We are diving into a multi-month series centered around relationships. Our relationships with our businesses, our relationships with our communities, and our business relationships with other businesses It is not as simple as our interactions; often times in the business world, a relationship is essentially defined by anything that interacts with one another. I want to center the idea and the conversation around relationships through the lens of ecosystems. If you're in a relationship that does not produce its own ecosystem and the primary interaction is about monetary value, then you are not actually in a relationship. You are in a transaction.
I am kicking off the conversation by talking about our relationship with ownership and business ownership models. And in what ways can we explore non-traditional ownership models to start better-practice generative businesses? The ownership model we know right now is based on either "I'm a solopreneur, and I own everything; I'm an LLP aluminum liability partnership," or I share ownership in exchange for funding and venture capital. Well, we're going to look at ownership. with how much money a business puts into something, it again centers on our relationship with the idea of ownership.
It's getting easier to make a difference in the world thanks to innovative new business models. Non-traditional business models that practice generative business are becoming increasingly popular as people look for alternatives to traditional capitalist models. These models prioritize the well-being of all stakeholders, including employees, customers, and the community. Worker-owned models are particularly popular, but there are also other generative models that prioritize social and environmental impact. By embracing these models, we can create a more equitable and sustainable economy that works for everyone.
1. Worker Cooperatives
Employees run and own businesses under the name of “worker cooperatives.” Each employee receives an equal share of the company’s profits and a voice in decision-making processes. particularly prevalent in the manufacturing, food service, and agricultural sectors.
One example of a successful worker cooperative is the Mondragon Corporation in Spain. Since its founding in 1956, Mondragon has expanded to rank among the largest cooperatives in the world, employing over 80,000 people in various sectors. Mondragon is distinctive in that it functions as a federation of cooperatives, with each cooperative operating separately while still upholding shared ideals and guiding principles.
2. Employee Stock Ownership Plans (ESOPs)
Employee stock ownership plans, or ESOPs, are when workers own parts of the company they work for. It’s a cool way to motivate employees and ensure everyone’s on the same page. Plus, if the owner wants to retire or sell, it’s an easy way to hand the business over to the employees.
One example of a successful ESOP is Publix Super Markets, a Florida-based grocery store chain. Publix has been 100% employee-owned since 2016 and has consistently ranked highly on lists of the best companies to work for in the United States.
Another example comes from one of our founder friends, a sommelier and cocktail expert, who co-founded Cecily’s, a soon-to-open restaurant in Brooklyn. Recognizing the importance of their employees, particularly the kitchen staff, they have developed a business plan that includes profit sharing for full-time employees and benefits such as paid volunteer hours.
3. Benefit Corporations
Benefit corporations are companies that have a legal obligation to think about how their decisions affect everyone involved, not just the shareholders. This model emerged in Maryland in 2010 with the first benefit corporation law. Since then, over 35 US states and a bunch of other countries have jumped on board with similar laws.
I also have valid concerns over the benefit copy certification; the process, length, and duration make it inaccessible to many underresourced founders.
One example of a successful benefit corporation is Patagonia, a clothing company known for its commitment to environmental sustainability and social responsibility. Patagonia has been a certified B-Corp since 2012 and consistently recognized as a leader in sustainable business practices.
4. Open-Source Businesses
Open-source businesses use open-source software or hardware as a core component of their business model. These businesses often rely on contributions from the community to develop and improve their products or services.
One example of a successful open-source business is Mozilla: Mozilla is the organization behind the popular Firefox web browser. They operate as a non-profit organization and use an open-source business model to develop their products. They rely on donations and partnerships to support their operations and fund their development efforts.
5. Platform Cooperatives
Platform cooperatives are like worker cooperatives on digital platforms, and they’re becoming a great alternative to the usual platform economy. They tackle issues like worker exploitation and taking value from local communities. These co-ops focus on sharing profits and decision-making power fairly, giving their members a voice, and building a community way beyond the regular corporate setup. This approach is transforming the platform economy, making it more sustainable and socially responsible for the future.
Fairbnb, is a platform cooperative that has short-term rental platform that is designed to be more socially and environmentally responsible than traditional platforms like Airbnb. A cooperative of guests, hosts, and neighborhood organizations owns Fairbnb, and a portion of its profits go back into neighborhood projects. One example of a successful platform cooperative is One example of a successful platform cooperative is a short-term rental platform that is designed to be more socially and environmentally responsible than traditional platforms like Airbnb. A cooperative of guests, hosts, and neighborhood organizations owns Fairbnb, and a portion of its profits go back into neighborhood projects.
6. Community Land Trusts
Community land trusts (CLTs) are organizations that hold land in trust for the benefit of the community. These trusts are typically organized as non-profits or cooperatives and are designed to ensure that land remains affordable and accessible to the community over the long term.
Community land trusts have been an effective way to disrupt the real estate market and combat gentrification.
Two community land trust doing just that is theCooper Square Community Land Trust: Located in New York City, the Cooper Square CLT was founded in 1994 to address the issue of gentrification and displacement on the Lower East Side. They have acquired several buildings in the area and use them for affordable housing and community spaces. As well as the Atlanta Land Trust Collaborative: The Atlanta Land Trust Collaborative is a group of community organizations and individuals who have come together to create a network of Community Land Trusts in Atlanta. Their mission is to address the issue of housing affordability and create stable, sustainable communities in the city.
7. Participatory Budgeting
Participatory budgeting is a democratic process in which community members can decide how public funds are spent. Local governments typically organize this process, but non-profits and organizations can also use it.
A successful participatory budgeting initiative is the city of Porto Alegre, Brazil. The city has been using participatory budgeting since the late 1980s, and it has been credited with improving public services, reducing corruption, and increasing civic engagement.
8. Solidarity Economy
”Solidarity economy” is a term used to describe a range of economic practices that prioritize social justice, sustainability, and democratic decision-making.
One of the most well-known versions of a business using the solidarity economic model is community-supported agriculture (CSA). These are farms that sell shares of their harvest to consumers in the community. By buying a share, consumers support the farmers and receive a portion of the weekly harvest. This model helps to build connections between farmers and consumers and ensures that farmers receive a fair price for their products. Examples include the CSA programs run by the Farm School in Massachusetts and the Brooklyn Grange in New York City.
By shifting our focus away from short-term gains and towards long-term value creation, we can ensure businesses are ethical, equitable, and truly regenerative of our planet’s resources for future generations.