I hired a cheap startup cleaning company (an internal startup within a larger organization). Flaky, unprofessional management; cleaners who sucked at their jobs... going by my and my friends' experiences, finding a good cleaner is pretty hard and (this is a big 'in general') the more expensive ones are more reliable. Information, quality assurance, and good management are all scarce--a lot scarcer than most people tend to assume--and cost money.

The other part is that the employers aren't "extracting as much surplus value" as you think from the sell side either. For instance, most programmers are content to work for the Man, losing significant amounts of "surplus-value". Independent contractors appreciate the freedom, the money, the flexibility, the power to say no, but it's not for everyone, because managing yourself is also a giant pain in the ass for a large number of reasons.

Finally, I think you're being down voted because all this is probably common knowledge on a forum for smart, startup-minded hackers. When you talk about "extracting surplus-value" there are prominent members of this community who do that for a living.

Is it a disease? :)

Did you mean communism?

> Information, quality assurance, and good management are all scarce

I acknowledge that. Read my comment below - these skills are picked up on the go by startup founders, the same way those in a cooperative could. Professionalism is unrelated to having one head or twenty at the top.

> For instance, most programmers are content to work for the Man

Most workers in any field are "working for the Man*, not just programmers. The adoption of the agency model varies across the economy, but is less common as you go higher (think doctors, lawyers, architects, etc). We could get into a yearlong discussion about distribution (or concentration) of wealth, but I don't think this is the place and I'm not that qualified.

> I think you're being down voted because all this is probably common knowledge on a forum for smart, startup-minded hackers.

Isn't almost everything common knowledge in a community like this? I don't think that's the reason, downvoting for simply disagreeing is becoming increasingly common.

> When you talk about "extracting surplus-value" there are prominent members of this community who do that for a living.

So? I'm not picking a fight or attacking anyone, just musing on capitalism. Is it taboo? I'm sure they don't feel the need to justify what they do.

>I acknowledge that. Read my comment below

Well, your surplus-value is everyone else's value-added. There are probably more efficient ways to do things in the information age. I'd like to see a smart bunch of hackers disrupt the maid service industry. But I don't think the current method is unjustifiable and I don't think it's correct to question someone doing things the old way in a good way.

On the other hand, there are also prominent members of this community who focus on recognizing cases of surplus-value-extraction and thinking about how to disrupt/disintermediate those markets. :)

From what he says, it looks like he gets $40 to $60 per job, whereas cleaners get $15 to $30 per job -- they work in team, so it's $30 to $60 in total (it's all pre-tax, from what I understand). Not a terrible arrangement, to be honest, especially in the Land Of The Free From Socialism; apparently this is much more than what they used to make when a big company exploited them.

I do agree however that the IRS will kick the shit out of him if he doesn't switch to proper employment asap, and that's how it should be: it's all fun and games when things go well, but when hard times come (and they will come) the workers should get some protection.

edit: what is with downvotes lately? This is not a contest, feel free to join the discussion.

You can't seem to understand that 1000 workers doing 'their' job may be hundrends of times less productive than doing the same job under the same company. Lots of things (machinery, know how, etc.) need a company and a capital.

Finally, I also don't understand discussing capitalism. Here we are discussing freedom for individuals to work and to create a start up. What would you rather do? Force everybody down the same principles? Not sure it's right.

Sure, being contractors might not be ideal for them at the moment, but they are the first 8 employees at the company. There are additional benefits to being in that situation.

In addition, we have no idea how much they do or do not understand their employment status. It is convenient for us to jump to the conclusion that the employees are ignorant about tax law, but that very well may not be the case. Just like in any other service industry, there are plenty of educated and informed workers in the mix, especially when you start looking at those that tend to excel in that particular field (he did say he now only hires top notch folk, after all).

I guess what I'm saying is, the discussion about W2 vs 1099 in this case is both valid and valuable, but let's not jump to any conclusions about who is exploiting whom.

Pardon my ignorance, but what "exploitation" is being discussed here?

However, they are going to this company by choice. They can choose to leave. They also agree to the wage. In addition to all of this, it's not easy being an independent worker. If anything, the small company is preventing them from getting exploited (they don't have to worry about chasing down a paycheck from each individual client, marketing, etc).

Finding clients is just as time consuming as the actual work itself. I know, I've done it myself as a freelancer.

Yes the cleaners are probably not doing anything differently than they normally did. BUT:

-the cleaners had problems finding clients -clients had trouble finding good cleaners

If you've ever tried to find one of these folks, it's a total PIA. Basically it involves asking your friends or posting to craigslist and then wading through a bunch of crap. This is easy - find and pay online!

If you're against "extracting value" here, you should also be against grocery stores. Surely they are robbing the poor farmer by linking buyers and sellers?

I imagine that as the profits do rise, then this guy will have to spend more money on fixing all the issues that the other comments mention. He is also on the hook for things like damage and theft. I'm guessing his workers would rather just do their jobs, get paid and leave the rest for someone else.

