Your Undivided Attention - An Alternative to Silicon Valley Unicorns

Episode Date: June 30, 2022

Why isn't Twitter doing more to get bots off their platform? Why isn’t Uber taking better care of its drivers? What if...they can't?Venture-capital backed companies like Twitter and Uber are held accountable to maximizing returns to investors. If and when they become public companies, they become accountable to maximizing returns to shareholders. They’ve promised Wall Street outsized returns — which means Twitter can't lose bots if it would significantly lower their user count and in turn lower advertising revenue, and Uber can’t treat their drivers like employees if it competes with profits.But what's the alternative? What might it look like to design an ownership and governance model that incentivizes a technology company to serve all of its stakeholders over the long term – and primarily, the stakeholders who create value?This week on Your Undivided Attention, we're talking with two experts on creating the conditions for humane business, and in turn, for humane technology: Mara Zepeda and Kate “Sassy” Sassoon of Zebras Unite Co-Op. Zebras Unite is a member-owned co-operative that’s creating the capital, culture, and community to power a more just and inclusive economy. The Zebras Unite Coop serves a community of over 6,000 members, in about 30 chapters, over 6 continents. Mara is their Managing Director, and Kate is their Director of Cooperative Membership.Two corrections:The episode says that the failure rate of startups is 99%. The actual rate is closer to 90%.The episode says that in 2017, Twitter reported 350 million users on its platform. The actual number reported was 319 million users.RECOMMENDED MEDIA Zebras Fix What Unicorns BreakA seminal 2017 article by Zebras Unite co-founders, which kicked off the movement and distinguished between zebras and unicorns — per the table below.Meetup to the People Zebras Unite’s 2019 thought experiment of exiting Meetup to communityZebras Unite Crowdcast ChannelWhere you can find upcoming online events, as well as recordings of previous events.RECOMMENDED YUA EPISODES A Renegade Solution to Extractive Economics with Kate Raworth: https://www.humanetech.com/podcast/29-a-renegade-solution-to-extractive-economicsBonus — A Bigger Picture on Elon & Twitter: https://www.humanetech.com/podcast/bigger-picture-elon-twitter  Here’s Our Plan And We Don’t Know with Tristan Harris, Aza Raskin, and Stephanie Lepp: https://www.humanetech.com/podcast/46-heres-our-plan-and-we-dont-knowYour Undivided Attention is produced by the Center for Humane Technology. Follow us on Twitter: @HumaneTech_

Hi, everyone. It's Tristan. So this is going to be our last episode for a few weeks because we're taking July off, but that makes this a perfect time to explore our back catalog. Our episodes go back to 2019, but there is relevant today as ever. If you want to learn about cults and how we gain sovereignty over our minds, check out our conversation with cult-de-programming expert, Stephen Hassan. If you want to learn about what civil war looks like in the digital age, check out our conversation with Barbara F. Walter.

and if you want to hear about social media's big tobacco moment listen to our conversation with Facebook whistleblower Francis Howgan. You can find those episodes and much more at humane tech.com slash podcast. And with that, here we go. Why isn't Twitter doing more

to get bots off their platform? Why isn't Uber doing more to take better care of its drivers? Well, what if they can't? Venture capital-backed companies like Twitter and Uber are held accountable to maximizing returns to their investors. When they become public companies, they become accountable to maximizing returns to shareholders. And they've promised Wall Street outsized returns, which means Twitter can't lose bots if

it would significantly decrease their user account. And Uber can't pay their drivers a better wage if it competes with their profits. what's the alternative? What might it look like to design a funding and ownership model that incentivizes a technology company to serve all of their stakeholders over the long term, and especially the stakeholders who are creating the value? I'm Tristan Harris. I'm Stephanie Lepp. And this is your undivided attention, the podcast from the Center for Humane Technology. And today in the show, we're talking with two experts on creating the conditions for humane business. and in turn for more humane technology.

Mada, Zepeda, and Kate Sassy Sassoon of Zebras Unite. Zebras Unite is a member-owned cooperative that's creating the capital, the culture, and the community to power a more just and inclusive economy. Mata is their managing director, and Kate is the director of cooperative membership. Welcome, Mada Zepeda and Kate Sassie Sassoon. Welcome to your invited attention.

So glad to be here. Happy to be here. So maybe just to establish a little North Star for where we're going to head in this conversation. Many people might wonder what do zebras have to do with solving as many of the problems in the catastrophes that we're talking about on this podcast. And I think one of the super exciting things

about what you all are working on is it's going deeper into the stack of the problem, which is the ownership and economic models that sort of set up a perverse race in the first place, a perverse game. You know, we often talk about with Twitter is the problem, free speech or censorship. Well, no, we've got to change the game

of what Twitter is even doing to society. And you're sort of saying, we have to change the game of the economy. And we have to have a vision of an economy that really works for people. And so I would love to just, you know, set the table a little bit for listeners about what is Zebras Unite?

