Ep. 7: Scaling Economic Democracy with Joseph Cureton

Written By Andrew X

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  • [00:00:00] Joseph Cureton: It's not only about making money together. It's also about putting those resources that we make – profits – somewhere that benefits all of us, not just some of us. That learning and the vision for scale – "We're going to blow this thing up. We're going to change the world..." – we can actually change it faster together, right. Better together. And with more resources together. So we should just do that. If we're going to do it together, we got to figure out a way that matches both our values (what we care about, what we believe) and what the market actually can bear. Those two factors – our values and the market – have to coincide. And we're creating our own markets. We're entering into new markets. It's all about figuring out how we exist together. And so that's really what the Genesis of Obran is – that struggle. Figuring it out together and understanding that we've rooted in values, growing and expanding, serving our members, building institutions, creating things that challenge and equity, and don't shy away from the problem but face them head on.

    [00:01:09] Naima Penniman: You ready? We gettin' down to business. Investing in existence. Shifting from a system, steeped and extraction, that steady sapping our peoples and planet to cash in, slashing widening gaps in our access to land, wealth, peace, satisfaction. Imagine basing relations on more than transactions. It's time for new pathways, and we need to shape them. Through our inner landscapes, our relations, our approach, our dedication. We're on the road to repair as a commitment to transformation.

    [00:01:42] Show Intro: Welcome to the Road To Repair – a podcast, exploring our journey out of a business-as-usual economy toward collective healing and liberation. We are your co-hosts Andrew X, Jessica Norwood. And I'm Nikishka Iyengar and we're very excited for this conversation.

    [00:02:01] Andrew X: Hi, I'm Andrew X, back alongside you as we traverse this road repair. And in this episode, we'll take a deep dive into the theme of organizational structure. If you've been accompanying us so far in previous episodes, you may recall mention of the framework we often use that looks at four levels: personal interpersonal, institutional, or structural and systemic.

    [00:02:23] This episode really zooms into that structural aspect. Organizational structure is one of those topics that quickly become rather complex. And we'll be inviting in a little bit of that complexity as we drive home the larger point of how structure can (and arguably should be) explored as a potent avenue for creative expression of the values that underlie this work of repair.

    [00:02:46] We'll explore how one particular enterprise demonstrates how we can facilitate repair through intentional design of the structure of our organizations. I had the privilege of conversing with my friend, Joseph Cureton, Co-Founder and Chief Coordinating Officer at the Obran Cooperative, the first worker-owned conglomerate, where his work focuses on bringing new worker-directed enterprises to life.

    [00:03:08] Joseph is a serial entrepreneur and founding member of CORE Staffing, Bmore Black Techies and Tribe Works – all projects that fight to overcome the challenges faced by modern workers. He's also a software engineer trained at Drexel university and classically trained chef by trade, picking up some credentials from Johnson and Wales.

    [00:03:32] So welcome Joseph. I'm really excited to have you on the Road To Repair podcast. This is round two for us. First time that we talked, I interviewed you on the Next Economy Now podcast, and that was such a rich conversation. I learned so much in our relationship has just been growing from there

    [00:03:48] Everything comes full circle, and I think we reap what we sow a lot. And you know, one of the seeds that we sewed together was, you know, getting the message or the idea of Obran out there in the world. It resonated with a lot of people and really what has been amazing outside of just connections and relationships, one of our individual contributors that now has actually moved to our executive team, came to us because he heard us talking together.

    [00:04:11] The fundamental thing that resonated with him was this alternative model that was what he felt was with different, was new, was exciting, but also grounded in something. So I love talking to you because I think you have this ability to ground stuff and also to be exploring the new, exploring the different, exploring the innovative, but not losing sight of that initial seed, that initial grounding of what we're trying to get.

    [00:04:33] If you happened to hear the previous episode where I spoke with Leah Penniman of Soul Fire Farm, you may recall some of the core themes of our conversation on economic biomimicry repeating throughout my conversation with Joseph. The theme of disposability – for example, particularly the disposability of black bodies, but also in general – it's very present here, even in the genesis of Obran. And spoiler alert: its founding organization was founded by formerly incarcerated folks. The story of Obran's genesis, though, is better told by Joseph himself.

    [00:05:03] Joseph Cureton: We actually started in 2016, early 2016 in Baltimore city. A group of guys came together, formerly-incarcerated folks – so, people that just came out of prison and jail – and really, they didn't have two nickels to rub together, but they understood a pretty obvious thing in the market, which was that they're getting exploited, they're getting extracted from. The easiest thing that they could do was to say, "actually, no, I'm not going to be a part of this anymore. I want to build something different. I want to build something that suits my need, that actually fulfills something in me that I need, and also serve as a customer. That was our genesis – super, super humble beginnings.

    [00:05:38] Andrew X: From that place of humility and seeking to respond to some needs in the community, you recognized the need to create some infrastructure for yourselves but in a way that creates solidarity and transforms inequity,

    [00:05:49] Joseph Cureton: Everything that we do all of the time is pointing to filling a need, but moreso than that, is serving our members, creating institutions, and creating structures that recognize inequity, recognize why things are the way that they are, and faces it head on, and fall short a lot, but faces that head on and really build something to address and then hopefully, to, you know, to move through and through something else when it comes to structures and literal infrastructure problems here.

