Mutual Companies: The Next Step for Co-Working

Posted on Nov 5, 2010

Inspired by my friend Jeremy’s recent thoughts on co-working, I wanted to take a moment to briefly outline my own thoughts on the benefits of co-working, and especially what I’d love to see from the trend.

At the Web 2.0 summit in 2006, when EC2 had not yet redefined what Cloud meant, Jeff Bezos refers to “muck” and “undifferentiated heavy lifting” that takes up to 70% of the time you spend on your idea. He’s speaking, of course, about a platform that will make him and his company extremely wealthy, as it enables a raft of startups– a platform based on elasticity of compute and disk resources.

As software development consultants, Jeremy and I both spend our professional careers utilizing compute and disk resources. The Cloud, whatever it means now, is a part of our professional lives. We are among the few (we happy few) who can differentiate what Jeff Bezos characterizes as “undifferentiated”. As a businessman who will have two startups survive their first year as profitable companies, I have a different feeling about undifferentiated work.

As a software consultant, I am in constant need of contracts and legal review. When I searched for a retainer contract, the results were terrible. Further, when you use documents that you find on the Internet, it’s clear that your enterprise is unlikely to get the upper hand during litigation, as you’ve had no counsel.

Although Jeremy intimates that taxes are something for which “tools exist” that cost “pennies a day”, this has not been my experience. I believe a good CPA is essential to any young business, and yet they seem to take pleasure in not being differentiated. CPA’s evoke the first lines of Anna Karenina: every good one is the same, but the bad ones are all different– unique in their particular brand of incompetence.

Unhappy Cubicle Code Monkeys

That cliche turns my stomach after Chad Fowler’s incomparable The Passionate Programmer makes it clear how both of those situations are the programmer’s own responsibility. You want recognition for your work? Earn it. Make it impossible to miss your impact on your business. You want to be better understood? Go spend the time communicating with the people who matter: those in your organization. Many programmers feel that management doesn’t speak their language. Why shouldn’t you have to speak management language? I understand the arguments, but I don’t think this question is widely considered, and it harms developer’s lives. Just because it’s common in our community to be victimized by the processes that I believe Jeremy would claim are inherent in all industries doesn’t make it any more desirable or acceptable.

One point that I feel Jeremy is very right to point out is the benefit of low overhead of our industry. It removes one element of the many that keep “code monkeys” tied to cubicles in jobs where they are under-appreciated and misunderstood. There are many others. How will I find work? How will I keep it once I have it? I don’t know any lawyers. None of the lawyers I know do business contract law. I don’t know any good CPA’s. I don’t know anyone who knows any good CPA’s. How will I manage my time working from home with the distractions there? I hate timecards! How much am I going to have to pay for insurance for my family? Obama, Obama, Obama! The list could be endless, and its effect is to chain developers to those unhappy cubicles.

I feel, as Jeremy does, that co-working can address many of these questions. While I feel that the ideas he proposes may require no encompassing formal entity, I think there exists a model for a company that does have formal structure to provide different benefits that directly address the above concerns. It can lower the overall costs of what are typically large one-time or annual expenses, as well as provide a convenient payment scheme for freelancers and small development shops. It can provide access to group health care over time. It can optionally provide many related services, as Ask Sunday or Freshbooks might, either directly or through discount codes. It can provide professional community, not just in the physical world, but in the connected virtual one. In other words, some undifferentiated heavy lifting.

The element I’m most excited about is that of having membership equate to ownership. With a proper set of bylaws and founding members, I believe it can be demonstrated that two concerns of freelancers and small shops can be addressed in meaningful ways. Most developers are used to receiving a predictable sum every (say) two weeks. This is unlikely how they’ll be paid by their clients. By collecting receivables jointly, and distributing among all owners, it can function much in the way a credit union does from day to day. It can provide a payroll service that allows developers to just get the direct deposits and have less to worry about when it comes to managing receivables. As the concept matures, I believe that paid, “workless weeks” can be introduced to those who are billing enough. There is a set of numbers to be cracked, and I don’t even know any lawyers that would be up for this, so I can’t really move the needle farther than this. But it’s a great idea. If you use it, let me know, and I’ll sign up and sit on the board.