Can you tell the origin story? And then we can talk a little about the difference between zebras and unicorns. Sure. I can take that. We're very happy to be here. So Zipras Unite was founded with four women founders. All of us were building our own products,

and we were told that we had to incorporate as a Delaware C-Corp. We had to create a company, and then we had to play the Silicon Valley game. And as we started to do this back in 2017, what we were noticing is that the structure really incentivized certain outcomes, as we all know about scale and user acquisition, growth at all costs, and making sure that you create as many profits as possible for investors. And so what we realized and what we published in our manifesto, Zebras Fix,

what Unicorns Break, is that the business model is the message. So we believe that the foundational piece to address and interrogate is the business model of these companies. So we proposed an alternative called the zebra. And really the features of a zebra are that it is more about mutualism, shared prosperity. What we were seeing was many of these founders were interested in quality over quantity. And they were really interested in multi-stakeholder solutions. So how might their companies not just serve to make investors very wealthy, but to also benefit

the user base and the community that has created value. So we set that up in opposition to the Silicon Valley Unicorn. Actually, maybe it's good just to explain what is a Silicon Valley Unicorn. Not everyone might be familiar with that term, but just you want to say what, in contrast, what is a unicorn that is typically desired in Silicon Valley? Yeah, so companies that Center for Humane Technology oftentimes refers to and speak about are Silicon Valley unicorns. These are tech companies that are valued at more than a billion dollars.

And by and large, they're taking what's called venture capital, which is very high-risk capital, in order to provide completely outsized returns. If you were to invest a dollar, what you're looking for is $100 or $1,000 or $1,000 or a million. dollars. And so in effect, the type of scale that the social dilemma in CHT has spoken about so beautifully is really that's a mechanism of a Silicon Valley unicorn company. In order to have that type of company, you need to reach that type of scale. And so Silicon Valley unicorn companies are valued at over a billion dollars. They're laser focused on user acquisition. They tend to have pretty dubious revenue models like advertising because those users are not going to be

paying for the services by and large, and so you end up creating a whole system of perverse incentives that we're seeing play out over and over again. So that's kind of what a unicorn is. And there's a massive amount of capital in the market that's available for these types of unicorn companies, and what we are advocating for is that we need many different other types of capital experiments to incentivize other types of behavior. So obviously many listeners of this podcast, when we talk about the problems of social media, misinformation, addiction, fake news, people don't necessarily say, well, why would the funding model, the venture capital that built Facebook or Twitter in the first place,

why would that have something to do with the problems that we're seeing? So do you want to talk about how the venture capital, the capital that funds this, drive some of these problems, because I think that'll set the stage for how new ownership and new governance structures can get us out of it? Sure, I'll do my best. So technology companies don't have collateral. In order to start this, maybe let's just think about if you were to buy a house or if you were to buy a car.

If you buy a house, if you buy a car, generally you have a mortgage or you have an auto loan. And so that thing has behind it a piece of collateral, which is called your house and it's called your car, right? So there's something physical and tangible that you are getting a loan on. The thing about technology is that there's no collateral. There's no physical object there, right? There's just a bunch of bits flying through the ether. I have my computer, but that's not the collateral of my business. And so as you started to have technology companies, you had to have capital that would be able to capitalize these companies that were very risky.

Who knew if a bunch of bits on the internet was going to add up to anything profitable? And so that high risk capital is called venture capital. And venture capitalists traditionally are people who are very wealthy. They have to be what's called an accredited investor. So somebody who's already wealthy worth a million dollars, making $200,000 a year, that wealthy person puts money into a fund, and that fund is this high-risk fund that then capitalizes this technology company. And so that's how you get venture capital. For those of you that are dorky and interested, it goes all the way back to the whaling industry

because whaling was one of those industries that was very risky. You didn't know if you were going to go out with your boat and catch a whale after a year or not. If you've read Moby Dick, there's actually a lot of this in there. So what you have then is this capital mechanism that says, okay, well, this is really risky business. We don't know if anything is going to yield here. And so we want to maximize our returns. We want to get as much money back as possible because this is really risky. And chances are you're going to fail.

So many of you probably know the failure rate of startups, you know, 99 out of 100 startups will fail. And so far as they'll not IPO, they won't exit to the public market, they won't get acquired. And so this risky capital means that when you have a fund, they need to have one unicorn. They need to have one billion dollar company for every 99 companies that they put out there into the world because that one company has to carry the returns for all of the other companies that they funded, right? And so that type of flavor of capital essentially is high risk capital that's creating technology companies that are then incentivized to make as much money as humanly.

possible because you have to have the outsides returns in order to make up for all of those other companies that went bust. And so what you have essentially is a growth at all costs model. So I liken it to, if you were to do this with a car, let's say there were 100 cars on a lot, you decide that you're going to take out an auto loan on one. And as you're driving off the lot, the auto dealer says, we actually are going to need you to get enough value out of this car to pay for the other 100 cars on this lot. So you're setting these businesses up for. a real losing proposition. And what that means is that ethics, humanity, wisdom, care, all of the things that we talk about are not able to be encoded in these business models

for the pure and simple reason. That actually has nothing to do with anything nefarious other than capitalism, but it's basically that that flavor of capital is designed to maximize shareholder returns. And what that means is that all of the problem sets that have been defined by CHT and others are cascading out of the business model. So when we say the business model is the message, what we mean is that maximizing shareholder returns is creating and incentivizing behavior of extractive growth at all costs, shareholder returns. And by definition, there's not a lot that you can do with that, if that's your mandate. These investors have a fiduciary responsibility, meaning they have pledged to get as much money as possible out of these businesses. And so that's why

you have to respect and acknowledge what that flavor of capital is for. 99% of companies should not take on venture capital because they're never going to reach that type of scale. And then what that necessitates is that we need flavors of capital for tech-enabled companies that are the 99% that are not served by venture capital. And then that's where we start to get into all of these questions around alternative capital, governance, ownership, and all of the different ways that you can essentially mix and match. these elements to create more just technology. I'm so glad that you're sort of teeing this up really slowly here because let's make it concrete for the examples that listeners of this podcast will know of. So can Twitter or Facebook not become billion user companies?

