Interview with Yochai Gal of the Boston TechCollective
* Interview: Yochai Gal, Boston TechCollective.
Yochai Gal has been instrumental in founding two worker cooperatives: the San Francisco TechCollective, and more recently, the Boston TechCollective in Somerville, MA. ... Recently, the two TechCollectives and C4 Tech & Design in New Orleans have partnered to form the Technology Cooperative Federation as a purchasing cooperative, allowing them to compete in purchasing power with larger private IT companies and corporations.
Interview conducted by the 'Socialist Entrepreneur' blog:
- On a related theme, you also said in a recent interview that it is actually easier to start a business as a cooperative group, rather than as a sole owner. What are some of the advantages to starting a business as a team of worker-owners?
As I mentioned before, creating a business as a worker co-op is a shared experience; you never feel completely alone – you have a group of (usually) like-minded, committed individuals right there with you. Their shared resources, skills and experience makes the process of starting a business unlike anything I’ve ever encountered.
There are more practical reasons as well – taking out a loan is a bit easier if you have a wider range of personal credit to lean on. There is also the concept of the buy-in: each worker upon becoming an owner must pay an amount, ranging from $50 and up every paycheck, until the agreed upon amount has been paid. A $3,000 buy-in ensures seriousness in the business, creates equity, and increases over time – so if a worker eventually leaves (as I did) they will receive a chunk of cash greater than they put in. The obvious question is: how does one pay this amount if they have no money? We do not require the full amount right away – in fact you are not required to pay anything until you receive your first raise. The worker can pay as little or as much as they like. This process is a great litmus test for finding good employees! Another strength of our model is our open-book approach to business: all employees know the financial situation, and are empowered to make decisions “as a boss” when they need to. Workers are working to benefit themselves as well as the business – it is built-in! Further, a traditional business would typically ignore any good ideas non-owners had; at a co-op all voices are given a chance to speak – and the business benefits. Voting itself is a useful tool: I’ve been wrong about many, many things – and when I was overruled and we went a different way, I could see that fact. But if I were the sole owner, I would have only found that out the hard way!
There is another tangible attraction for new personnel (an advantage in my eyes): the patronage model. If at the end of the year we are profitable, our bylaws stipulate that we may take 75% of our profits (the other 25% is working capital – an idea from Mondragon) and distribute them amongst our employee-owners; in many states this is untaxed income! There are a few other business-specific benefits I could mention (though they aren’t very interesting, I think). For example, many co-ops are formed by immigrants that use the LLC model: this allows them to hire non-citizens and pay them – legally. It also employs a similar method for patronage (returns) as a cooperative corporation/employee cooperative.
The second co-op I formed received a loan (line of credit, really) from the Cooperative Fund of New England. Obviously we would not have been able to receive this loan (or the many, many grants we’ve applied for) had we not been a democratic workplace! If that’s not an advantage to starting out over a traditional business, I don’t know what is! We are part of a larger movement that help one another; we share resources, trade work, and connect in the most equitable fashion imaginable. Our co-op could not exist without the larger movement.
People sometimes say things like, “What about the geniuses, the Steve Jobs of the world – don’t they need to be “in charge” and dictatorial to do their great works?” And to that, I say, “What about all the rest, the regular workers who are given no chance to have their ideas heard, to join in creation?” How much have we as a society lost out on as a result of how we do business? A co-op is thus made stronger as a result of our model – both as a business and as a part of the community. We will never outsource ourselves, we will never poison our backyards, or allow one of our own to do so. We create workers that take democracy to the workplace – where we spend the majority of their time – and apply it elsewhere in their lives – it empowers us to grow and stand tall; I definitely see this is an advantage and benefit." (https://thesocialistentrepreneur.com/2015/12/07/yochai-gal-boston-techcollective/)