    [00:06:20] Andrew X: And that led you to create the infrastructure for a staffing agency.

    [00:06:24] Joseph Cureton: So we started staffing because it was a low resource, low- capital need business. It was a business that the three guys knew. They had been staffed out before they had been the employee of staffing firms. There's nothing between you and the customer that you're serving. And so they really felt "if we're going to start something, it better be something we can actually do with our hands or, you know, or with our minds, it better not have any intermediary between us and the customer."

    [00:06:47] So staffing was easy to start, easy to get going built relationships, which was the other key piece. That starting point was the first company Core Staffing. And so we ended up running for the first about, you know, year or so growing that small business, that teeny little micro enterprise into an actual small business.

    [00:07:03] So Obran itself is a worker-owned cooperative holding company. What that means is that we have the one co-op. Not a federation, we're not a group of businesses. We are one worker- owned cooperative that goes out in the world and finds businesses that are meeting the needs of a customer, meeting the needs of community and bring those businesses under the cooperative through acquisition – through traditional leveraged buyouts – and we invite workers, the employees, to be part of our membership.

    [00:07:34] How we got there is actually super interesting. So, Core, our first business, serving returning citizens, Baltimore city grew and evolved. And I actually helped start our second company, Tribe Works, out of a Meetup group, you know, technologists of color in Baltimore city. You know, Baltimore city is like 60% Black, yet in the tech community, it's like, "Where's Waldo?" And , I was a little fed up with it. I kind of just put out a shingle and said ," Hey, if there's other folks in the community, they want to chat about this stuff, come out!" in the first year we got to about a thousand people on the Meetup page. You know, we had really amazing growth when it comes to just collaboration, community, education, all that kind of stuff. And really the evolution to business was pretty natural. This just makes sense for us to provide services, as well as education, to the folks that were in community with.

    [00:08:17] Really those two groups side by side, growing in parallel, came together at the end of 2018. I was the bridge between the two. And I was like, "y'all are doing a lot of the same stuff, right? The business model is literally the same. We should just at the very least talk about how we can actually learn from each other."

    [00:08:33] At that point, Core had actually matured into a co-op had matured into some democratic principles, and had matured into understanding it's not only about making money together. It's also about putting those resources that we've made profits somewhere that benefits all of us, not just some of us. That learning with the tribe technical ability and the vision for scale – and both organizations, both groups are like, "We're going to blow this thing up! We're going to change the world!" And it's like, well, we can actually change it faster together. Right? Better together. And with more resources together. So we should just do that.

    [00:09:07] Ultimately the groups got together and they decided, "Alright, well, if we're going to do it together, we got to figure out a way that matches both our values, what we care about, what we believe, and what the market actually can bear. And so those two factors. The market is real. We have to be yoked in this idea that our values and the market have to coincide. And we're creating our own markets, or entering into new markets, or, you know, it's all about figuring out how we exist together. And so that's really what the genesis of Obran is, that struggle, that figuring it out together, and understanding that we've rooted in values and we're growing and expanding, serving our members, making things happen, building institutions, creating things that challenge and equity, and don't shy away from a problem but face them head on. And so for us, that's our "why".

    [00:09:56] Obran was birthed out of what was called Staffing Cooperative. Our goal for staffing was pretty clear. It was an easy market to understand, but we got anxious. We got to impatient even. We can't actually make any more than our contract says, even though we add value to the firm that we're serving.

    [00:10:14] So hold on a second. We can actually do more than just serve a customer that then serves another customer and so on and so forth, right? We can actually look at how we can grow to meet the needs of, not only our members and their customers, but also how we can actually grow it to meet the needs of markets and our economy and our place or community.

    [00:10:34] And so for us, that natural expansion to move past just a contract and into a community. It was a no-brainer. And moreso than that, it was an easy leap when we had already done construction. As an example, with staffing that we understood the market. We understand how to swing a hammer. We understood that, you know, the payers are over here and, you know, we got to buy some things [over here], like we get that. What the problem was was we needed to own the firm. We needed to actually grow up a bit when it came to our central "why" and really live into it, really actually do it. And so in 2019, we actually turned the corner on a strategy to make that real.

    [00:11:09] And we developed this Obran acquisition plan. We developed this idea of a conglomerate cooperative. We didn't know it, but I think that we might have been the first to look at the world in this specific way. I'm sure that there's other examples co-ops going out and buying other entities or assets, but we're a teeny bit of different. Our, a little bit of spin on it was that we thought that one co-op, that was worker-owned could have multiple entities that were just that, that were the vehicles that were you know, utility in the market. And that when we go out and do an acquisition, we might not even have to buy the whole company at once. We could do 51% and control the entity and then move into assets further down the line or further downstream. We started with construction and we finished our first acquisition at the beginning of 2020.

    [00:11:55] And really that of solidified it for us where we saw both... And we can talk about Appalachian Field Services, the amazing folks that came into membership with us but also were already doing some great stuff, you know, before we even got there, we're already doing some great stuff, but we really saw this as like, "Aha! Okay. I got it." We can grow inorganically through acquisition, entering new markets, serving new customers, growing our market share, not to just suck out all the profits in the market, but to redirect them to do things like buy housing for our members. We've always been housing unstable in Baltimore city. Education for our members who had always yearned of, like "I need to learn how to do X, Y, and Z." Well, let's actually provide you with some resources to do it. It's better for you better for us, better for your customers, better for the community. Like duh. That evolution is still in process, but our core strategy and how we grow is centered, is yoked in this idea of, you know, looking at a system, looking at a structure and an institution and challenge the inequity in it and actually go forward and do stuff and experiment and try and grow.

