The Chris Voss Show - The Chris Voss Show Podcast – The Benefits of Co-ops: Building Wealth and Empowering Communities

Episode Date: May 28, 2024

The Benefits of Co-ops: Building Wealth and Empowering Communities Everything.coop About the Guest(s): Vernon Oakes is the General Partner at Everything Co-op Communications, LLC, a media company that promotes cooperative business models. With over 40 years of experience in property and asset management, Vernon became familiar with cooperative business models as the owner of a residential property management company. He is also the host of the leading weekly national radio program for the US Cooperative community. Vernon holds an MBA from Stanford University and has significant national and international experience in various business activities, including marketing, sales, forecasting, distribution, and service and systems design. Episode Summary: In this episode of The Chris Voss Show, host Chris Voss interviews Vernon Oakes, the General Partner at Everything Co-op Communications, LLC. Vernon shares his passion for cooperative business models and explains how they benefit individuals, families, and communities. He discusses the different types of co-ops, including worker co-ops, consumer co-ops, purchasing co-ops, and marketing co-ops. Vernon emphasizes the importance of cooperation among co-ops and the value of education, training, and information in the success of co-op businesses. He also highlights the resilience of co-ops during economic downturns and the positive impact they have on self-worth and dignity. Key Takeaways: Co-ops are businesses created by and for their members, providing benefits to the community and families in those communities. There are four main types of co-ops: worker co-ops, consumer co-ops, purchasing co-ops, and marketing co-ops. Co-ops operate based on values and principles such as cooperation among co-ops, education, training, and information sharing. Co-ops are more resilient than non-co-ops during economic downturns and have a higher chance of long-term success. The biggest benefits of co-ops are the financial wealth and self-worth and dignity they provide to individuals and communities. Notable Quotes: "Co-ops are always training each other on best principles, best ways of doing businesses, best practices." - Vernon Oakes "Co-ops are operated by values and principles. One of the principles is cooperation among co-ops." - Vernon Oakes "Co-ops end up helping each other. Credit unions help housing co-ops, housing co-ops help food co-ops." - Vernon Oakes "Co-ops are businesses that really help the community. If you want your family and community to be successful, look at starting a co-op." - Vernon Oakes

You wanted the best. You've got the best podcast. The hottest podcast in the world. The Chris Voss Show. The preeminent podcast with guests so smart you may experience serious brain bleed. The CEOs, authors, thought leaders, visionaries, and motivators. Get ready. Get ready. Strap yourself in. Keep your hands, arms, and legs inside the vehicle at all times. Because you're about to go on a monster education roller coaster with your brain. Now, here's your host, Chris Voss. Hi, folks. This is Voss here from thechrisvossshow.com.

The Chris Voss Show. I'll let her do it. There you go. I'll let her do it. There you go. I did it for 14 years, and now she does it, and sometimes I forget. I kind of like doing it. It's kind of fun. There you go. But, you know, after 14 years, I had to hang up the hat and leave it to the opera singer

who knows what she's doing, and I certainly don't. We have an amazing gentleman on the show we're going to be talking to today. His name is Vernon Oaks. He's an Everything Cooperative general partner. We're going to be talking about his business, what he does, his radio show, his podcast, et cetera, et cetera. And we'll get into it. He hosts the leading weekly national radio program for the U.S. cooperative community. He's a general partner in Everything Co-op Communications, LLC, a media company that promotes cooperative business models by providing education and resources specifically for under-resourced Americans and their communities.

Vernon has significant national and international experience in various business activities, including France, marketing, sales, sales forecasting, distribution and service, and systems design. He became familiar with cooperative business models as a residential property management company owner and has more than 40 years of experience in property and asset management. Welcome to the show, Vernon. How are you? Chris, I'm doing great. How are you doing today? I'm doing excellent, especially now that you're here. It's an honor to have you, sir.

Give us your dot coms. Where can people find you on the interwebs so it's everything dot c o o p everything dot co-op there you go or everything dot coop or no hold on everything coop never mind i'm just being funny don't do that people it's co-op co-op give us a 30 000 overview of what you guys do there at everything co-op communications so i got my mba out of stanford and every decision was made on what's the highest rate of return and investment for the shareholder and i didn't like it at the time but i couldn't articulate it until i learned about co-ops as i was managing them and watching everyday people run a business and do it extremely well, get the education they need to run a business and hold each other and

everybody accountable. So I fell in love with this co-op model because it just does a lot for the people that are in it as opposed to shareholders that may not even live in a community. And it benefits the community and families in those communities. There you go. So you go through all that stuff and help people. And what made you, prompt you to start the radio show and then eventually the podcast? And how does that work? So I was the president of the National Association of Housing Co-ops, and I had two older gentlemen, Herb Fisher, a laureate out of Chicago, and Roger Wilcox. Roger was in his 90s and Herb was in his 80s at the time.

