2017/09/09 16:30 Evan Henshaw Plath, “Building Platform Coops”, Disrupting the Disruptors

Plenary @rabble @CoopsCanada #platformcoop, platformcoop.ca/, Bram & Bluma Appel Salon, Toronto Public Library

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[Evan Henshaw Plath], Affinity Works http://www.affinity.works/

Evan Henshaw Plath, Affinity Works

What we’re doing is not new, it’s a constant process

Have been working in social change and startups since 1995

  • Software developers for 35 years
  • Active in dot-com boom, dropped out of college
  • Got into activism, went to Seattle to start IndyMedia
  • Started some software development startups, started Odeo (which is the news works of Twitter)
  • Twitter was an accident:  text-based social network for text mobs against Bush
  • Odeo was crushed by Microsoft, so made text app for more than activists
  • Worked in Yahoo internal skunk works
  • CTO for Digital Garage, redesigned Singapore immigration
  • Most recently working in Boston area on platform coops, tried to get MIT students to collaborate

Need to build a platform coop myself

  • First, decided to get a Canadian passport
  • What’s missing?  Didn’t bridge online activism with offline activism
  • Knowing activism, how they share with each other (with encryption, and privacy sharing)

Started Nov. 9, 2016

  • Now have some activist groups, and the Icelandic Pirate Party
  • Colorado coop, open source
  • Got a lot of funding rejections, fell into a hole

Talked to Jack Dorsey, said Trump is partially your fault, he said okay

  • Also got money from founder of Github
  • Got money to build MVP
  • Google offered to acquire, before building, and then again after building

Funding by users?  Problem, only 4 users

Could request donations

Could crowdfund

Coops are 170 years old, sometimes work

  • What’s new:  capitalism running on digital platforms

Platform startups are different

  • They’re about market creation: the goal is to operate the space in which the marketplace operates
  • Digital is only part of it
  • They call it new capitalism, but only a variation on what has been before
  • Who rents AirBnB?  Mostly older women, who are locked out of the current economic system

Future of work, all contractors, all flexible

  • It’s also precarious work:  need 5 stars to be superhost

Technology has disrupted how markets work

  • New businesses emerge, and capture markets

Used to have jitneys, creating own routes (1910s, 1920s) dominating transportation routes

  • Replaced with buses, taxicabs
  • Then replaced with private cars
  • Uber is jitneys on digital platform

Value in the market

  • Market creation is hard, takes work and luck
  • Owning it seems ephemeral, but it retains power
  • e.g. Craiglist has changed little over the year
  • Yet Craigslist will get replaced with Facebook, as greater social trust, taken decades to replace one durable market

Technology platforms have rules, difficult to maintain

  • Successful open source platforms, easy to ignore what it takes to operate
  • In Ruby on Rails community, no one talks about the money, developers work for companies that benefit for the common platform, and then developers get work by contributing to the commons

Platform coops aren’t trying to be like other businesses

  • Platform businesses aren’t like Facebook, as ad-driven
  • Running a marketplace

At Affinity, connect local advocacy groups with national and international groups

Markets are valuable, but it’s hard to put value on that

  • What to collect for tax?

Markets regulate

  • Renting on AirBnB, level of vacancy, etc., determines how I make money
  • They can decide on rules that seem crazy if let out
  • Market regulation is important, in what we advocate

Marketplace:

  • Can’t just say Uber drivers are being exploited, you have to get the passengers; need to get both sides

When AirBnB started, their listings were fake: they found Craiglist rentals, and went onto AirBnB

  • They faked both sides of the marketplace

This is why Uber started with hiring limousine services

In startups, we fail a lot, need to create a culture that is connected

  • That’s why VCs need 10x or 20x return
  • Had friend who almost bought Facebook for $1M
  • When Twitter was launched, after it was built, RealNetworks offered $1M when there was $3M in the bank account, Apple, Google all rejected
  • All businesses fail a lot

Coops funders are careful, because they implode

Platform coops are building a marketplace

  • They’re not academic projects, to have impact in the world
  • Trying to build out of a student project, as out of semester, the workers were hard to match
  • Have to look at structures, organizations that are different
  • Has to be entrepreneurial
  • Need people who see blue sky when it’s pouring down rain

Have some people we can pull in:  social entrepreneurship, not just interest in return on capital

In Argentina, 30,000 coops founded from failing businesses

Who is the competition?

Win by capturing the market or creating a different market

Uber is a horrible company

  • Yet Lyft has been unable to compete

How do we innovate?

  • Student projects, don’t work often
  • American system: Silicon Valley is successful, creates a $1M per month every month for the past 40 years, design thinking, learning, pivoting
  • Rocket Internet:  Turkish brothers as German company, copycats of the Internet world, have people in Silicon Valley following, then launch in as many markets as possible
  • Chinese Tech:  Chinese Internet conglomerates, when they want funding, they put it all into the same space, e.g. 6000 Chinese companies (unlike Silicon Valley that says to quit and go to VCs) all compete and then sort out whose wins
  • All of these markets have the failures
  • Rocket Internet is the most like Mondragon, highly structured

ESOP converting businesses, where a lot of owners aren’t opposed to employee ownership, but they don’t have a model or idea of someone exiting, nor a funding structure for funders and capital to come in on venture-backed startups

Two ways of thinking of Internet startups

  • Legal control, where it is incorporated, e.g. in Colorado, that’s where lawsuits come
  • Otherwise, evade legal structures with blockchain, e.g. ICO Initial Coin Offering, to build something; $600M per month going into these

Problem with blockchain:  governance by algorithm

  • Human governance too hard and corrupted, so will go around with who has the coins
  • Democracy replaced by who owns the coins

There’s something there with bitcoin, but it’s something that is encoded:  economic transactions

  • But just replacing old oligarchy funds with new ones who like drugs

We have done this before

Agricultural Marketing Cooperatives:  restructured the way farms go to market

How do we want to structure the economy?

  • Free versus regulated
  • New markets, what are the options?  Democratic? Cryptographic? or Privately Owned?
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