I’ve been thinking about an alternative to corporate organizations. Walk with me.
A corporation is founded. It has a mission: to make money. Ultimately, this is always the mission of a corporation. The question is, “How?” The answer: by helping a customer.
The corporation tells the customer, ”I’ll provide you value, and in exchange, I’d like money of equal value.” But to do that, the corporation needs hands to do the work, so they hire employees.
The corporation says to the employees, “If you create and provide this value to the customer, I’ll give you some of the money they give me.”
The worker is beholden to the organization, and the organization is beholden to the customer. That puts an abstract entity, the thing that’s not a person, between two people. That’s a problem. Customers have to go through red tape to have their needs heard, so the business is less effective. Workers have a hard time connecting to customers, but helping customers is their passion, so workers burn out. Lastly, it’s not clear why the organization gets any money at all. It appears to be arbitrage, leveraging an imbalance in the system. We can do better.
What if the organization were hired by the workers? The worker, we have to assume, wants to help customers. Sometimes, working independently works out great. Sometimes, the paperwork and administrivia makes it difficult. That’s a problem, and you can hire someone to solve it.
An organization appears and asks the worker, “Would you like me to take some of that burden off of you? I’ll provide the legal structure for your work, I’ll give you a place to work, and I’ll locate you with other people doing the same kind of work so you can all help each other. In return, I’ll charge you a fee for the value I’m providing.”
The organization is beholden to the worker, and the worker is beholden to the customer. This puts the humans, the worker and the customer, next to each other, where they can collaborate cooperatively. The organization, meanwhile, is charging a fee for a service, just like the worker. If the worker does better work, the worker can make more money. Only if the organization makes life easier for the worker can the organization make more money.
This is the coworking model, relabeled. People in coworking communities are independent workers who pay a membership fee to gain access to the features of the community and space. The coworking organization makes money by facilitating the work of its members.
This is also largely the Valve model and the GitHub model1. And it’s sort of the co-op model. But I’ve never heard it described in these terms, exactly.
Surely this already has a name. So what is it?