Like if they said, oh, shoot, we really want to make democracy work. Let's have these small civic spaces where you have 30-person conversations and Twitter builds features for PTA meetings and parents can get together and talk to each other at scales of about 30 people and not grow to the moon in the shortest amount of time possible, Twitter can't do something like that because it's already signed on to the infinite return growth obligations of venture capital. And once they're there, I mean, there was this early situation I remember in 2017 where Twitter had been reporting to the public stock markets that its user base was something like 350 million users, something

like that. And of course, that was actually counting the bots. That was counting all these fake users. So they actually had a disincentive to clean up and get rid of all these fake accounts because they had already anchored themselves to these expectations that made it impossible for them to do the right thing. A friend of mine in Berlin used to say, you can only have the ethics you can afford. And right now, the venture capital model makes the ethics that we need,

the wisdom that we need, unaffordable to those actors. And just to make this real for a lot of people who listen to this podcast, we have so many people who come to us saying, we want to build a humane tech startup, and they then raise venture capital. And so I think what you're part of what you're getting to is if you start by raising that venture capital,

it might be pricing you out of doing the right thing later when the time really comes ripe. Yeah. So I think Tristan, you just nailed it. I hope everybody goes back and just rel listens to that because that's one of the most succinct summations

that I have heard. So if that is true, if runaway user growth and growth at all costs is the mandate, then where do you intervene? So the question is like, what is to be done?

And there's a lot of hypothesis. about that. We can talk about regulation. We can talk about training technologists around different types of practices. At the end of the day, why Zebras Unite exists is our hypothesis is there are two specific intervention points that you have to press on. It comes down to power. Who holds power, right? So now we have to unpack what power means. Power means who owns this company. There is no better example than what we are living through right now with Elon Musk, choosing to purchase Twitter and essentially taking that asset out of the public market and saying, I own Twitter, a bunch of private equity firms own Twitter, right? Who owns something gives them power

over the decision-making processes of how that company behaves, right? And similarly, governance. Who is on the board? Who is making decisions? You'll recall that Elon Musk was first invited to potentially be on the board of Twitter. And so you look at examples, you know, Nathan Schneider had proposed many years ago that Twitter's user base itself own and govern Twitter. And so what would it look like if the users themselves purchased shares and then the users themselves created the government and structure? And then those users could in turn embark on a great democratic decision-making process of what content should we moderate? Who should be on here? Should Trump be on here or not? So really, foundationally, what we are driving home is that in order to change

behavior, you have to change who has power. And in order to change who has power, you have to look at who creates the value. And so platforms like Twitter, where they have users that are creating the value, are most obviously the people that you might wish to consult from an ownership and governance perspective. And Sassie, I'll kick it to you there because I know that this is now where principles, age-old principles, we do not need to reinvent any wheels here. Age-old principles of cooperative economics now come into play. And so rather than us saying the sky is falling, what are we going to do,

we can actually learn from this wisdom base that Sassy knows and holds and has been a part of establishing in order to inform how we might help these tech-enabled companies. Yeah, that's really it. That's the crux, or at least that's our thesis of the crux, and I would argue from the look back into ancient wisdom

all the way trawling through to the modern moment that who is in charge? really is how you set the tone. And so ownership and governance are the linchpins of how you actually then pull on who is holding what kind of power. You know, the modern cooperative moment, one of the articulations of that was these amazing folks who basically had the exact same response to essentially their town. There was a company town. Venture Capital essentially had captured their entire economic chain. They were living in company housing. They were shopping at the company store. And they just decided to take back economic power by instead of,

of shopping at the company store, pooling their funds, buying a big sack of grain, and then creating essentially a modern consumer cooperative. That is not to say they were the first ones to think about it. This is literally as old as humanity as you can look at almost any indigenous culture and see that those through lines are really present and rich and encoded in tradition. And what town was this, the company town, just to ground this example? Oh, that was the, those folks were the Roshdale pioneers. And when was this? They were, I think it was 18, I want to say it's 1846 or 1864.

