Resonate - Music Streaming Platform Coop

Hi Sam, and welcome.
I've been aware of Resonate for a while now, and very interested to learn of your plans. I've got no particular answers to any of the questions you raise, but I'm working on a comparable project that I think bears some similarities in that I'm very interested in the use of blockchain tech to facilitate governance, and the use of the fairshares model. I think these two elements together can potentially create some important infrastructure for the next wave of digitally enabled cooperatives. I've no major insights to share at this stage, but I am interested in walking the path alongside you, if you are willing. :-)

Hi @samtoland great to have you here :) I've also been following Resonate :)

I'll try to answer some of your questions and ping @roryridleyduff1 @roryridleyduff again to in the hope he'll come and chime in too :)

(1) I'm not sure if there are yet any existing FariShares Cooperatives that have actually got outside investors (it's still a new model), but the model is certainly designed to accommodate it and does not just tie investment to participation. There are four classes of shares 1) founders 2) employee 3) users & 4) investors - the first 3 classes are primarily to do with governance, and the last one is to do with normal investment capital.

(2) Again, I'm not sure if there are yet examples of FairShares Co-operatives with international membership, but it is certainly possible. The administrative burden isn't too high either. Slightly less administration for a Company than for a Co-operative Society (and a Company quite possibly more suited to your needs too - shares in Societies are par value and cannot go up in value, whereas shares in Companies can).

(3) I don't see why this wouldn't be possible. In some ways both musicians and listeners are users of the platform, but I can see why you might want to treat them differently.

(4) Rory would know more about this but I'm pretty sure some people in the US have adopted the model and soon it will be very international because Social Enterprise Europe Limited have just got some funding to create FairShares Innovation Hubs in Germany, Latvia, Holland and Croatia, see https://www.facebook.com/FairsharesAssociation/posts/841807905920840

(5) As far as I'm aware the only platform that has already legally adopted the model are http://anyshare.coop/ although it does seem quite a few others are exploring possibilities (but, again, as far as I know this is all still very early days - I'm not even 100% sure AnyShare have actually legally incorporated using FairShares model rules yet - and even if they have they are clearly still in very early days too).

BTW, on the blockchain + FairShares stuff @richarddillon1 colleuage at FairMondo UK Jack Thorp might be work touching base with as he was working on something similar for his Masters, see https://github.com/JackThorp/masters_project (of course, there are plenty of other similar projects too)

Thanks for answering all my questions Josef! :) Gareth Wright from CoopUK had suggested I reached out to you - happy to find that you did so first!

It's interesting that we may be one of the first Platform Coops to adopt the Fairshares model. From your and Rory's past answers, I believe from a structural perspective the model is flexible enough to meet our needs (and indeed the commitments we have made already to our different stakeholders) as a private co with coop bylaws.

I still have to get my head around how the different share classes, and more importantly share issuances, function in practice (I believe I understand in theory at least!)

Thankfully I'm engaged with Rory regarding this, so should hopefully overcome this issue, this week.

The next issue will be reconciling the model articles with our bespoke requirements, and any Estonian particularities. :) - Rory's guidance here will be important, as we don't want to ruin the inherent balance in the model.

I spoke with Bob and Richard the other day (just about, Skype wasn't cooperating ironically), who related some of there experiences and connected me with Jack - who I look forward to speaking with soon.

I am also very likely to adopt a Fairshares model. Will be nice to start sharing experiences & learning from & with each other with such a new structure. My personal perspective is something is indeed missing from the traditional choices & Fiarshares may well be the answer.

Hi Sam - a few clarification on Josef's comments:

(1) I'm not sure if there are yet any existing FariShares Cooperatives that have actually got outside investors (it's still a new model)...

I can confirm that Graham Boyd at Dojo4Life (a UK FairShares Company) has issued investor shares. The AnyShare Society in the US also has Investor Shareholders after a conversion from a private company to FairShares.

(2) Again, I'm not sure if there are yet examples of FairShares Co-operatives with international membership, but it is certainly possible.

Yes - AnyShare Society have over 50,000 members of their previous platform effort (Mass Mosaic), but I think at present they just have Founder and Investor members while they finalise the 'Qualifying Contributions' for Labour and User members.

(3) I don't see why this wouldn't be possible. In some ways both musicians and listeners are users of the platform, but I can see why you might want to treat them differently.

I would recommend that 'Labour' members are on the production side of the supply chain and 'Users' are on the consumption side. While there may be sub-groups within these, can you see a good reason for them to have different voting rights (or to be separate groups). If not, then these categories should suffice. If yes, then Somerset Co-operative Rules provide an interesting precedent to learn from.

(4) Rory would know more about this but I'm pretty sure some people in the US have adopted the model and soon it will be very international because Social Enterprise Europe Limited have just got some funding to create FairShares Innovation Hubs in Germany, Latvia, Holland and Croatia, see https://www.facebook.com/FairsharesAssociation/posts/841807905920840

This is correct - although I misreported Latvia - it is actually Hungary. This is a 2 year project to introduce FairShares to these four countries. We also have agreements in Keyna, and have bid to introduce it to Tanzania.

(5) As far as I'm aware the only platform that has already legally adopted the model are http://anyshare.coop/ .... I'm not even 100% sure AnyShare have actually legally incorporated using FairShares model rules yet.

I can confirm that AnyShare.coop and Dojo4Life both incorporated using our model rules in 2016. Before them, Co-operative and Social Enterprise Support Ltd (2013) and the FairShares Association Ltd (2015) both incorporated using adaptations of the model rules, and have traded for several years (at a low level). We've also drafted rules for:

Ooooby UK Ltd
For Good Cause Ltd
Faithstar Foundation

We expect at least two of these to incorporate soon (Ooooby and Faithstar), but we're not so sure about For Good Causes Ltd.

There are many others where we have supplied the model rules, but have not been asked to draft anything. As we do not police incorporation, I'm not sure how these have progressed.

Sam,

Thanks for the chat - sounds like you will be able to adapt the FairShares Company model rules to your needs with a bit of thought. Here are the latest model rules for a company - V2.1 includes clauses for online decision-making / general meetings.

If you need help with customization, I can also share what others have done (they are Creative Commons too).

Best wishes
Rory

Thanks again for your time Rory, very appreciated. It does appear that FairShares fits our needs with a little tailoring.

I think I'll start a thread once I have a working draft - and if you or the community have time to make suggestions, comments, it would be most welcome.

(If you can forward any insights into customisation, would be much valued).

Watch this space! :)

Another question would be - does another Fairshare co-op have formal rules dealing with membership applications and membership revocations? There don't appear to be specific rules regarding this in the model articles - everything hinges of qualifying contributions?

It is counter productive to write the application process into the model rules themselves because the arrangements will vary so much from enterprise to enterprise (and even between legal form). In earlier versions, we did say "after one year" of work / trading members quickly realised there are (would be) numerous exceptions to this.

This entry in the Wiki may help - there are even music Coop examples

http://www.fairshares-association.com/wiki/index.php?title=Qualifying_Contribution

if you want to see this in practice the attached PDF will help - it provides information and invites applications via a Google form which are then peer reviewed by members.

On leaving membership, this is covered in various places (Clause 10 indicates that Labour and User shares are cancelled if a member no longer fulfils the qualifying contribution). Otherwise, in Clause 51, it mention that members can resign or leave by mutual consent after the satisfaction of all contractual obligations. In short, neither party can unilaterally end membership unless contractual obligations have been fulfilled unless there is mutual consent, or the qualifying contribution is no longer fulfilled.

It might be good to make this clearer in future iterations of the model rules.

Hope this helps.