And they kept telling me that if people if developers would build co-ops and people would buy them. And I listened to that for a while, but I put my marketing hat on and said, people just don't understand co-ops. So people demanded housing co-ops and developers would build them and then they would buy them. And so I started going around being on radio shows and I was on a radio show called the Thornton Business Hour. And the person in charge of the station came out and said, you should have your own show. That was June, 11 years ago, and we were only going to do it for the month of October, which is co-op month in that year, but I liked it, people liked it, and we've been doing it now for almost 11 years. Wow. And then you converted it into the podcast. Is it entitled the same on the podcast?

What is it entitled on the podcast thing? It's the same. Okay. So that makes it easy to take and do. You know, it's so funny, all the different business things that are out there. How did you get started in this business? Tell us how you were growing up, how you were influenced, et cetera, et cetera. So I was born in New York City.

My parents met there, World War II. They were both World War II vets. But my father was from West Virginia, so we moved to Bluefield, West Virginia, where I grew up. And, you know, we lived, there was a lot of cooperation, people working together. I remember a group of us got together, dug out a hill and made a basketball court. So we worked together and that was good. We integrated in 1955, went through junior high, middle school, high school, and majority white schools, and then went to Bluefield State College, which was historically black college. Never learned anything about co-ops in that education.

Went to, taught a year. Then I went to Penn State and got a master's in math. Taught two years and went to Stanford and got an MBA. And then worked for Cummings Engine Company out of Indiana. And then ran a distributorship for them in Puerto Rico. Then I came to D.C., worked for Howard, and ran their MBA program a couple years, but I taught marketing there.

And then I started my property management business. Wow. That's what made the co-ops. There you go. So define what a co-op is for people. Let's get a breakdown, Leah, foundation on the meaning of that as you describe it. A co-op, as I describe it,

is it is a business created by its members for the benefit of its members ah okay and they're they're basically four types of co-ops it's if it if the business is owned and controlled by the employee it's called a worker co-op and therefore you can have any business you can think of the business is is owned and controlled by the people that uses those products or services it's called a consumer they consume the products or services and there you have credit unions housing co-ops okay rural electric co-ops or consumer co-ops rei that a lot of people know about recreation equipment then there's two more that a lot of farmers use. One is called a purchasing co-op, where a bunch of farmers come together and buy in

bulk. And normally, they create a business that buys in bulk. And therefore, they get a better product at a lower price. And then farmers and other people are beginning to do that also creating purchasing co-ops ace hardware is a purchasing co-op all those hardware dealers belong to ace which buys and warehouses nails and stuff so they can compete against the big box stores oh wow that's well that's so that's why aces stayed around all these years yes yeah marketing co-ops are co-ops that individuals or businesses again farmers will come together and create a

business to market their products so a farmer can therefore spend their time growing whatever they grow and then they have another company they can send their milk to or cows to or like farmer co-ops yeah the apartment those are marketing co-ops or sometimes they're called producers cap creamery is an example of that they take the milk and they make cheese and cottage cheese but there's all kinds of don't, I'm just trying to think of, I used to, okay, I just had a brain. There's all kinds of farmer co-ops. Let me just leave it at that. There you go.

Yeah, and so when you do your radio show, when you do your podcast, when you do your consulting, I imagine you do consulting for this as well, coaching or something like that? Yes. Yeah. podcast when you do your consulting imagine you're consulting for this as well coaching or something like that yes yeah when you do that are you usually helping people know how to navigate the ones they have currently set up better or are you doing them to help them show them ways that they can benefit by setting it up and making things work most of what i do is I help people to figure out how to do it better. I do a lot of training in financial management. I don't do as much in creating them. There are people around that help people to create.

There's co-op development centers. Most of them are financed by Department of Ag and they're on rural, but sometimes they're in urban areas also that helps people to start co-ops and figure out how to make sure that they're successful. There you go. Now, it seems to me that a lot of co-ops or some co-ops, like for example, the farmer's co-ops, these are technically at one time they were probably competitors right so they were all competing for business and distribution but by by seeing the vision of co-opting up and working together instead of competing each other they found that they had a more powerful sort of lobby or conglomerate correct is that a good analysis we can get you into this world too that was that's

excellent that's exactly what happens co-ops are operated by values and principles. And one of the principles is cooperation among co-ops. And co-ops end up helping each other. Another principle, which is the one I liked first, was the fifth principle is education, training and information. So co-ops are always training each other on best principles, best ways of doing businesses, best practices. And they share information more than compete. It's more of working together. And this is this cooperation among co-ops. But you should also have credit unions helping housing co-ops and housing co-ops might help a food co-op. Food co-ops could be either owned by the employees or owned by the consumers.