It was 1844. But, yeah, so the Rushdell pioneers are kind of cited as the articulators of the modern cooperative movement and the modern cooperative experiment. It's really just that principle of, wait a second, what if we took back? If we were the ones who are creating a value, in that case, they were the workers of a textile town. So they were behind the giant engine that was the British textile industry based on their colonial exports and imports and the really deep wisdom of textiles, right? It's an ancient tradition in the British Isles. they were like actually we're creating the value here why don't we have some share in that let's just start doing that and i think that's one of the lessons that zebras is bringing is you can just start doing this together you can start coming together and creating our own economy by refusing to go down the venture capital route and turning to each other and if it's if we're 99% of the companies out there that are not well served by this capital that's some critical mass that is that is an economic scale in terms of being able to pull to together for those kinds of capital that are not playing the venture capital game and are not

able to play in that arena. There's a wealth of really incredible companies hungry for your investment and giving you some returns, just not 10x returns. I mean, I would love to do the thought experiment with Twitter, like really do the thought experiment. I mean, what would it actually look like to shift to cooperative ownership and governance of Twitter? Just to ground that. So with Twitter, like it's the users, you and I and everybody logs in who makes posts, like we're the ones creating the content. So we're doing the labor that goes, you know, we're the unpaid Uber drivers of driving around attention for the whole world. And we're doing that labor for free. We're generating data, data that gets used to personalize what things go to whom, what would enrich the recommendation systems, the targeting, the addictiveness, all the things that make Twitter operate more and more efficiently. We're also generating that. And so as we're generating all that value, but hey, you know, when's the last time you got paid with a paycheck from Twitter? Like, did you get that in the mail last month? No, we didn't get so. So where is that value going? Well, it's going up into the stock price of this public company.

So, yeah, let's then ask the question, what would it look like to, you know, go and change the DNA, let is the infinite growth obligation on an engagement machine? Let's change that DNA to something that is in harmony or symbiosis with its environment. How will we do that? I mean, I should say this movement already exists, which is called by thisplatform.org, which is very much spearheaded by Nathan Schneider back in 2017. Just jumping in to say that the Twitter handle is at buy this platform. The URL is by Twitter.org.

And the proposal was that Twitter's users should purchase the platform. They should, what we call it, exit to community, which is you have this asset, and rather than exiting it to the public stock market or, having it be acquired, it should be acquired by its users. We went through this thought experiment with Meetup as well. And so for folks that are interested, I recommend checking out by twitter.org, and this has obviously come back to, you know, what would it look like to have this type of exit. And I should mention that Nathan and his allies actually got this proposal in front of Twitter shareholders back in 2017. There was so many people that

signed on to the petition to purchase Twitter from its user base that it was voted on. And now that you have DAOs, decentralized autonomous organizations, and you have Web 3, what you now have is this very toxic, complicated collision where now that DAOs exist, one would look at Twitter and say, we want to make Twitter a DAO. So it turns out, you know, DAWS are this way that we can govern down the road, we can have a DAO, and then we are going to capitalize that by having a venture capital fund that specializes in Web 3 in crypto to fund that exit, and then they will have another scheme on top of that for how those investors get rich. So what's really interesting in this moment right now is you are seeing a lot of well-mitting people inside of the Web 3 space

that are saying, six years later, it turns out we do have the tools to do this, to exit to community using DAWS. But PS, the way we're going to do that is to tokenize it and to essentially add on top of that some type of Bitcoin layer or crypto layer. And then the way that we're going to fund all of that magic is through our venture capital funds that focus on Web3. And so now basically we are just in like a, it's like an endless loop because we still have not figured out the type of non-extractive capital that's necessary to actually incentivize democratic participation and governance. And so we're just about to roll into a tsunami of really bad decisions. I mean, already there because of how hot and heavy people are on Web 3 and how this notion of

decentralization is very sexy. And I think where I've really learned so much from Sassy is that these tools and these structures do not democracy make. There are intensely personal, relational practices of capacity building and trust that are necessary in order to make all of this work. And that gets fundamentally obliterated as we talk about the Web 3 space. Mm-hmm. Yeah, to kind of drill into that experiment, like, to paraphrase Churchill, democracy is absolutely the worst system except for literally every other one, right? So that having a way to actually govern these things is, it is a challenging scenario, right? Like, how do you democratically govern an organization at the scale of Twitter? Like, what would that look like? Well, it turns out we've got some tools for that, right? So one way you could actually do that, so let's put it in a little isolated thought experiment changer, right? We've got a platform, it's got all of these users to, you know, really bring that wisdom forward that you just shared, Tristan. We are providing the value. We are providing the labor, the brilliance, the connection, the humanness of it,

which is ultimately what is being capitalized or being extracted to capitalize and inform all these other ad-based things. So, okay, we've got this lovely platform. Instead of that money going up and driving the stock price, and instead of the decision-making coming from folks who are tied to maximizing that stock price, what if we just flipped it and gave all of the members one vote? And then that vote was for two things. One, electing a representative board of directors who could be doing the governing of what kinds of strategic planning are we going to do, what kinds of feature sets are we going to maximize, what kind of guardrails do we want on our platform, what kind of goals do we have for society because we are clearly operating at societal scale, et cetera, so that everybody, all that one member, one vote, not one set of capital units, one vote, right?

one body one vote is one way you really keep capital from having an outsized influence, right? So one member, one vote. You can vote for that board of directors. And then you could also vote on referenda, right? You could vote on when the board says, all right, this one is important enough that we need your actual opinions and input here. So we're going to put this out and actually take a referenda on X issue or Y strategic plan or Z decision. Right. And so that's, It's a very simple lever. Instead of saying all of the guardrails and constraints and structures that are going to create this space are actually in the hands of a very few people, which just think of it from their perspective.

