Coop Profile: Loomio, Part II

This profile is Part II of an interview with Alanna Krause, co-founder and worker-owner of Loomio, a online software worker cooperative based in Aotearoa New Zealand. Join the conversation on Democracy at Work's Loomio page as well: democracyatwork.loomio.org

This profile is Part II of an interview with Alanna Krause, co-founder and worker-owner of Loomio, a online software worker cooperative based in Aotearoa New Zealand. Join the conversation on Democracy at Work's Loomio page as well: democracyatwork.loomio.org

Name: Loomio
Website: www.loomio.org
Industry: Online Open-Source Software

Read Part I of Loomio's profile here.

What did the start-up process look like? Where/how did you find start-up funding?

We took a very ‘lean startup’ approach, creating a useful minimum viable product as quickly and cheaply as possible, and then iterating on it based on real user feedback. We got off the ground with no capital at first. We quickly started generating revenue from consulting services, working with organizations who want to collaborate and do effective consultation but need help.

After releasing a beta prototype of our software, and being overwhelmed with interest in it from around the world, we did a round of friends and family loans. Then, in 2013, we ran a successful international crowdfunding campaign ($125,000 USD). This enabled us to work on a new version of the software, and Loomio 1.0 was released the following year. We implemented a software-as-a-service (SaaS) business model, with free and paid options. The free version is supported by donations, or you can subscribe and get premium features.
In 2015, we raised a round of ethical capital ($450,000 USD) from impact investors, using redeemable preference shares. It’s an innovative instrument that keeps control in the cooperative and the focus on the impact mission, while compensating investors and helping us grow the business. We’re looking toward another similar round in early 2017, as we continue to increase revenue. [You can read more about Loomio’s pioneering investment strategy here. --Ed.]
What has everyone found are the benefits to being organized as a worker coop?
We love being a co-op. Honestly, I can’t imagine owning a startup by myself, and feeling all the pressure just on my own shoulders. Doing a startup is a roller-coaster ride, financially and psychologically. We look after each other and share the load.
Being a co-op has allowed us to build a truly great team. While we can’t offer much money to workers right now, we can invite them into co-ownership. It’s served as a good signal to attract people who want to work in this way and who share our values.
Our co-op structure has had a big impact on the development of our product. We’ve built something that works because we use it every day to make real collaborative decisions together. Our values show through in what we design: a hierarchical, extractive, closed-source company just wouldn’t build this product. Michel Bauwens of the P2P Foundation said of Loomio, “Our values — our democratic values — are in that software.”
For me, the level of authenticity being a co-op enables is one of the main benefits. Our product is about collaboration, inclusion, and creating a more equitable world. Because we live these values in everything we do, I can hold my head up high knowing that, while we haven’t got everything figured out, we are walking the walk.
Loomio makes software that helps groups make decisions together.

What has everyone found are the challenges to being organized as a worker coop?

We are a very diverse team, with backgrounds in social change, facilitation, community sector, and civil society, as well as business, technology, and startups. And of course we’re working for a collective vision, not an individual one. It was a long process to integrate all these perspectives into one coherent product and business model. So velocity has been somewhat of a challenge. I think we could have moved faster. We’ve all worked on ourselves and grown a lot as people along the way, and profoundly deepened our shared understanding.

Going through that process of integrating our diversity made us much stronger, as a team and as a product. Now we're pretty good at thinking strategically and getting the whole team focused. Working in highly collaborative and inclusive ways often means investing more time getting everyone on the same page, but once you get there you can move together super effectively.

We’ve also faced challenges with raising capital. We’re not a good fit for traditional venture capital (VC) funding, because we don’t have ordinary equity and don’t want to set up certain profit maximizing incentives. We’re not building Loomio for a “big exit” — we want to create a company that lasts, pays back investors and ourselves, and ultimately builds the commons.

So, it took us longer than many startups to find the right model for capital. But once we found it, we discovered that there are investors out there who deeply care about social impact, who seemed to be waiting for just such an opportunity. I think better capital models for mission-driven startups and co-ops is definitely a problem worth solving, for investors, entrepreneurs, and society. The market is ready for alternatives.


What advice, if any, do you have for anyone interested in starting their own worker coop?

Check out our handbook, and feel free to copy it, fork it, adapt it. It’s open source! And please share back what you learn with us. We’d love to see more worker co-ops starting up, and are eager to help if we can. Real stories of the journeys of others are extremely helpful. We feature a lot of them on our blog.

Find a group of collaborators who share a deep sense of purpose and values. That’s what held us together through differences of opinion, hard times, and moments of doubt. The number one reason startups fail is the team imploding and relationships breaking down. If you can collaborate well together, you’ll be in good shape! So invest in good process and communication, and look after each other as human beings.

Click to explore Loomio on your own, and feel free to join the Democracy at Work's Loomio page as well: democracyatwork.loomio.org

Know a democratic workplaces you would like featured as a profile on Democracy at Work? Email: [email protected]

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