September 18, 2007

I attended an interesting presentation today at the OTBC: “Co-Ops, What Are They, and How Do You Start One?”

The gist of the co-op idea is that for certain groups of people or companies, coming together to share resources can be far more efficient than simply going at it alone. A good example that everyone’s heard of is OceanSpray, the cranberry company. It’s a group of independent cranberry farmers who came together and formed a corporation for distributing and marketing cranberry products. It’s run democratically, profits are shared amongst it’s members, and it’s very successful in it’s own right.

Adam DuVander (from the Portland Web Innovators) and I talked afterwards about how this concept applies to something closer to home: professional software development. There are lots of independent software developers and consultants in the Portland area, and while the technologies and applications vary wildly, there are probably some very common frustrations that could be aided under a co-op structure.

Ask any independent software developer or consultant what their biggest gripes are about running a business, and I’m pretty sure the same three things will show up on everyone’s list: managing money, legal issues, and insurance. Invoicing, book keeping, solid contracts, good NDAs, taxes, health and vision and dental plans and all those sorts of things are necessary for running a successful business … and have nothing to do with delivering high quality software.

My knee jerk thought is that a co-op could go a long way toward solving these problems. Larger groups have more bargaining power for getting accounting, legal, and insurance services … and centralized bookkeeping and payroll would make a lot of people’s lives easier: wouldn’t it be nice to do business as an independent software developer, to get paid for your work, and to not worry about the rest?

Anyhow. Does this sound like a compelling idea to anyone else?

Update:  You’re welcome to join the discussion on the Portland Web Innovators forums.


6 Responses to “Co-op”

  1. Brett Says:

    Definitely sounds compelling, and makes a lot of sense for tons of business models. I think Web 2.0, social media, etc., only makes co-oping more accessible.

    From an advertising standpoint alone, if 10 small companies that market single products came together and offered them together under one umbrella, they could all benefit from the increased visibility. And that’s just one application.

  2. very interesting…sort of like an incubator, right? Different in many ways, of course.

  3. Peat Says:

    I think it’s less of an incubator and more of a facilitator. 🙂

    From what I’ve seen, an incubator is more about providing a support structure for companies that are little more than a business plan, whereas a co-op is oriented around managing a common problem between individuals / businesses.

    But, you’re right that there is a lot in common — it’s a system that’s working for the common good of the participants, and provides resources that may not otherwise be available to the individual members.

  4. Justin Myers Says:

    I think this could work REALLY, REALLY well in the creative industry. It would be very helpful if we could add a marketer in the mix and have a designer, lifestyle photog and product photog all under the same umbrella.

  5. This is something our not for profit organisation has been working on for sometime and anyone is more than welcome to visit our site and see what we do:

  6. Stanger Says:

    The co-op concept has been one of the business models I’ve been looking at for my open research and engineering organization. Basically scientists can act independently but have access to a centralized entity that offers shared resources, re-distribution of used apparatus and legal/financial/managerial care taking ect…

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