    [00:12:59] You know, again, don't get me wrong. Somebody accused us of being the Unilever of co-ops the other day. And I'm like, "I mean, No, but also I get what you're saying" and so, you know, Unilever were, we're a different company... potentially... I mean, I would love to redirect profits that Unilever is having in a different, you know, in a different way.

    [00:13:19] So, so yes, but we're looking at something that is giant, but not giant. We're looking at something that is localized when it comes to redirection and redistribution, but we're also looking at something that, that does have scale and we want to get to that scale. It's sort of baked into the DNA of the company.

    [00:13:35] Andrew X: So interesting that Joseph frames this in terms of the DNA of the company and how that relates to this idea of economic biomimicry. It's an easy analogy and a reminder, we can look to strategies and principles in nature to express our own nature economically and otherwise.

    [00:13:51] Joseph Cureton: I do think at a first principle level, that all structures or systems, organizations have a root in. If you look at almost anything, when it comes to organizational development, almost all things do have some reflection in nature – down to the growth-at-all-costs, platform capitalism that we see. I mean, like, cancer is a natural occurring thing. We're going to go through things together. And one of those things is this boom-bust cycle of capitalism that we have right now. It just will be. And until we shift away from it, and the system will shift away from it, I mean, just inevitably, we're sitting here living with cancer.

    [00:14:29] Andrew X: A core part of the lens that I'm bringing to these conversations is "economic biomimicry," particularly around this metaphor of soil and amending the underlying conditions. And from the gate, these men said to themselves, "This business-as-usual economy approach doesn't work for us." Recognizing these conditions and saying, "Wait a second. No. Let us tweak this so that the soil or DNA, the foundational level of the organization is amended. And through that initial reparative action, then building toward larger systemic reparative impact." But let's hear from Joseph how that process actually played out.

    [00:15:02] Joseph Cureton: Ultimately for us, it came down to two big questions. So the first was we had to reconcile this difference in wage and this class issue. So ultimately there is a difference in market value. What the market will pay you to do a job – to swing a hammer versus to type on the computer – but we don't have to do that. So our internal structure had to look at beating hearts, had to look at what your effort, what your contribution, what the productive use of your time was, not what the market dictated as an exchange or price value of your time.

    [00:15:42] And so the way that we did that was we said, "Well, everybody, you know? Well, we have one membership for patron members and I don't care if you make $20 K or $120 K, you're still a member." And when we distribute profits at the end of the year, it's distributed on productive value, not on the price point, not on the price value of your labor. So that was one big key characteristic that we had to design for – just period had to. Recognizing inequity and actually confronting it and saying, "it's going to be messy when somebody makes $20 K and somebody makes $200." They're going to have some issues with each other. But if we all know that at the end of the day, if that person produced in excess 30% of their pay – so they actually cleared for the co-op profits and the $30 K benchmark, and the others did the same or better? mean, the redistributive value of that – so that the ability to actually route that back – should it be equal. It should be commiserate to the productive use.

    [00:16:41] The second feature was governance and control. And so for us, the conglomerate, or literally the ability for us to grow as a group one unit versus what traditional cooperative economics has shown – including Mondragon, including, you know, Emilia-Romagna, including all the..., you know, Arizmendi in the United States –is that federations of independent worker-cooperatives has been the norm. That has happened. You know, even Mondragon is a federation of independent cooperatives. And what we saw and the big thing, the itchy part of us was like, "Well, if we federated, that would counteract that first point that we made." In the market then, my $200 K from my co-op would, yes, it would be redistributive, but only of those folks that are in the band of making $200 K. How does that work? How is that in confluence with the interests of one beating heart, together, doing the dang work. How does that work? And so we said, "Well, no, actually we shouldn't federate." And we lost some people because of this decision – also just FYI. Folks were in the very strong, "I want to federate!" camp; "I want subsidiarity. I really want to control my business only and like, screw off." As well as the, "No, we need to conglomorate. We need to be together. There needs to be solidarity in that way and we're actually better off in the market for it." And that camp won.

    [00:18:05] Andrew X: Allow me to quickly summarize what Joseph just shared. In holding true to this value of economic solidarity, instead of scaling their cooperative business through a cooperative federation of businesses, they chose to remain as one business in service to its members and retain the ability to equitably recycle collective wealth back to all of the workers of its market-facing enterprises through what are called patronage dividends, which are the method cooperative businesses use to distribute the business's earnings with its members in profitable years and is allocated on the basis of the contribution of their labor relative to their fellow worker-members.