Say you have a brilliant ethicist in that team. Say you have a staff person who is 150% signed on to creating and centering humane tech. What can they do against the incentives they're stacked up against? right what can especially if they don't have a lot of social capital or power right so but if you just flipped that switch instead of the staff being the ones in charge of the whole experiment if you put the value creators essentially in charge of the whole experiment and put that brilliance and wisdom and need up for a vote and then like laddered that power up into creating the direction of the company it's not going to be perfect it's going to be as perfect as a massively diverse you know emergent group of

humanity, but it's going to be a lot better than a very small group of people with finite wisdom who have an insane profit mode of driving their literal every task, right? The literal every task that I'm doing is a Twitter user. What's my incentive? I want to participate. I want my voice to be heard. I want to hear the voices of other people. I want to be able to find the voices I want to talk with. That's my incentive. So I'm actually able to afford to implement ethical decisions if that's my value proposition, right? Whereas the staff person who must turn out returns with every decision they make,

they're not able to afford that, right? Right. I mean, I think a good way to think about this is how does the priority list of decisions and initiatives in the company get set? A lot of people look at Elon Musk buying Twitter and say, oh my God, well, I think this guy's more on my side than the last team, so maybe they're going to add that edit button

or we can hope there's going to be a couple more ethicists in there. But ultimately, so like, okay, let's imagine we step into the body of the organism that is Twitter. There's like this office, there's like these people, and there's some ranked set of priorities, and there's some objectives, some quarterly objectives. And what decides what that priority list is? Now, let's imagine, like, there's these harms of Twitter,

and there's, like, let's say, certain marginalized communities or international communities in civil war in Ethiopia, where there actually is a civil war going on, and there are sort of, like, you know, spread of information that actually causes more conflict. But those people don't have a seat on Twitter's board, and how many people in the San Francisco office of Twitter have any reason to be thinking about that particular constituency

or people who are getting more harassment because that's a particular constituency and often not males and not white men in San Francisco. And so why would those priorities be set according to that group? And so what you're getting to is how would we come up with a representative set of priorities that relate to the harms that are most salient to the people who actually experience them?

Now, one of the problems, though, of course, is scale. So you have, at the scale of a platform that affects the entire world and hundreds of countries, how do you prioritize that, right? I mean, and also then the code base is located in the sort of central location. So, I don't know, I'd like to keep unpacking this a little bit because I think it's such a good case study. For where do you intervene in the system? We often talk about Dinella Meadows in the leverage points framework. You know, you can intervene in the design changes.

You can intervene in the business model or the capital structure. But let's, like, dig deeper into these layers and figure out how would we, we make it better. Yeah, I mean, I think that's where Zebras Unit has oftentimes said that we can spend our energy playing offense or defense. And so we can continue to talk about Twitter in this conversation, if you'd like. It's not where our highest and best uses in some ways, because our hypothesis is that there are actually a bunch of ethical founders out there that are already creating different

alternatives and models that Twitter could probably learn from. So I think when we start to play defense with tech companies, that's when we start to think about how can we train their engineers? How can we talk about regulation and sort of cracking the whip? And I think that the defensive strategy is one that's very worthwhile, but it's also not where our passion lies much more in 99 founders out of 100 don't even want this to begin with. And it's the Twitters of the world that are taking up so much airtime when really we need to create an alternative paradigm to counter this. And so how do we find the founders who are building alternative companies. And the challenge is that it's not about scale for them right now.

These are really small experiments that are invisible. And so you have on the one hand, I think the strategy that is being sucked into a vortex of how to course correct on platforms that are not only too big to fail, but they're failing. And in the process, they're bringing down an extraordinary number of systems with them. And then where I think our movement was born from and what we really try to focus on and believe is the other founders out there that are wishing to proactively at the jump design companies that have alternative ownership and governance

that are seeking alternative capital so they can make different choices are the types of companies that we need to start investing in and that we need to start surfacing. And I should also say that what's interesting is in 2019 this was kind of under the radar, but business roundtable, which is some of the top Fortune 500 CEOs,

is really those types of companies are, at least in word, if not in action, along for the ride of recognizing multiple stakeholders in companies. And so for those of you that weren't following this notion essentially that rather than the mandate of a corporation being solely to maximize shareholder returns, they then began to consider other shareholders including workers and suppliers and the environment and communities, that's a great place to actually start to have a really rich conversation with those 181 Fortune 500 companies on the stock market that are saying, okay, we recognize that we have to start to do things differently. And so rather than kind of like force the issue down the throats of technocratic billionaires, there are so much opportunity

that exists. DiBrizinoino is international. So you look to all sorts of other countries that have figured this out. And I think that's where there's a lot of really rich experiments to learn from. So the question often comes up, like, what are the examples? Okay, so you say that they're all of these solutions, what are they? So I just want to give some corollaries and sort of get the juices flowing. So most people might have heard of Y Combinator. Why Combinator is this startup accelerator that has spawned any number of great unicorns. It's a resource for businesses to start.

