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(In which I take a moment to meander on a topic about which I know very little.)

In Doc Searls' recent writing on "The Ultimate Alignment" he writes on the disconnect between the interests of the companies that are building the web and the people who are using it. To summarize, companies have (or are supposed to have) their investor's best interests in mind rather than the best interests of their customers and users. 

Theoretically, our efficient market system is supposed to align these two groups of interests. Or at least mediate between them. In theory, theory and practice are the same. In practice they tend to differ and one group of interests has a tendency to be subverted. When it comes to situations like the recent Facebook acquisition of Friendfeed or cable and telecom companies colluding with the recording industry to restrict peer-to-peer connections, the disconnect between the interests of users and investors comes into stark relief, and we see that users can be left out in the cold when interests conflict.

Customers have generally been getting the short end of the stick, or the pointy end if they're especially unlucky. This can, and probably should be attributed to a lack of customer organization and a resultant lack of bargaining power; something that is starting to be addressed with varying success by the social web, and which Searls sees culminating in a real capability for direct customer negotiation, which he calls Vendor Relationship Management.

A somewhat alternative approach proposed by Dave Winer, which Searls writes about in the above linked article and to which he appears sympathetic, is the tale in which the customers seize the reins of power and re/self-organize companies into a sane and impeccably moral engine of economic progress, for the good of all. [Ed. Sometimes he has a hard time keeping the lid on the sarcasm, especially in entries written on airplanes. Must be the altitude.]

Despite the sarcasm, I'm incredibly sympathetic to this idea, so after all of that throat clearing, I'd like to think about how it would work. What Searls and Winer are suggesting is a customer-owned coop.

Coops are cooperatives

My understanding of a customer-owned coop is that it is a business which is wholly owned and capitalized by its customers and the purpose of which is to provide a specific service rather than to turn a profit. If additional capital beyond what is required to deliver the service is generated, that capital is returned to the customer/owners. If an existing customer would like to become an owner then they can invest the requisite amount in the coop that is required to receive an equal share. Usually there is some ownership incentive provided, such as the ability to make use of the coop's services, or a discount on those services.

There are lots of kinds of coops, from housing and utility coops with services available only to owners to grocery stores and book stores which operate as commercial entities and often provide only slim discounts to owners. Public companies and governments are arguably coops, though they are not usually acknowledged as such and are usually not strictly customer/user-owned. (Though this is usually fairly close to the truth in the case of democratically elected governments with an electoral process that is relatively uninfluenced by monetary concerns ... and we know there are plenty of those around. [Ed. This sarcasm is getting a tad out of control, isn't it?])

Coops are often formed to establish some vital piece of infrastructure that a community feels is not adequately provided by existing commercial or governmental entities. A community that is lacking a quality grocery store will sometimes establish one as a coop. A university community that feels its access to academic books is restricted or provided at far too high a price by a commercial book store might establish a coop bookstore, effectively buying itself a distribution channel that did not exist before. Same goes for utilities.

In this way of thinking, coops are usually focused on infrastructure, with a special focus on distribution infrastructure during the 20th century. Distribution of food, books, natural gas, or electricity.

Open source is a bit like a coop ... and how

Open source software development is like a coop. The buy-in is contribution, of code, testing, bug-wrangling, documentation, publicity, or community process. The ownership privileges are varied. Contributions of code usually buy the contributor partial ownership of the code-base and the accompanying control, depending on the license - a privilege that cannot be purchased in any other way. Same goes for contributions of documentation vis a vis the body of documentation. All other contributions buy a less well defined voice in the community process.

Open source projects often resemble coops in another manner in that they are usually established to fill a need that a community feels is not adequately met (or is not met at an appropriate price) by existing commercial offerings. Some of the most successful open source projects have been and continue to be focused on infrastructure.

Open source as barter coop and the problem therein

This ground has been pretty heavily tread before, but the above description is of a coop established via barter, rather than exchange of more abstract monetary instruments and the signing of binding legal contracts. Importantly open source projects are only open to ownership by individuals who are prepared to deal in a particular instrument of barter. Open source is a bazaar, but it is a bazaar that is only accessible to those who can pay the entrance fee in a particular currency. It is a bazaar, frequented only by merchants and large distributors, not by individual shoppers. It has the best prices and the best goods, but good luck getting to them.

And therein, of course, is a problem with the open source cooperative model. The strength of many cooperatives is that any interested user can become an owner (and often does), and this is the model that Winer and Searls would like to see, it seems. But in the open source world this is not the case. In meat-space cooperatives, and bazaars for that matter, the answer is money. Anyone with money can buy a share in a coop grocery store. You don't necessarily need to be able to contribute broccoli or organic lamb to participate. 

Coops as cooperatives (and the trouble with staying that way)

Often coops seem to work best when they are providing services to a local community. This may be partially the case because it reduces the interest in joining a coop for reasons other than taking advantage of the primary service that a coop provides. This local focus can be used as a hedge against the possibility of a group of disinterested investors taking over the coop and turning it into a profit-making operation, divorced from a direct interest in providing a service to its customers and instead focused on providing a service to its owners (now two different groups of people). Viola! Modern commercial entity.

For this reason I very much doubt that founding a new company and immediately IPOing as Winer suggests would not accomplish the goal of creating a company that is truly aligned with its users and customers to provide a service they desire or require. Some guard or incentive must exist, as is the case with coops, to keep the coop owned by its users and customers, yet still open to membership from new and interested users and customers.

Open source projects don't have the local angle going for them, but truthfully there is precious little to gain from participating in an open source project if ones goal is not to improve the project. Ego and a bullet on the resume perhaps. Through narrow focus and severely restricted ownership, these projects make sure that all owners are user/customers, even if they cannot guarantee (and in fact do not aspire to a reality) that all users are owners.

And so we come to the point

We have open source projects, which are fairly successful at making sure that they are guided primarily by input from user/customers but which can do a fairly bad job of making sure that all users/customers are well-served. We have commercial entities which do a good job of serving their owners but a bad job of making sure that their owners are also their customers, resulting in divergent interests. We have local coops, which tend to do a pretty good job of both but don't tend to scale well past a local community.

And then we're talking about essentially a distributed infrastructure coop that shares some of the best features of local coops and commercial entities. What structural features could a web-infrastructure cooperative boast that would meet the following necessary requirements?

• Any user/customer can (and often does) become an owner
• Only user/customers become owners (with the possible exception of a small minority ownership by other interested parties)

I don't know the answer to this question. In fact, a part of me doubts that there is an answer and that we will be better served attempting to scale community processes. But it seems it is the crux of the problem of the dis-alignment in web infrastructure.