    [00:18:40] Joseph Cureton: And so, ultimately, the goal of the... you know, there's two big questions, you know, everybody together and the, and the question of federation, you know, combined to create this cooperative conglomerate model, but we still had to deal with the legal questions of how do you create a system that is not federated, however, is unified. That is actually together. And so the way that we did that was we said, "Alright, well, co-op is a co-op. Like, it has its features. It has, you know, the patronage membership, capital account balances. It has distributions or dividends based on those patronage and our worker cooperative is based on hours, not on, you know, seniority. We can have that scalar effect, but we decided not to. And, you know, we can also still have equity investors in our co-op. There is a thing called an "investor membership" in a cooperative. That was innovated twenty/thirty/forty years ago. But we don't want it all to be under one big sloppy, messy pot. We kind of needed some good strong governance checks on where we're going. So we actually decided to do two things. One is, we decided to acquire the two businesses that were joining, bought a piece of paper, and then we bought the other piece – so, you know, Core Staffing and Tribe Works. And we said, "Okay, now we own these two things. That was easy. That was an acquisition. We just, we just did a leveraged buyout." But we did it with, the equity that had already been built in those businesses. And then those members had taken that equity and put it into the co-op and then we bought those, you know. So it was like a $0 transaction, but that made sense to us. We were like, "Oh! So these entities, they're like vehicles." They're literally like a car or a house or a, you know, any other physical good that you want to buy. A business is just that: it's an asset. And that property, that asset should be used and viewed in that way, too. So the co-op, beating heart, the organism has multiple assets. There's multiple properties. So it's the ability to grow through acquisition, inorganic rhizomatic growth. But the business also should be thought of as an organism too, in its own. Right. So for us, we said, all right, well, how about the board? How do we structure the governance of the subsidiary? And we thought, well, downward pressure will always be coming from the co-op to perform in the market. Always! In order to reinvest back into our membership – remember our members are all the employees of the companies – so in order to invest in our members, we have to actually have things to invest. So in that case, those things have to actually turn out free cash flow. So there's always downward pressure from the co-op, but there has to be upward pressure, both from the customer and community, as well as from the workers themselves back into the co-op. To say like "No, no, no. It's not all about profit maximization here. There's also our customers and community to think about. There's also our workers, our peers, to think about. So that's the upward pressure from the worker, from the labor. ? And we said, "Alright, well, how do we represent that? It's... It's a big circle. How do we put it in? Or how do we put it out?" So we said, "Alright, well, you know, the majority of the board and the subsidiary should be of that subsidiary, should be workers of that board. We should still have some control because ultimately we own the property. Ultimately, we own the asset – the co-op does. So we do have a vested interest in seeing that property, you know, perform. So we also have representation. And ultimately we can finance this entity. We can grow it through equity or debt investment. And, you know, again, I don't want cancer to form, so I'd much rather, you know, if I have cancer in my, in my hand, I'm not trying to cut off my hand, then, you know, stab myself in the heart.

    [00:22:02] So, you know, we can invest and grow and have the seat, but it can't be cancerous. It can't actually overtake the body. And so in that sense, what we're doing is we're saying, "Well, that subsidiarity is still there. There's, there's a bit. You know, that company has its own board. It has its own workers. It has its own management, leadership staff. It really wants to perform and serve its customers serve its community. You know, in all intents and purposes, it looks a lot like a capitalist firm. Doesn't it? But ultimately, what the big difference here is, it's connected to a big body of other people and workers trying to do the same – that central "why".

    [00:22:34] Trying to, you know, you know, look at those inequities and challenge them daily in their life. And so ultimately, that's how we structured the governance layer at the bottom, at the subsidiary level. There's one other nuance. We then said, "Alright, well, if that's the case, we've got this co-op and then we've got these operating businesses, and those operating businesses are going to go out and do great things. Cool. But what about trying to do an organizational development lift (ie: going out and inorganically growing through acquisition, and we don't have any expertise in the market). How are we going to do that? I don't know anything about home health. I'm not a home health worker. I have mad respect for folks that are able to do that.

    [00:23:09] I know that I am going to be a fish out of water there. But we know that that market, we know that that's a place where the cooperative advantage, where our dynamics, where the things that we bring to the table will really grow. And, you know, I think we'll create a paradigm shift in that market. How do we get in there?

    [00:23:25] So the way that we did that was we said, "alright, well, our subsidiaries that we own, that the workers are on the board of, that we control, those are industry specific. So, we look at construction, staffing, technology, health, you know, media, and we want to grow inorganically through acquisitions against a thesis, against an idea, a position and approach in the market."

    [00:23:46] And so we need a leader to make that happen. You know, and this is another fish out of water thing. Like I know that there's a lot of collective management styles in this space. And we think that there are leaders out there that there are people that are the tip of the spear. That's a role. That is just a role. And we want to leverage those roles. Not because it's exploitative of them, not because we're putting them on a pedestal, but just like, I don't know anything about home health, there are people that know a lot about home health and how to lead and have a thesis on that. So we should find them and we should actually empower them. We should resource them in order to do that. And so that's what we did. We said, "Well, these groups, the companies that we buy actually are not just that. We're actually growing in a group and that group needs to have a focused thesis that has an approach, that is differentiated, that can win in a market. And when I say. It's not only profits, but it's also, again, challenging those inequities. Going back to our central "why" in a market? And so for us, that's how we structured it. We said, "There's a subsidiary of the co-op. It goes out and makes acquisitions, or startups, but acquisitions in a market, mainly. And we grow. And we grow and we grow. I know that that sounds very American and growth-at-all-costs, but it's not growth-at-all-costs. It's growth to create a big-enough entity that allows us to do what we said in the beginning, that allows us to look at our members and their customers and community and reinvest at appropriate levels to challenge those inequities that we're seeing and confront them head on and really actually put our money where our mouth is when it comes to operations and governance – in both sense. So leadership is only a part of it. It's also governance of those entities. And again, the market-facing ones.