They were mostly started with owned by the consumer. There you go. I know UPS used to be employee-owned, but is that an employee-owned company that's not really a co-op? Union Pacific or United Parson Service? 90% sure it's not a co-op? Union Pacific or United Parsons Service? 90% sure it's not a co-op. It may be an ESOP, which is another form of employee

stock ownership, another employee ownership model, but I'm 90% sure it's not a co-op. There you go. There you go. If you're out there listening in the field, does this only pertain to certain businesses,

or can a lot of businesses pull this off in working with their competitors and creating co-ops? So right now, baby boomers, they're something like own 60% of small businesses. And a lot of times they don't have a succession plan and so these turning into a employee owned either a co-op or esop turning into an employee owned is a great way of the business owner getting some of the asset value out of that business. You know, I like co-ops. If you've got a business and the employees start owning it and making decisions, they normally make better decisions when they are working together. These employees are in the world, you know, on the front line doing the work. So they understand the business

and getting that information back to the decision table. That's why co-ops, for the most part, if a co-op is started today, 10 years from now, 90% of them are still in business. But if it's a capitalistic business, 90% of them are out of business because people are working together, helping each other, and it's for the community, and the community rallies around them in bad times.

I would imagine that the big boxing of America, the warehousing big boxing of America, really was destructive to Main Street and small players and medium-sized players as well. And so I imagine co-opting is probably the best way to compete with that craziness. You know, it could be the Walmarts, the Home Depots, all that sort of stuff. Oh, I absolutely think so. I think co-ops is the answer to combat the big box stores because they do go in and they just mess up downtown and mess up Main Street. They go all of the business away and the small hardware stores go out of business with Home Depot and Lowe's and all of those different places.

So they have to compete a lot of times in their buying products if they're buying small amounts so that they pay a higher price. If they can get into an Ace hardware, and that's what happens to Ace a lot of time is family-owned hardware stores that would become a member of ACE, and then they can buy. They have the option of buying from ACE or buying outside. So they can get things, and they can compete then against the big box stores. Yeah. You know, we've had, like, with coaches, a lot of coaches compete with each other in the coaching market.

We've had people on the show, they've created coaching conglomerates. I don't know if everyone has a vote, but they'll create websites for directories and they just kind of learn promoting others raises their promotional level, their awareness level of people seeing them. And a rising tide lifts all boats, basically. I guess that's technically the whole concept of co-op.

Like I said said we can get you i'm gonna see if i can't get you involved in this co-op world because you know it that's exactly what happens yeah okay yeah maybe we should get all the podcasts together and we should all i don't know work together instead of we don't really fight each other i don't i don't know i don't really fight podcasts like i don't i mean to me rising tide lifts all boats the the better the podcasting has been for everyone the more people are listening to podcasts as opposed to i don't know whatever they should be listening to yeah good podcast yeah you know so it's it's definitely helped the podcasting business has helped my business you know it's a problem bring more listeners business. It's helped my business. It's helped bring more listeners.

But yeah, I can't compete with if they're an NFL star hosting a podcast or if they're a movie star, Hollywood, hosting a podcast. I can't compete with that. I can bring them on my show, but I can't compete with that. If Oprah wants to start a show, she's going to have 24 million you know members of her audience overnight where we're still trying to get to 24 members in our audience that 24 million members in our audience that listen to the podcast every day we're good at people we're 23 million i think something like that we're in the millions so that's all that matters

i'm in the audience so i've got a ways to go. Thank you. 24 million is, you know. But she's Oprah. I mean, what are you going to do? You can't compete with that. So maybe we should all bind together and fight Oprah. We should all just, all the podcasts should get together, and we'll just go to war with Oprah and talk shit about her. No, I'm just kidding.

Don't do that. I think another way of doing it is we can get Oprah included into the co-op world or working together so we can live all tied up. Yeah, we can get Oprah to just give us all cars, man. You get a car and your podcast gets a car and your podcast gets a car. I like this idea. See, this is why you're the pro at this. So what are some other aspects? What are some of the challenges you run into with co-ops?

