets only, while a coop structure would involve risk for everyone.

That would actual make risks smaller, as the investment and risk is spread across more people.

>Furthermore, you are founding a small business that you hope to eventually grow in some direction. That is very different from a whole set of workers founding a business where they wish to continue doing the same work they were doing before, only on a coop basis.

That's both not accurate (in the first part) and a shifting of goal-posts.

Who said Walter founded a business to try whatever and "eventually grow in some direction"? He had specific things in mind for the business to do, and pursued those.

Second, and inversely, who said people doing co-ops are against pivoting and trying stuff? That they "wish to continue doing the same work they were doing before" is a new, arbitrary, constraint.

Heck, people could start co-ops a) without having worked before, b) with people from different backgrounds, where the "same work they did before" doesn't apply, c) with people wishing to do something different than what they were doing before, not just with a different organizational model (e.g. build software of type X instead of working on mindless features upper management demands).

I'm sure you can talk yourself into believing it cannot be done. Heck, with my companies, I was universally told it was not possible for me to do them.

Especially in software. See how much Uber, Airbnb, Facebook, Google have raised.

> o form cooperatives where we collectively define our own roles?

This is attempted in organizations that have a flat organization. The problem with that, eventually it forms a hierarchy based on the most agressive and most bullying.

These things don't happen on accident. Somebody has to take charge, and whoever does is likely to want a disproportionate amount of power and wealth for doing so. And then they just set up a traditional business.