    [00:25:24] Last, last, last thing is our co-op board is also a reflection of those values. Our co-op board is always majority workers. Representative of our, both, democratic process – so open and fair elections (something that we really actually hold dear) – and also a reflection of who our members are as well. So we think about race. We think about class. We think about what markets we're in. And we will grow and evolve and add and change and be flexible, but we will always be majority-owned by those serving the customers and communities in question. And not because it's solely some lefty political thing, but we just think that they're better stewards. I mean, they're the ones that are actually going to be producing. They're the ones that are creating those productive economies. So they should to be the ones central to the point. We also have investors on the board. So I'm just going to put that out there that we're not anemic and we don't believe that capital is a bad word.

    [00:26:17] We think that it is blood in the system and ultimately that blood in the system is just that it's real. It's just blood in the system.

    [00:26:27] Andrew X: The business dynamics of cooperatives, as with many features common to the emerging "next economy," topics, which we discuss on this show, are not yet widely taught in business schools. So many of us may not yet be familiar with how they operate differently from businesses that we might be more familiar with. Totally okay. We're all learning together and part of the intention we're holding in this show is to make some of these features more visible and accessible. There are many types of cooperative businesses and worker-owned cooperatives are even more unique in that they represent the beginning and the end of the value stream of an enterprise.

    [00:27:03] Like soil serves as an ecological foundation for an ecosystem, labor serves as an economic foundation for an enterprise. As such, we could imagine that, just as it's optimal to build soil fertility through nutrient-cycling, for example, composting, which is recycling the surplus back into the system after the harvest.

    [00:27:24] If we understand the value of investing in our foundation, one could make an argument that it is optimal to build collective wealth through investing in the labor at the foundation of an enterprise. Localized nutrient-cycling. Localized wealth-cycling. In systems thinking nerd speak, this is called a "reinforcing feedback loop", which many of us know simply as a virtuous cycle.

    [00:27:46] Earlier in this episode, I referenced my previous conversation with Leah Penniman and here again, we touch on some of the themes that we discussed, particularly moving from the degradation of linearity to closing the loop. We see that theme repeating here as Obran's structure forms, not a line, but a circle. Business-as-usual enterprises with shareholders are typically linear in the value stream that begins with the workers and capital assets and accrues, linearly to the shareholders, following the theory of "shareholder primacy," which generally prioritizes the short-term interests of the capital holding class of stakeholders. Worker-owned cooperatives differ in the sense that the value stream forms a closed loop, a virtuous cycle, a reinforcing feedback loop.

    [00:28:29] And of course, often conditions are such that if we're not proactively investing in virtuous cycles, we can find ourselves caught in a vicious cycle of erosion caused by the absence of investing our surplus back into our foundation. This is mirrored in how slavery and the disposability of black and brown bodies has in the past and continues to haunt our society.

    [00:28:52] Slavery and labor exploitation are still widely practiced. For example, using the labor of people who are incarcerated – most of whom are people of color – and prospects for the formerly-incarcerated are often not much better. Worker-owned cooperatives and multi-stakeholder cooperatives like Obran that center the interests of the membership class of their workers over the interests of their investor members, these structures can be a great way to bring healing to the wound of labor exploitation and allow them to express their economic solidarity. The team at Obran, however,didn't stop there and innovated on the multi-stakeholder worker cooperative model by expanding what that circle can hold. By remixing a number of enterprise structures to form a set of nested enterprises, that hold true to the principle of economic solidarity while retaining the ability to achieve greater scale and influence in its efforts to transform and repair harmful economic conditions. Joseph breaks down what that journey looked like in practice

    [00:29:50] Joseph Cureton: Obran, as a whole, is a co-op. So a cooperative: Subchapter T of the IRS code of the United States – is defined as member ownership. Member ownership is both reflective of two big key characteristics. One is the surplus capital – or whatever is actually at the end of all the expenses of the business leftover. So, profits. Where that goes in a co-op is the members claim the majority of that surplus value. That's really the first economic side.

    [00:30:19] Then on the other side is the governance piece. And so then the co-op as opposed to any other type of organization, it's "one member, one vote." So that's like the most basic, "what is a co-op?" So Obran itself, the cooperative, limited cooperative association, formed in Colorado is itself a cooperative, claims Subchapter T, has distributions of patronage – which is our use; or surplus capital – to our members and those members include the workers and patron member class, and investors and investor member class and I can talk about the interplay there, but we're majority always owned by our workers and governed "one member, one vote" first of all, to structure the board and also the organization. Then second, to elect the board and any other officer that in our bylaws we'll elect.

    [00:31:06] So, ultimately, we are a co-op. But that being said, we also are uniquely differentiated in the fact that again, we own assets, but those assets tend to be operating companies – not solely just plants, not solely just vehicles, so on and so forth. And we're also a group of businesses. So we also look at markets, and like I was saying before how we're looking deeply at a market and creating a thesis, we also group those businesses under a group (ie: health or technology or so on and so forth) and develop a thesis in which we can go out and win in those markets. You know, when I say, when, again, I'm using that term, but I mean, you know, reflect our values, be able to actually do the things that we say that we're going to do. So ultimately, where I see the biggest difference between us and let's say, you know, pick your local food co-op, is that A), we're not solely in one industry, B) we're not geographically constrained. We want to operate wherever we find great places for our members to work, great places for us to be in service of customers, community. And then 3rd) is that we also see the vehicle of equity ownership in an operating company or an asset, as that. It's just a vehicle in which we can do stuff, in which we can serve or in which we can create value, in which we can be productive.