Why do you assume that? There are plenty of people doing those kind of jobs who can't read or can't handle basic arithmetic.

It's not a given that they'll be able to set themselves up as this guy has done.

Our teams do certain things well:

Cleaning, organizing, and having a nice friendly presence that makes clients want to have them back in their home over and over again.

I do certain things fairly well:

Managing web design (I feel like i have a fairly good eye), writing web copy, client acquisition (adwords, twitter), finding ways to adopt high-tech practices into low tech industries (I think we're the first cleaning company with an actual affiliate program), SEO, branding, and a few extra things I can't think of now.

I'm not great at any of these things, but I feel like I'm at least competent at many of them.

I don't have the skills they have. They don't have the skills I have. We both realize this and figured we could work together and benefit each other.

I'm not so sure about it either, but I have a tendency to be a bit idealistic :)

If everyone was well educated and had the means to set up a business they wouldn't need someone else to seize the opportunity for them. The whole startup spirit is that of getting down to build a business, learning as you go, and I think the same applies to cooperatives. It's joining forces with your peers.

And this is just how most startups are born: two or more co-founders with a fair split, employees get equity etc. Why is this different?

I'm happy working a job right now too, just dreaming.

Yes, this is called the division of labour. When not everybody has to know how to do everything, more things can be known and more things can be done.

Making a marketing plan and a website sounds easy to you, but why don't you argue that they are being exploited by the vacuum cleaner or detergent manufacturers' economic and knowledge advantage? Probably because designing and building a good vacuum cleaner or formulating an anti-allergenic organic cleaning detergent doesn't sound easy to you.

btw I have a Communication Studies/Advertising degree and work as a front-end developer, so no, that doesn't sound easy to me ;)

Building, marketing and running a company is a different specific skill set.

How is that not division of labour?

> so no, that doesn't sound easy to me ;)

Presumably a lot easier than building a vacuum cleaner.

If I had the means to build a vacuum cleaner (not that hard, you know software can be way more complex than that), but instead sold my project to Dyson, because they have the means to produce and market it, yes, I'm setting myself up to be exploited. It's an option. (drifting off-topic, but crowdfunding is changing that too)

Also, where is the evidence of exploitation? Does this guy make more money than he would if there was profit-sharing? Paying a salary is profit sharing.

This sounds strangely familiar...

[1] http://www.npr.org/blogs/money/2012/01/20/145360447/the-secr... [2] http://en.wikipedia.org/wiki/Park_Slope_Food_Coop

Upon reading the articles: that NY coop seems fairly successful, but the closest to that model around here is a just-opened Sam's Club :) You seem to have misunderstood the article on China: what made them successful and more productive was precisely working as a collective while being fairly compensated. Cooperatives have nothing to do with communism.

They are subcontracting those skills out to the person who is marketing and getting them the jobs.

I saw a comment here months ago that said something like "I treat myself as an independent contractor, I just sub out all the work like getting clients/projects, taxes, billing, collections, hr and management to other people (my company) so I can focus on development". I've liked that mentality, and try to get others to think that way. Even if you don't adopt it, it's an interesting perspective.

This guy took the risk of starting his own company and has literally created 8 jobs that did not previously exist in our economy. The 8 people that work for him are better off than they were before (otherwise they wouldn't be working for him).

However it sounds like the IRS will eventually come in and destroy those 8 jobs, all in the name of 'protecting the workers'.

Also, there are problems with coops. They tend to be inclusive, hoarding jobs for the few who get in. They tend to drive up prices for the work they do, destroying some amount of value across society as a whole. (basically the same problems as with unions).

This one man will be able to offer more jobs and provide better services to more customers than any coop could ever hope to provide. That is why he gets paid more than his workers.

No he didn't, he's hired maids who would otherwise be maids for someone else.

> The 8 people that work for him are better off than they were before

Because he's not doing his taxes right and paying them more, he'll get caught and eventually have to pay them less.

> However it sounds like the IRS will eventually come in and destroy those 8 jobs, all in the name of 'protecting the workers'.

As they should. What's he's doing is unfair to other maids who work for legit companies and are paying taxes correctly. It's also unfair to his competition who plays by the rules he's ignoring. 1099'ing them is cheating, they are employees.

But now the company they came from has to hire 8 new maids. If his business model is superior, he may eventually drive the old company out of business and employ at least as many maids as they did. Even if he only employed the same amount as the old company, he is providing more value to his customers, either through increased efficiency or lower costs. So even in the case of there being no new jobs created, creative destruction has again moved our economy forward.

Judging by how fast his first maid came to his company, I doubt he pays them less (I didn't see him mention this).

I don't think you can really argue that this adds no value to the transactions - he is finding these cleaners more work than they would otherwise have had.

and more. It's a lot more than just, hey you make X, I'll charge X+$45 and we'll all be happy. I had to build entire systems around delivering top notch service to justify raising our pricing points and creating premium experiences for the client.