Well, it turns out there's another way of doing that. And this organization called start.coop is an incubator and accelerator for, cooperative businesses. Zebras Unite is a proud graduate of start.coop. And so I would recommend checking out all of start.coops companies where you will then be able to find companies that are very zebra and ethos and that have cooperative ownership, right? So first question we ask, where do these businesses start? Let's think about alternative incubators like start.coop. Then we need alternatives to, you know, drivers co-op. Drivers co-op is a driver-owned alternative to Uber and Lyft. There is a consumer-facing side of drivers' co-op,

but also they're working with the city of New York to transport their foster children and Medicaid patients. This is an entire market that would not be served by Uber and Lyft necessarily, right? Because it's not in their best interest to maximize profit by getting government contracts to help elderly and sick patients. So here you're seeing this dialogue between cooperative companies and the values of a city of New York putting their money where their amount, and saying we are going to prize driver-owned cooperatives.

You look at things like the matriarch fund and when do you think about capital, how are we going to create alternative forms of capital? The matriarch fund is a character-based lending program. Why that is so important is because when we spoke about venture capital, the thing that we didn't speak about is lending, commercial lending. Lending requires collateral. And so why it is that you have such small numbers of women and people, people of color receive loans, if someone were to hear about venture capital, the natural

thing that they would say is like, they should just go out and get a loan. Well, you can't get a loan unless you have credit and collateral. And so something like the matriarch fund is essentially reimagining the measures that we use of creditworthiness and talking about people's character. It's talking about people's involvement in the community. And so what you have is character-based loan programs that are essentially coming out to fill that gap. So that's an example of a capital instrument. And then when you think about Zebras Unite, we have 30 chapters around the world. And if you look at a chapter like Japan as an example, our chapter in Tokyo has now raised over a million dollars for zebra companies in Japan. And what they are prioritizing that's culturally important

to them is companies that are over a century old. You have many companies in Japan that have stood the test of time that are over 100 years old. And so that fund is trying to say we want to incentivize the creation of those types of companies, right? And so the fund that they are raising is specifically focused on century-old companies of the next generation. You have our chapter in Berlin as an example where there, in Berlin, the middle class was very much built by family-owned companies. So that's what their lens is. How do we incentivize and create more family-owned companies that are really building up a middle class? I can't fail to mention what is going on in India right now with groups like the business of handmade, where they are pointing to the 200 million

artisans, many of them women in that country, and many of whom have created essentially co-ops and practices of how to work together through this notion of community and commerce so we can look to their research report on the business of handmade to better understand these corporate structures that are coming out of India. So all over the world, you have these incredible proliferation of experiments, it just really speaks to the fact that each one of these solutions is going to be completely culturally specific. One thing I'd spoken about earlier is when Meetup was up for sale after WeWork was trying to offload it, we did a thought experiment where we reached out to Meetup and said, we want

to acquire Meetup with the goal of exiting it to community. And through some crazy series of events, we got oddly close to looking into acquiring Meetup. And we actually found some investors that were interested. And you can imagine, of course, this asset that has been built up by all the hosts of Meetup, the users of Meetup, it would be such a clear asset to try and exit to community on. And the really interesting challenges were, in fact, not capital. It was there were not a lot of operators or executives or people that we could find who would have the tolerance for the incredibly messy experience of what it would be like

to exit that company to its community, right? There are so many, how do you tell people that they're now shareholders? How do you educate them? How do you go through that type of conversion into user ownership and to employee ownership? And so what's interesting is actually a lot of the failure is not a failure of imagination. It's like a failure of actually having human beings that have the capacity to do these types of exits, to support these types of tech companies. It's kind of like playing whackamol.

It's just like, you solve the capital thing and then you realize that you can't find a CEO who could do a conversion and then you find the CEO who can do a conversion and, you know, it's just, it's really interesting how systemic it is. And so, and to add a social media zebra, you know, I think like one example is Hilo.

So Hilo is a cooperative platform that's being developed that's really focused on these platforms need to be serving a greater purpose and these platforms can actually help to create the infrastructure of ownership and governance so that we can start to vote. We can start to take stakeholder votes. We can start to have tokenization. We can start to have patronage, right?

How do we take a lot of these principles of co-ops and then bring them online? And so Hilo is an example. Another example is social routes. Social roots is another co-op tech company that's very much focused. Essentially, you know, what you're going to hear me advocate for with zebra tech companies, or tech-enabled companies, is a lot of what the verb is that's going to need to get done on those platforms is decision-making, right? It is the expression of ownership and governance that's going to have to start to take place

because those are the highest-stakes activities. Has an exit to community ever been done? I mean, there are many different smaller-scale exits to community that have been done where one example is pixel-spoken, Portland, Oregon, which is a marketing agency that was owned by one owner, and then over the course of time, the company was then sold to employees. So, yeah, I mean, I think in this space we're trying to take the best practices that we've learned from employee ownership conversions and map those onto what it would look like to exit to user communities. And there aren't a lot of those that have been done at scale. So it's a place

that deserves a lot of experimentation, I think. And I've heard your co-founder, Jennifer Brandel, articulate this as like instead of convincing the power holders to let go of their power, create new sources of power. But then the next question becomes, okay, so how do you, how does one build zebras or an ecosystem conducive to the success of zebras without getting killed by unicorns? How do we envision this, this transition? The transition is hospicing out the old, first of all. So I don't think we can talk about this without talking about Margaret Wheatley's tooth loop theory. which is like this notion of patriarchy and power and domination and control and scale and growth at all costs is dying because it's killing us and our planet.

