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Working at the Faux-Op

Silicon Valley has caught wind of the benefits of collectivism

The worker’s cooperative has come to remake the digital economy. Launched earlier this year, Catalytic Soundstream serves as a cooperatively owned alternative to Spotify, which joins the likes of Resonate and Ampled, the latter of which offers musicians a Patreon-esque model that incorporates shared ownership. (Full disclosure, I’m involved with Ampled as a volunteer.) Numerous co-ops have also emerged to refashion the gig economy on more equitable terms. The Drivers Cooperative—covered by the New York Times and applauded by Alexandria Ocasio-Cortez—is a New York City-based ridesharing app owned and operated by its drivers; the rides are designed to be about 5 percent less expensive than Uber and Lyft and drivers keep a larger percentage of each fare. The same dynamic goes for Up & Go, a cleaning service owned by its workers, who earn higher wages compared to gig workers at competitors like TaskRabbit.

Into this tempest of egalitarian innovation enters Co-Op Commerce, which, at first glance, might appear to be a worker-owned version of Amazon or one of its fledgling e-commerce adversaries. The start-up sports an infinity sign logo awfully similar to that of the main provider of web domains for cooperatives, DotCooperation. Slick and colorful, Co-Op Commerce’s webpage displays a town square populated with dog walkers, joggers, and foodies “likely to convert”—to what? Perhaps to “The Co-op Way?” Might this refer to the startup’s ownership model? Not in the slightest. This faux-op of the future practices a watered-down form of selective collectivism geared towards small to midsize business owners and based on a commercialized version of mutual aid, building solidarity between brands and their owners, not their employees.

Backed by $1.6 million in pre-seed funding—from three different venture capital firms and the CEO of PopSugar—and having just closed a $5.8 million seed round, Co-Op Commerce’s purpose is to make it easier for businesses to partner, or cooperate, with each other, omitting that essential detail about shared ownership and governance. How does it work? Brands that join this faux-op can form advertising partnerships with other brands in the Collective based on the overlap of who’s “likely to convert” from one vendor to another. If you like Ghia, the nonalcoholic aperitif “inspired by the Mediterranean,” then you’ll love nibbling on PYM, the original “mood chew.” If you enjoy wiping your ass with Bippy, the bamboo toilet paper, then you’re sure to delight in proactive urinary tract health supplements from Uqora.

Startups have long failed upwards on the basis of rendering exploitative functions marginally easier to carry out, and Co-Op Commerce is here to refine the uses of consumer data. Here’s how CEO Conner Sherline explains the magic on an episode of the podcast Future Commerce: “Our first product is a post-purchase experience that allows brands, after they’ve captured a conversion, to promote other complimentary brands that their customers might like.” Both hosts were dazzled by this description of a recommendation algorithm, one that supposedly elevates the act of nudging people to buy more non-toxic ceramic cookware to the spiritual plane of imparting an “experience.”

A little later during the same episode, one of the hosts recounts an epiphany he and a friend had in SoulCycle about how the fitness company depends on value-added partnerships. Then the host realizes: just as SoulCycle sells brands like Lululemon and Lord Jones at its different locations, Co-Op Commerce does the same thing but for digital. In fact, the faux-op is less like SoulCycle than it is Sherline’s former employer: Facebook. While there, Sherline helped devise a “retargeting solution” for bombarding users with recommended ads and improving the platform’s ability “to essentially know what you’re interested in.” Now that he doesn’t work there anymore, he’s free to talk about Facebook with the kind of wishy-washy critical tone that has grown more commonplace in the wake of The Social Dilemma. According to him, the problem with the company lies in its data collection—not who it collects the data from, rather who it goes to. “Facebook doesn’t give the data that it knows about a customer in aggregate to an individual retailer, which makes personalization on specific sites a challenge,” Sherline points out.

While Co-Co Commerce does not share ownership, it is effectively socializing the cost of data-driven advertising.

