Comment by rglullis
2 years ago
What would be the point of "paying dividends from surpluses", if the funds are getting in and out of the same (collective) pockets?
And if "everyone" owns the coop, then why do you need to get the surplus in the first place? Seems to be it would be just fine to say "Every month we run a report of the total expenses, and every member pays an equal share".
It's easier (both psychologically and financially) for users to budget for $x per period - with an explicit or implied promise that it won't ever be more than that - and it's easier for the org to plan for y users at $x, than it would be for either to adjust to paying / chasing $z period.
It's a fairly common pricing strategy, which offers stability to both clients and organizations surviving on shoestring budgets and good-will.
If you want to be protected against unexpected costs, you buy insurance, you don't overpay "just in case".
All I am saying is that the coop (at least cosocial.ca) is not more capital and resource efficient than any good old service provider. We are talking here at a 250% price difference for less functionality. How would you justify that for orgs on a shoestring?
What is insurance if not “overpay[ing] ‘just in case’”? What does paying a middleman benefit you in this situation?
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I don't think that's quite the way to look at it. Insurance is for disasters. Unexpected costs should be covered by a reserve fund - so, in effect, you self-insure for that kind of thing.
Neither of us know anything about the financials of this group, but I can imagine a scenario in which they catch on, and their userbase scales 47x overnight (I mean, they're hoping for that, right?) and they need to spin up new resources right now. Good luck getting someone to write a "we got really popular" insurance policy, let alone pay out within the matter of hours / days they'd need the money. The "extra", right now, could be going towards filling up their reserve fund. Or not - we don't know - but that would be one of any number of legit reasons for asking for more than marginal-cost contributions.
Anyway, people supporting this aren't doing it out of an entirely economic cost / benefit calculation. They believe in whatever mission the org has, and have a high-trust relationship with it, so "paying" more for whatever "product" won't be a concern for them (at least right now). The contribution model the organization has chosen is ideally suited for that sort of (not purely business) relationship.
This group likewise doesn't interest me, but I can tell you stories about organizations I've belonged to and / or helped run that have worked that way more successfully than they would have in any other.
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I imagine bulk buying, less packaging, easier budgeting, among other things.
How does that apply to a coop offering digital services, which have no physical shipping and costs can be easily fractioned/metered?