    [00:32:26] But, you know, I'm trying to steer away from this , you know, "you're not a co-op or co-op-y enough," or "you're too much of a co-op and you're not business-y enough." I think it's actually a false dichotomy. I think, I think a co-op is an organization. And it's not a non-profit. It's a legal for-profit.

    [00:32:41] We can talk to very at length about how Subchapter T can basically look like a non-profit because we're serving back to our members exactly what they created for us. But our goal is also to serve our members. So, in my role in the cooperative, I lead looking at what's over the hill, trying to look five, ten years in the future and really understand where the markets are that we want to be, invest in those – get actual resources out to the actual workers in those, bring in new leadership and talent. And, you know, my end customer, when I'm looking at who I'm serving is my member. The leaders also have that mentality; that their end customer, the people that they're enabling, that they're supporting, that they're, you know, moving forward are the members of their business as an example, or the group.

    [00:33:21] If we're looking at group leadership. That cascading-down the effect of support and that cascading-up effect of service that's the dynamic here. It's not employee/employer because the employees of this company are the employers of this company. And ultimately if I'm an employee and a W2 for staffing, I do, in fact, play the role of employer, of Appalachian Field Services. And I do also play the employer role of Core Staffing. So there's hats that we wear and we put them on and take them off. And we entrust leaders with that. We enable, empower, we give them leadership to, you know, they don't take it from us, but we empower them to do it.

    [00:34:03] And it's good in that way. Like I said before, I don't know anything about home health, but it's a great market to be in. So we need to find time and talent and we need a resource that time and talent in that market. Just like frontline workers need that. So structurally Obran is a cooperative. It owns LLC's or C Corp's as individual entities. Those LLC or C Corp's are able to acquire assets, operating companies or physical assets and grow in a group, growing a business.

    [00:34:28] Andrew X: It's important to understand the three levels of Obran structure, at least as of 2021. So I'll quickly recap. So the first level is the cooperative conglomerate doing business under the name Obran, which is the overarching body that holds everything. Structured as a multi-stakeholder worker-owned cooperative, it acts as a holding company for the enterprises at the second level. The second level is a series of holding companies, each of which have a particular industry focus, for example, in health media, et cetera. And each of these holding companies own the enterprises, which form the third level. This third level are the businesses that are actually the client-facing our market-facing enterprise. It's the workers of the businesses at this third level, who are the member-owners, the workers who collectively own the overarching body, the worker-owned cooperative conglomerate Obran. If that's confusing, or perhaps just for its own sake, I highly recommend viewing the resources section of our show notes for this episode, which includes visual diagrams of Obran's structure.. If you want to see that, follow the link that says Obran's Legal Framework Member Presentation. And we also share a lot of other supportive resources as this episode touches on many things, which not all listeners may be familiar with. For example, cooperatives or patronage, classes of cooperative membership, et cetera, along with some referenced individuals and organizations.

    [00:35:50] So this three level structure describes Obran's legal structure. Now Joseph talks a little about Obran's structure of decision-making and ownership

    [00:35:59] Joseph Cureton: Governance-wise, the cooperative board: owned, controlled, elected by the workers of every company, the co-op's board. The businesses' board: the thing that's closest to customers and close to the community, elected by the workers of that company.

    [00:36:12] We install a board member as well. So we do have downward pressure from the co-op and our leadership is also a cooperative employee. So the leader. Let's say, you know, Appalachian Field Services is a co-op employee and can be fired by the board of that company, which is an important check. So leadership without accountability is a recipe for disaster.

    [00:36:33] So ultimately they can also be removed from that. And let's talk one more double-click on democracy. Democracy is deeply, deeply messy as well. And a lot of times people are like, "Well, it's no way to run a business. Like those are like, how do you run a business and be democratic? You need autocracy. You need strong leadership, visionary leadership." And it's like, that's true. I believe in visionary leadership, but also it's an employee-owned company that's democratically-run. Call a spade, a spade. We need to challenge these assumptions that we're having and make sure that we're confronting reality with what real examples of this look like.

    [00:37:09] Let's talk about equity. When you say equity, you're probably thinking about ownership. Probably think about the control of a firm, and the ability to reap productive returns. For us, equity is two-fold. First is the base level patronage. So I'm going to throw some jargon at you for a second. So patronage, again, that ability to take out what you put in, think about patroning a restaurant, or patron of the arts, or whatever it is that you're a patroning, for us, a patron member is a worker.

    [00:37:40] So they have one capital unit. And that one capital unit is not floating in the market. We're not traded on any public exchange and we're not traded internally. We're not some crypto thing that is floating-point value. We're rooted in one big piece of value and that's whatever we actually produced in a market in order to create surplus cash. And now that surplus cash gets distributed to those patron members by the amount of time that they work. So, think about a big pot or pie, and that's, this is called the "patron member pot," and if you put in one hour and everybody else puts in ten hours. Guess what? You're getting out one out of that total bucket and everybody else gets ten out of that total bucket. Really simple math here. And we keep it as simple as possible so everybody gets what we're doing. We do have investor members. So First, is we recognize that we need capital to grow this. But then the second, is we recognize we need capital at different layers or different levels.