For those of you who aren't familiar with Margaret Wheatley's two loop theory, it's a model about organizational transformation. Something is always dying so something can be reborn. It's a useful way to think about how we might evolve from unicorns to zebras. And so we don't actually even have to worry about the dinosaurs becoming obsolete. It just so happens that they're taking down all of these systems and things that we love with them, which is incredibly grief-inducing. And it's a tremendous experience right now to watch all that they are killing in the process. It's like, you know, Saturn eating his child.

I mean, it's incredibly devastating to watch how you're trying to help these dinosaurs make better decisions. And in that process, Margaret Wheatley describes essentially hospital. workers who come in to try to help that death process be not as violent and harmful as what they're making it to be. But in that process, you have new growth that has to start to be created. And that's where the creation of new power comes in. That's where people actually get energized. That's where you find that there's a lot of creativity, common cause, mutual aid, solidarity, people feeling energized, people feeling like they're creative. And so I think where we are focused on at zebras unite is first of all culture so we have to start to tell these

different stories of these small experiments that are in the culture that are not getting any airtime second is community those founders feel isolated they don't know where to turn to they're looking for business support and recommendations and ways to grow their businesses and they actually need skills and tools in order to grow those businesses and different types of corporate forms different types of incorporation documents you know all of the plumbing that's necessary to create a business, has to be reinvented, and we have to draw on old models in order to do that. And then third is capital. So we need to actually invent new capital instruments, new capital products that are going to serve

these types of companies. And the invention of new capital products is not an insignificant task, right? Because it fundamentally comes down to approaching investors and approaching banks of credit unions and saying the types of things that you believed to be risky and the types of people who you have traditionally excluded from capital markets, you're going to have to take a chance now, you know, because they are the ones that have the solutions that we have been waiting for. And so in order to do that, it's creating the type of capital products

that make them feel comfortable and that show that it's really going to meet a need and there's going to be a financial upside. That's incredibly important. And I'll just, like, even as we are inventing new forms of capital, I would actually say we're transposing in a way Because the kinds of capital that we're talking about, right, like community-based capital, patient capital, you know, things where we can share risk and so redefine risk in the eyes of those who are holding more so that we understand that the many is actually less risky than the one, right? All of that is actually just a return to older forms of organizing how we do this human thing, right? That's a lot of coming together. So I would argue often when we think about, when we get asked this question a lot, scale. How do you scale a zebra type thing? How does zebra-ness scale? I would ask us to really ground back and question what we mean when we say scale. Do we mean one big company, or do we mean noticing and naming the giant sea and ground swell

of all the other companies that exist that are not one company? Now, that is harder to do, right? That is harder to do to see it, you know, tell 99 stories versus one story takes literally more time, literally more energy, but that's the correct allocation of time. You're asking, how do we scale this thing? Tell the story of the 99 things, right? and then actually invest in those and weave them together because that's actually the solution.

As someone who has spent my life swimming in the existing solidarity economy, sharing economy, whatever you want to call it, like it is a giant, vibrant world. It's just sub-rosa because it's not attractive to the narrative that premise is the one. So it's here. We just got to see it. And I think to that zebra, I don't know if we defined this, but unlike a unicorn, zebras are real.

they're both black and white. And what most people don't know is the way that zebras avoid predators is all of their stripes when they get together. A herd of zebras is called a dazzle. And it's that dazzle that creates confusion because the lion doesn't know which one it's going to go after. And so to Sassie's point, the way that you create an alternative is to create diversity and multiplicity and volume of these different types of experiments, all of these different founders of a different stripe. And then it's through that, that it's a confusing. using pattern because there isn't one. That's the beauty of creativity, right? And so that's actually the protective apparatus in answer to your question, Stephanie, of how we're not going to

beat the unicorn. We're not going to beat this idea of competition. But we have, you know, in the Darwinian sense that is often overlooked collaboration and cooperation is also a survival mechanism. And that's our hypothesis. So first of all, I love that you're just bringing up that if we don't have a positive vision of where we want to go, then we're just left with dystopias all around us, right? That's actually one of the things we really wanted to cover with you for this podcast is, you know, we're aware that we cover some dark topics on how the current cancerous sort of infinite growth obligation structures, like you say, you know, break our world. And we do need to have a positive vision for an alternative. And I think the Bucky Fuller

quote that basically something like, don't try to change the existing paradigm, make it obsolete by creating a new one. Now, but that brings up some really interesting questions because there's this question of can the new one out-compete the old one when you have Metcalf monopolies where the Metcalf aspect is the Metcalf law that, you know, a power of a network grows with the square of its members. And so you have a network where I don't want to use seven different currencies. I want to use one because that gets me into all of them. I don't want to use 80 different social networks, even though plurality is better. I want to use just the one that gives me the maximum reach where I can reach the most number of people. And that's kind of where the challenge has

always come up is if we want to buy Twitter or turn it into a Dow that's for the people, well, how are the people going to get the capital to do that compared to the venture capitalists who already have billions of dollars that can actually buy it? So one of the problems is if we want the people to be able to do it, where we're out competed by capital itself. The people don't have nearly as much capital as these sort of handful of smaller actors that can kind of do it. So I guess the question I want to get to is, how do we create something new that is defensible

in the face of these older structures. We know the older structures don't work. We know that they will eventually cannibalize the life substrates upon which they depend. But the problem is they can keep doing that for so long until it's too late. And what we're trying to figure out is how do we accelerate a transition

to something new that is defensible? Sort of like can the peaceful tribes out-compete the warlike tribes? We can create a peaceful alternative, but if they just get killed by the warlike tribes, that's kind of one of the big challenges that comes up. Yeah, I just, I think that we are not going to out-compete this. This is not about competition. It's just, it's, what's going to happen is we're all experiencing the climate crisis.

