Co-op funding, public goods, and slow-build

I was listening to the excellent interview with Zebras Unite in the latest Humane Tech podcast. Their efforts are just great, fully understanding the problems with capitalism and VC stuff particularly.

The concern I have is that starting a co-op still requires a lot of up-front investment. It’s a big step to reject the VC approach and instead accept a reasonable return that doesn’t require insane exponential growth. It’s one thing for a co-op that provides scarce goods or services to create some business plan that at least justifies some modest investment that can later get a return. But I’ve been asserting all this time that there’s no profit to find with public goods specifically.

The summary statement is that if 99 of 100 VC startups fail, the profits from the one success need to cover all the losses and far more in order for the VC investors to keep functioning. By contrast, helping a greater portion of co-ops succeed will work without so much return from each. But many co-op startups still fail. And public-goods projects have even less capacity for profit and return-on-investment.

Are we stuck having something scarce be the focus of a business model in order to get startup investment? E.g. a public-goods project that focuses on being paid for custom development and support services that are profitable enough somehow.

If we go all the way to imagining a project that has no scarcity to offer exclusive access to (not even any meaningful say on investors directing the priorities), then I think we’re left with slow, public-funded development. I mean like a project that starts with some vision intriguing enough to get some people to fund it simply to see it realized for the world. The ongoing funding continues simply because the funders appreciate the progress they see. This could accelerate bit by bit. The key point is that it has no big startup investment. Or maybe the startup is a simple grant.

Snowdrift functioning could basically spread the burden wide enough and slow enough that patrons are okay with just losing small amounts here and there to projects that struggle and eventually fail — as long as several others keep going. The dilemma is how to kickstart this whole dynamic, the whole functioning of the crowdmatching slow-over-time mechanism and social understanding. Maybe the answer is that we do need kickstart-style initial boost and crowdmatching… and there’s no mechanism to spread-the-burden of kickstarting a public-goods co-op. The only way got really going was because us co-founders took on thousands of dollars and hours of personal cost without any potential for return, and that’s obviously not an option for most cases of otherwise worthwhile public goods projects (nor was it enough for given that we failed to avoid pitfalls in the starting up process).

In practice, even though I support the ethics of Zebras Unite and other co-op efforts, I have seen almost none of them be projects focused on open abundance. They are working still within the bounds of exclusivity and scarcity in most cases, even though they are aiming to be ethical and sustainable within that.

Can slow-build crowdmatching be enough without some up-front kickstart capital for public goods projects? Maybe. We didn’t have crowdmatching itself working to help Snowdrift even push off slowly at the beginning. But maybe the kickstart dilemma remains a real obstacle as well.

What am I missing in my overview of this public-goods funding context overall?