    [00:38:34] And so the first level of this capital is the co-ops capital. And really that investor membership is a feature. It's a way for Obran Cooperative patron members to move out of work, to move out of producing labor and into reaping a benefit of contribution. So it's a mechanism for when you want to leave the co-op, you want to keep your equity – the cash, the actual dollars and cents, that you kept in – move that to a position of investor membership, which has less rights, less actual governance control, but does reap a dividend. We use that money, and you're then paid on the use of the money, instead of, you know, your use of the co-op. So we pay a dividend, you know, target a percent. When we're growing year over year and we're using that cash and, you know, you can keep it in for as long as you want, and all that kind of bells and whistles and benefits. That's really for the members. At each company level – so we're looking at the group now – so at each company that we own, each operating vehicle that we're actually invested in or that we're growing, and we have two features there. First is the ability to go out and leverage

    [00:39:38] (ie: borrow) the balance sheet of that business. We'll borrow money in order to invest that money into a company. So what we borrow at the group becomes equity at the acquisition. We need to clear more than we borrow from the operating company in order to pay off our debts and then make money to the co-op. Simple math: borrow at 10%, make 11%. Really simple math here. Then at the operating company, it's the same. Ultimately at the operating company – really where the magic happens, where the productive assets (not finance, just to finance finance) but actual operating companies – we make a service or we create a product. And we sell that product or we do that service and we charge more than we put into it. You know, make a profit and it flows up the chain. So, you know, again, that's why our two real points of focus: one at the co-op; one at the operating company.

    [00:40:33] Those are where we really look at governance. Really look at equity. Really look at the [balance sheet]. Really look at where we're serving customers and community. Ultimately that is the two points of value exchange, redistribution, as well as production

    [00:40:45] Joseph, let's zoom out a little bit. Talk to me about the vision you're holding and what might need to be overcome in order to get there.

    [00:40:51] So today we have defacto allowed the idea of capitalism to be the company of everyone – everyone's company. My goal, my grandiose vision, Joseph, as an individual is to grow this thing well enough for it to take care of multiple generations and for it to, you know, serve members in perpetuity and for it to be a value to people all the time.

    [00:41:14] Ultimately I think just from a ideological or quasi-emotional intelligence side of things, it feels like the problem set, the inequity that we're actually facing, is less so solely about a condition of a market, and it's more about the underlying ideology in the market. In which case, the big challenge, the big problem that we have to face as a company is understanding that market and using it, leveraging it, but not denying that it exists and hopefully one day supplanting it.

    [00:41:43] Sometimes within an ecosystem, parasitic organisms are dominant, but there is a point at which these more, you know, mutually beneficial type of organisms overtake the ones that are more geared toward a type of parasitic behavior and extractive behavior. Toward one that is more in alignment with a landscape of organisms or organizations that foster relationships of mutual benefit that are not, you know, sacrificing one part of the system to the benefit of another.

    [00:42:12] I mean, I guess what I'm trying to say is if Obran is not the mycelium, if Obran is not actually the thing that actually moves all of the resources around the forest, then capitalism ideology is ruling mainly we're going to be competed away I mean like you're right. Parasitic organisms generally tend to out-compete non-parasitic organisms until some thing happens and the world is just like, "Hey, you know, cancer sucks. I'm going to cut it off." This is was kind of full circle in the conversation. So, you know, the growth, the appendage of one piece of the economy that is just like super fast and growing not even thinking about the rest of the body eventually will die off, but we still got a body. We still got this thing that we need to take care of. To me, it's a recentering on that. I want that to be Obran.

    [00:42:53] Andrew X: I'm thinking of other structures and organizations that Obran is in community with, is in solidarity with. You know, what other innovative structures have you seen, or that you've been inspired by? What organizations or individuals are inspiring you when it comes to these innovative structures that can better facilitate repair.

    [00:43:13] Joseph Cureton: So I feel like two things. One is, I love the idea of economists. I think that the idea that we have an economist as a profession , it tickles me for some reason. Like, the productive asset that they put in the world is thought, which is just a cool thing to commoditize and to try and sell.

    [00:43:31] So Mariana Mazzucato. I've been reading a little bit and listening to her. Love that! I'm informed by also the history of co-ops as a mutual benefit or mutual aid organization. We come from a long history and line of mutual aid organizations, everything from Southern Federation, which is a co-op of small farmers in the South to the Emilia Romagna example, to Huawei the Chinese telecom giant. Or the Federations and all the rest of it. I think ultimately trade unions, also, are really interesting models of solidarity. They have attempted this thing for a long time that we're ultimately doing and have done incredible gains and use amazing tools in order to create a lot of productive value in the world.

    [00:44:11] You know, think about it the weekend. Holy shit, we have a weekend. That is a new thing. And like that is a thing that is a productive asset to our actual beings of human life. We need rest. Weird! And ultimately I think where I'm sitting in just proximity to racial privilege and, you know, the proximity to economic privilege, to me, it feels like the markets are the markets. In Baltimore city, I'm thinking about some of our racial justice organizers that are here and like really understanding that, it is community that are the major creators, you know, producers of most value in the world and are generally often the most excluded from the surplus of that productive value.