Is there maybe some, you know, because sometimes people don't get along well. So I found that my mind went to ticking. And so not only is it Cabot Creamery in terms of marketing co-ops, but Lando Lakes, Ocean Spray. Oh, that's right, Lando Lakes. Okay. There's a co-op in Pittsburgh called Ujamaa that are black females that are artists. They're beginning to use co-ops because they have a storefront where they sell their jewelry and paintings and clothing, which individual artists couldn't do. And they have a web presence.

Now, having said that, I forgot your question. I was saying, what are some issues that happen with co-ops? I mean, sometimes everyone doesn't get along. How do you navigate those things? That's the hard part of co-ops. As a property manager, I found that most co-ops, they flourish and people work really well together and so forth. But if you got a president of the, often it would be the president of the board, that greedy. They're greedy for power or money. You mean there's a different way not to be greedy than power for money?

Those are the two things that most people want. Power and or money. And sometimes it's the power so they can get the money. Ah. Okay. You get the money and you get the power. And then you get the women. Wait, is that from Scarface, the movie?

Okay. It's that line from Scarface. First you get the money. That is the problem with co-ops. So the secret of it is it's finding those people as soon as you can and following the bylaws and the rules of cooperation so you can get them out as soon as you can. As a property manager, I found it difficult because I wanted to do things according to federal laws, DC, I'm in Washington, DC, DC laws, and then the bylaws of the co-op in that order. And so when I found somebody that was not following the laws, it was normally because they wanted something.

And often it was that power. So it is as soon as you can. And I would have to go and get help. National Co-op Bank had loans out and they would come in. They were the easiest to help sort that out. HUD, a couple of times I was able to get them to come in to help because they had the loan or the mortgage or they had some kind of a subsidy program in there. But that is, in fact, the hardest part of co-ops. When things go wrong, they are big. Most of them are highly successful and work extremely well. But when they're wrong, you've got to get in there quickly and get that out, nudge it out. There you go does does so what's

what's the best way to go about that is that you need to stay in you need to stay in you need to have really thick rules and regulations and you need to you know really you need to make sure that you know there's there's guidelines and penalties you know i learned over business time that my rules and regulations and manuals just kept getting thicker and thicker and contracts kept getting thicker and thicker as time went by. Yes. Yeah.

But it is really knowing what's in the contract, really knowing what's in the rules and then holding people to it. You don't just let things fall and it's so much easier either not catching it or seeing it and say oh that's not that bad it won't be that bad it'll go away but that stuff normally builds it snowballs yeah it normally snowballs which is kind of a which is kind of an issue so yeah i imagine you just have to have good controls probably large councils right where there's maybe a board that makes a lot of decisions as opposed to one guy maybe so in a co-op the members elect a board of directors five seven nine members and that

board then has to implement the bylaws and where it goes wrong is if people on that board won't follow the bylaws, okay, or you get somebody elected to president, again, that doesn't want to follow because they want the money or the power. There you go. So you got to have people that are, you know, sort of city councilman type people, maybe. I don't know if that's a good one. Power corrupts everybody, I think, when it comes down to it, and money. If you don't have people that will follow the rules and hold people accountable.

And that's what I like when I first got involved in this that people were holding each other accountable to pay their more rents or they call co-op fees to pick up behind their animals to whatever it is okay but to have classes on what the house rules or the bylaws are for the members and then holding them to it. And it may be a $100 fine if they don't. But as soon as you find out that somebody's not doing what they're supposed to do or parking in the wrong place, then you act. There you go. There you go. You know, it sounds like it's fun.

It's complicated. But the fact that you can have more lobbyist power, more business power, more buying power, I imagine, if you're having to buy stuff for your inventory or production to make your widgets, you can buy things cheaper because you're grossing up and basically able to buy in bigger bulk. It makes sense. It makes sense. I mean, especially when these you know, these companies, you know, these big box companies you're competing with now have pretty much almost unlimited resources.

But Chris, the biggest, what I found the biggest benefit of co-ops comes in two flavors. One is that people build up their financial wealth, build up knowledge. Financing is a part of it, but build up financial wealth. But the bigger thing that people build up is is self-worth and dignity. When when people in a co-op, you have an affordable housing co-op. They come in too often.

Nobody listens to them too often. They don't have voice. But when you can help train them to where they have voice, they see they're listened to. They see that their voice will help them making the decisions. They get, they get self-worth and dignity. And that's the biggest piece of it. And that follows all the way through from the individual to the family to the community. Wow.