The faux-op’s solution is to pass along customer data straight to the brands themselves, a modification that markedly improves upon the already coercive nature of e-commerce. Shoppers who browse the upmarket Sichuan chili sauces and “spreadable granolas” of the Collective are coaxed into purchasing stuff by the opportunity to earn points—one hundred to start an account, one for every dollar spent—that they can use to earn coupons to buy more cutely packaged crap. But Co-Op Commerce’s true innovation is the point system it offers member brands. When Karma Nuts shows an ad for chic doomsday prepper kits from Judy and a user clicks through, the referring brand gets a credit that it can use to acquire placement and visibility throughout the Collective. So while Co-Co Commerce does not share ownership, it is effectively socializing the cost of data-driven advertising. For member brands looking for the kind of people who want and have the money to spend on artisanal diapers and Scandinavian dog beds, it’s a win-win. 

Aside from facilitating a happy circle jerk of luxury brands, the only other Collective benefit is an exclusive Slack channel which Co-Op Commerce treats as its locus for community-building—because, as Sherline claims, the company is a community “first and foremost,” a service-provider second. Although the pleasant tone of the former is meant to muffle the blandness of the latter, it’s still a curious sort of filler. What does he even think a community is? Presumably he holds the same myopic sense of community as the rest of Silicon Valley. As David A. Banks and Britney Gil explain in Real Life, communities are messy social bonds that aren’t necessarily accessible and principled by default. In the manner that tech companies embrace the term, it “implies a condition beyond politics where a collectivity automatically shares values and agrees on how to realize them. What community actually entails is precisely the process and capability of working these disagreements out.” If the faux-op were truly a community not in the Silicon Valley sense of the word, its website would outline what procedures it follows, tedious though vital, to illuminate and rectify conflicts between workers, members, and management. And that would require a reorientation of its current business model, to the point that it might need to resemble an actual cooperative—or at least something other than an affluent swap meet.

Instead, this faux-op, with its cheerful paeans to brand synergy, mocks platform cooperativism, the existing model for bringing democracy to the digital economy. Trebor Scholz coined the phrase in 2014 at a time when the “sharing” economy’s inherent structure of tech-enhanced labor exploitation subsidized by boatloads of venture capital began to eclipse its benevolent branding. His solution—think the Rochdale Society of Equitable Pioneers but with computers—became the guiding principle for the Drivers Cooperative, Up & Go, and other web-based worker cooperatives that hope to make the gig economy more ethical. Nathan Schneider expanded on his concept by envisioning routes for top-down startups to exit to their users and workers, rather than exit to the marketplace through a traditional IPO—what he calls Exit to Community, or E2C. Writing last year for Noēma, Schneider outlined three models tech companies might adopt, including one in which a trust operating on every employee’s behalf borrows the necessary money to buy a majority of shares in the company. Platform cooperativism has even appeared to resonate within the tech world: the Platform Cooperative Consortium, which is run by Scholz at the New School, received a $1 million grant from Google in 2018 to author a development kit for platform co-ops.

In many ways, it would be less troublesome if Co-Op Commerce was just using “cooperative” as another empty ad-copy adjective in the vein of “transparent” and “sustainable”—what Scholz calls “solidarity theater.” Startups have been congratulating themselves with those kind of descriptives for years. Co-Op Commerce has taken it a step further by adopting as its business model a desiccated form of cooperativism that benefits only the bottom line by pillaging data from consumers so Oui the People and other member brands can save money on advertising. In this mutated form, the “cooperative” no longer designates those who give value to a company as its co-owners.

It remains to be seen if models of legitimate platform cooperativism can outlast and overtake the heretofore patient venture capitalists—indifferent as to whether the companies they fund can actually turn a profit in the short-term—who are bankrolling the cosmetic commons of faux-ops like Co-Op Commerce. But now that Silicon Valley has caught wind of the benefits of selective collectivism, the prognosis is not promising.