    [00:44:47] And so, you know, I am interested in the proximity the co-op, has to everything, even if I do have these grandiose ideas of trying to figure out how to, you know, challenge dynamics and confront inequity and all the rest of it. But I totally understand that we are one of many demonstrations of things that need to change, but I hope that we're one that works!

    [00:45:06] Andrew X: Oh a critical one! Here we are on the Road To Repair podcast and maybe just to bring the conversation home, what is it about Obran's structure and, you know, potentially other things like culture, what is it about Obran that facilitates needed repair in terms of social justice, in terms of economic justice, in terms of racial justice?

    [00:45:25] Joseph Cureton: My mom has a saying, speak with your feet. You know, the reason why we create the things legally or economically internally is because we're speaking with our feet. We're putting our money where our mouth is – and now I've used two analogies back to back. I think at the end of the day, incentives and understanding why really is at the core or the most critical component of it is understanding where water flows in a system.

    [00:45:48] And if water flows and pools in one area, generally it'll actually do some damage if it's not actually continuing to move. And so for us, we're just trying to identify those places where water's pooling up, where it's not doing any benefit to anybody, and make it flow. And that includes healthy relationships with our members.

    [00:46:04] We have so much drama built into who we are as human beings and expressed through our structures, expressed through our organizations, expressed through our relationships to one another and power. And, you know, don't get me wrong. We fail a lot – a lot, a lot – when it comes to trying to understand how to keep the water flowing in that way.

    [00:46:20] But we try. Right. I think that's the biggest piece is we can't stop that. We can't stop trying. And so for us, I think that's really the... when I say for us, I also mean myself first, and then my members that I know and I'm community with every day. You know, we all fail. We all are not getting there, but to me it feels like it's the effort in the right direction. And when I say right, it's not like a morality, justice piece. It's more of a systemic understanding how-things-flow piece, and tinkering with the machine to make it work for us – as opposed to shouting from the rooftops " you're doing it wrong." Do it wrong, but do it wrong together and figure out how to make it better to hurt less.

    [00:46:59] Andrew X: In examining Obran Cooperative as a model example of how repair can be expressed through intentional design and structuring of our enterprises themselves, I have to acknowledge that this innovative model is still young while also acknowledging the deep history of cooperative tradition and solidarity economics in which it is firmly rooted, but whether or not it ultimately succeeds in its aspiration – and we certainly hope and believe that it will – there's much to be learned from its story and example today.

    [00:47:35] Joseph, this has been such a delight to drop in with you around all of this again. I know that there's some incredibly exciting things that Obran is up to right now. And I just want to give you space in these last few moments to kind of share some of that and how listeners might get involved.

    [00:47:49] Joseph Cureton: First is a clearing call to all folks that are interested in joining. Our mission, our why, our central purpose starts and ends with people. So if you're interested, always reach out: joseph@obran.org. But more than that, I think, you know, from a resource standpoint and from a capital standpoint, we raise funds in order to do this acquisition work. It's not philanthropy. It's not charity We raised productive assets and we deploy those productive assets into the market. And, you know, for us, the effort, there is one proprietary bespoke fund it's $30 million in total size. The other is a more micro search fund accelerator program.

    [00:48:21] And those search fund accelerator programs are, you know, again, that's the tip of the spear. So that's resourcing those folks that are actually going out and doing the work. But on the capital fund piece, you know, we have a business model built around deploying capital into the market, into this specific mechanism, the cooperative conglomerate model. And we help our businesses grow and our businesses, evolve – both through access to capital and acquisition advisory support, as well as others. So, you know, this is not just Obran, but if other folks are interested in doing, you know, inorganic growth through their cooperative or through a business model that does model this idea of challenging inequities at the community and the customer and is worker-owned. We definitely are interested in helping. Our three points is, you know, join us. I'm happy to have conversations with folks. We always are interested in figuring out how to get into new markets and how to attract new talent in order to actually run that way. And the third, of course always is. If you're looking for places to put your assets, your productive capital to use, we definitely are interested.

    [00:49:13] Andrew X: Joseph, this has been so fun. Really appreciate you. I appreciate you. This is awesome. Thank you for doing this. Like seriously.

    [00:49:22] Show Outro: Thank you for joining us on the Road To Repair. Our greatest hope is that this show will have a transformative impact for those of you tuning in. The Road To Repair podcast is produced by Andrew X, Nikishka Iyengar, and Jessica Norwood with amazing post-production support from FRQNCY Media. Music for the show was produced by Andrew X in close collaboration with artist and sound designer, Zachary Seth Greer, and the luscious vocals and original poetics Naima Penniman. Shout out to Sofahood for all of the amazing artwork. You can check out more of all of their great work on their websites, which you can find links to at www.theroadtorepair.com. We always love the social media shout outs and you can help this message ripple out to those who might really benefit from it by rating this show and leaving a review on Apple Podcasts. And if you feel so called, you can make a donation to support the show at www.theroadtorepair.com. Thanks again for tuning in and stay tuned for our next episode.

    [00:50:21] Naima Penniman: We stand with the land. We are far more than a commodity. We join with the water. Our bodies are not property. We're reclaiming our shared sovereignty and shaping an economy based on reciprocity. Co-operative, accountable, ground in justice, peace, and ecology. The empire is toppling who want to be about this prophecy. We've been summoned to the summit. Trust we here for something. What is now possible? Who are we becoming?

Andrew X
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