So that to me is what I have found is the bigger benefit is the financial wealth. It is businesses that really help community. But at individual level, voice critical. There you go. There you go. What are some things that the benefits or issues with co-opting we haven't covered or talked about or questions I haven't asked you? The benefits, we've talked a lot about the benefits. The only negative that I see is this power grab.

The education has to happen. That's the fifth principle of education, training, and information. That has to happen in order for a co-op to work. The other benefit, though, is we find during the Great Depression, during the Great Recession, that co-ops were more resilient than non-co-ops. Oh, really? Yeah, and that was the reasons I was telling you earlier that you have the people that own it,

they'll do things like take a 10% overall cut in pay. They decide instead of letting somebody go, we'll all take a reduction. The co-op is in the community and when it's in the community and the community knows about it, the community supports it. They support the co-op before they support the non-co-op. I might shop at you opposed to the Walmart. Yeah. And the shared,

the ethical values of honesty, openness, social responsibility, and caring for others. There you go. You got the values of self-help, self-responsibility, democracy, equality, equity, and solidarity.

It's always interesting to me it starts with self-help and ends with solidarity that the people are working together and in the individual is trying to figure out how to how do i work so that i my me and my family are better but how do we do that together and you build community there you go i see the benefits way outweighing the negatives. When the negative happens, though, it's terrible. Particularly if it's not cut quickly.

Yeah. I imagine, like you said, lots of rules and regulations, oversight, you know, all those sort of things that you find you have to do in an organization, you know, and you to do in our organization, you know, and you've got to anticipate for the issues. And do you find you come in a lot to clean up sort of issues like this where a

community is having a challenge and they're trying to figure out how to resolve it? No, I don't do that work. There are some people out that does that work, but that's not the work that I do. So no, I don't, I don't come in. There you go. There you go.

When you go, there's a conference called Up and Coming, and that's for people that are starting food co-ops. They come to the road. So people are working together. And that's the part of co-ops that I really love is how people share, share information. There are some funding co-ops or the co-ops that fund co-ops. Their losses is around 1% to 3%. Oh, wow. Very, very, very, very, very minimal for all of the reasons that we've already talked about. Oh.

So they probably don't go out of business as much because, you because you know i mean if you're an individual business you you have a lot of high chance of failure especially when you're new or market conditions change it probably if you're in a co-op you have a better survival rate right yeah oh yeah i was saying that 10 years from now those co-ops that started today 90 of them will be in business now what you'll find out ch, is as people are learning and putting it all together and trying to figure out how to work together, they may decide not to start the co-op. Okay? But those that get started have a high chance of success.

So what's the best way people can get advice from you, find out more from you on how to onboard with some of your consulting and learn more about co-ops and options they have? So you can go to everything.coop or I am also a consultant for Columinate. It's lighting the path together. We work together to illuminate the past. Dot C-O-O-P. There you go. There you go. And people can listen to the podcast, et cetera, et cetera.

And final thoughts as we go out on the show. If you really want to be successful and you want your family to be successful, you want your community to be successful, then look at starting a co-op or being a patronage to a co-op, buy from a food co-op, you know, do your business with co-ops. It's a way to really help the community and the individual. There you go. And survivalship, too. I help the community and the individual. There you go. And survivalship, too. I love the survivalship aspect. There's so many companies I've started that they just didn't survive, partially because we had too many things going on, too many plates spinning at one time. But, you know, they just didn't hit.

And then I had companies that did hit and did very well for 20 years. And then, you know, the 2008 crisis came. Yeah. You can laugh about it now. And then I 20 years, and then the 2008 crisis came. Yeah. You can laugh about it now, and then I'm going to cry after the show. Anyway, I'm just kidding. I'm over it. But I think I am. I don't know. Do I sound like I'm over it? I don't sound like I'm over it, but I'm being funny.

So thank you very much, Vernon, for coming to the show. We really appreciate it. Thank you, sir, and I'd love to have you on the show, and I want to get you to be a co-operator. Let's chat about it. You've got the foundation. You know what, though? I don't work along with other people.

That's my issue. That's why I'm an entrepreneur. So there you go. Anyway, Vernon, thank you very much for coming to the show. We really appreciate it. Thanks to our audience for tuning in. Go to Goodreads.com, Fortress Chris Foss, LinkedIn.com, Fortress Chris Foss, Chris Foss, one of the TikTokity and all those crazy places on the internet. Thanks for tuning in. Go to goodreads.com, Fortress Chris Foss, LinkedIn.com, Fortress Chris Foss, Chris Foss, one of the TikTokity and all those crazy places on the internet.

Thanks for tuning in. Be good to each other. Stay safe. We'll see you next time.