And so it's going to come down to who's around the corner that has water. And, you know, so I think that we are in a position now where we just can't even be operating at that type of globalized scale anymore because it's going to come down to our immediate communities. Altoson, one short example that bridges the gap here as well, though, for those who are thinking about scale as part of their solution set, right? Because when we talk about a Cambrian explosion of solutions, I want all of them. I want all of them in the room, right? So one example that is very deeply place-based and very deeply relational and paradigm shifty is actually the Mondragon Corporation, which some of y'all may have heard of, some of you may not know. For those who don't, it basically was started as a

resistance and self-survival movement in the Basque region of Spain with a very visionary human, Father Jose Maria Arias Mendierreta, who came together and said, hey, we should actually, we are oppressed peoples. We should own the means of our own production and we should own the means of our own banking and we should own the means of our own housing and financing, et cetera, et cetera. And they, you know, at this point, are a cooperative federation that is a global company that has worker owners in a federated network of co-owned and co-operated global consulting firms, manufacturing firms, banking firms, child care institutions, grocery stores, etc. And they're all, they are deeply a zebra company, and they have scaled.

So to really, like, draw how that is possible, but they have scaled because they are serving a deeply place-based and deeply, like, needs and connected and relational community and the needs thereof. So that is really the route that Zebras is arguing for, is that as we think about how are we going to make outsize impact, it's not through one big project that brings everyone into the tent. It's through a million little projects that then builds our own tent together.

So, you know, speaking personally for a moment, I in the social media space have been working for something like eight or nine years now on how are we going to change the system. And I've been on my own journey, right, of thinking about at the beginning. Maybe it's like we just got to get them to make different design decisions. And if we could only get those engineers to think differently, then maybe, you know, those engineers at Facebook or Twitter would just change the virality of the system. and if we could just teach them or we could just talk to them about it, and we could have a collaborative conversation, and then you realize that as much as you have these good intentioned employees at these companies, they're bound by the incentives,

and so they don't do the things that are so obvious to do, and yet you would just have a really positive conversation with people who seem aligned with you, but then they're trapped inside that same set of incentives. Another thing that kind of comes to mind, though, is how much of my time and the community that I think I'm a part of has spent just hours and hours trying to convince a small number of people to do something different than what they're doing.

And what a waste that is, right? Like, is a way to spend a life to be trying to pull in the pant legs of a small number of powerful people to try to get them to do something different that they don't have an incentive to do differently. And, you know, I want to also applaud that we have had some positive changes

that have come from that. But what you're really talking about is how do we liberate the 99%'s creativity to be building brand new systems, to actually be able to build the world that we want to live in, the adjacent world that our hearts know is possible. So Kate, what's the zebra movement need and what actions can our listeners take?

The zebra movement needs more zebras to self-identify and come to the table. The zebra movement needs capital. So it needs people to be awakened to our mission and how it is actually not just going to have positive social returns, but can have positive economic returns. And it needs people to join on to the great project of, of changing their mind about what's time and energy, quote, unquote, efficient, and start investing in building the deep and complex relationships with their livelihood, with their economic livelihood, with their products, with their markets, et cetera, that will generate this fertility of, well,

what if we just owned this? And then we took it over, and then we operated in that fashion. So people really need, you know, capital, culture work. and to start really mindset shifting from quick, fast scale to deep, rich connected. So join the community and then maybe join the co-op and then join the party. Join the dazzle. Join the dazzle. Join the dazzle. Mara Zepeda is the managing director at Zebras Unite, a member-owned cooperative that's creating the capital,

culture, and community to power a more just and inclusive economy. She's also a senior consultant and board member at Harkin, which is devoted to helping newsrooms, companies, and organizations meaningfully engage their audiences and communities. Mara is passionate about empowering communities to help each other meet their needs, circulate social capital, and increase economic mobility. Kate Sassy Sassoon is the director of cooperative membership at Zebras Unite and a Zebras Unite founding member.

She's also the founder and principal at Sassy Facilitation, supporting cooperative communication. Kate is a lifelong cooperative advocate and is devoted to creating efficient and ethical processes for high-impact collaboration. The Zebras Unite co-op serves a community of over 6,000 members in about 30 chapters spread out over six continents. Learn more at Zebras.

Your undivided attention is produced by the Center for Humane Technology, a non-profit organization working to catalyze a humane future. Our executive producer is Stephanie Lep. Our senior producer is Julia Scott, mixing on this episode by Jeff Sudakin. Original music and sound design by Ryan and Hayes Holiday, and a special thanks to the whole Center for Humane Technology team for making this podcast possible. You can find show notes, transcripts, and much more at HumaneTech.com. A very special thanks to our generous lead supporters, including the Omidio Network, Craig Newmark Philanthropies, and the Evolve Foundation, among many others.

And if you made it all the way here, let me give you one more thank you to you for giving us your undivided attention.