Co-op Structure and Value Flow

Welcome to an exploration of the cooperative structure in game studio development, a model that redefines the traditional workspace by prioritizing collective ownership and shared decision-making.

In this article, we will look at the unique facets of a co-op setup, examining its foundational principles, operational dynamics, and its inherent benefits and challenges. We’ll also discuss how this structure aligns with values like inclusivity, democracy, and sustainability and explore practical aspects such as legal frameworks and governance models.

Co-op Basics

Let’s start by talking about co-op basics. Co-ops are a unique business model distinct from other business corporations. They can produce products or offer services that can be for-profit or not-for-profit. They’re not attractive for investment by default but can be structured for preferred shares in for-profit co-ops. This is a lesser-known setup that we’ll get into later.

Let’s look at four ways co-ops differ from corporations.

Ownership and Voting

One is ownership. Shares that are issued to owners don’t change in value and can’t be transferred. They’re independent of value, regardless of what happens to the co-op. However, members can exit and sell their shares back to the co-op. This varies from province to province a little bit, but generally, there is a minimum of three directors required legally by the CRA (or Revenu Québec).

Voting: one member, one vote regardless of shares. This is important and a huge difference from typical corporations. Some of you may have indulged in Succession over the years and know shareholders have a lot of power based on how many shares they have. But in a co-op, one member gets one vote regardless of the number of shares they hold. Profit is distributed to members based on shares after expenses, reserve funds and other goals that can be set by the co-op.

Structural Overview of Co-ops

A typical structure for a co-op has members at the top. The members elect directors, and the directors hire management. Management generally hires or pays workers who are members (or they could be contractors). When the workers are the members, that is a worker co-op. That is how worker co-ops work from a purely legal perspective.

If you’re a consumer or producer co-op, your members make a product or provide a service. You’ve probably seen grocery co-ops or farm co-ops. In Alberta, you might be familiar with farm equipment co-ops as well. In any case, ultimately, the members benefit.

Collective Mindset

It’s important to remember that collectivism is at the heart of what we’ve been talking about so far. Co-ops support collectivism in a unique way, where every member is entitled to one vote regardless of their shares. Legally required governance enforces the development of shared values, as we have discussed previously. Shared values, in turn, encourage consensus-based goal setting, which cultivates a collective mindset. Collective goals lead to resource sharing, creating a cycle of mutual support. This interdependence is precisely why co-ops are ideal for collective thinking and developing collaborative processes.

If you haven’t registered your co-op yet, here are some things you want to know. There are boilerplate bylaws available, but they don’t say much about what members get or the expectations of shares or value. You have to go beyond that. If you go to a legal service or a lawyer to register your co-op, they will probably give you these boilerplate bylaws. Even if you go through a paid program, like Ownr, you might not get information on how to read them. There are differences between federal and provincial registration, affecting how you do business and the services you offer.

Gamma Space’s Node-Based Model

So, let’s talk about how Gamma Space fits into something like this because it’s a subject we can talk about. We’re in it, we’re operating it. Gamma Space is a node-based not-for-profit. It is driven by our values framework. Members develop studio relationships with each other, and we ensure value flows to everyone participating. And we’re working towards a regenerative ecosystem of those flows.

We are different from other studios because we have been involved with both members and non-members for over 10 years. Non-members are not part of our cooperative but are actively involved with us through Slack and other ways. We have not cut them off, and although they do not receive the same benefits as members, they still contribute to the community. Some non-members have even ended up working with members or collaborating with us.

  • Nodes provide roles and activities for members.
  • They replicate the co-op’s decision-making processes and report internally to themselves.
  • They receive and/or contribute to resources based on the co-op’s business model.
  • They report and are accountable to the co-op as a whole.

Value

Let’s talk about value. People often bring up practical considerations like not working for free and not asking others to work for free. These ideas are well understood, and we fully support them. It would be unethical and antithetical to our mission to do otherwise. We need to be transparent about what we’re building at all times. 

For some co-operatives, members need to make a buy-in, which can be financial or some other agreed-upon commitment. For example, at one point, Mountain Equipment Co-Op required members to pay a yearly fee, which helped them build up the capital to fund their operations. There are also grocery and farming co-operatives that require a buy-in. 

In a worker co-operative, members may need to contribute a certain amount of money or time to earn ownership shares. Credit unions are an excellent example of this. The important thing is that everyone understands what their ownership entails, whether it’s through a financial investment or sweat equity. 

Shares in a co-operative don’t increase voting power, but they can be traded or valued in some way to honour an agreement. For-profit co-operatives can also bring in non-voting investors who get preferred rights to extract value from the co-operative. These investors don’t have any say in how the co-operative is run, but they get the first cut of profits. 

It’s up to the co-operative to decide the value of these shares and how important it is to have operating money on hand. If a member leaves and wants to cash out their shares, the value must be filtered through the investors first. Ultimately, the co-operative values and priorities should guide all decisions.

When a member decides to leave, they can withdraw the value they have put in, which is based on the number of shares they hold. But if your co-operative has a complicated share structure, and a member decides to exit, it can create a difficult situation. You should discuss what happens if the co-op doesn’t have enough money to pay the exiting member or what the exiting member is entitled to. This is particularly important to consider for worker-owned co-ops. While this may not be immediately obvious for game studios, it is more evident in brick-and-mortar businesses where there is a tangible product or service.

Accommodations and Accessibility

This is a conversation that is constantly happening. It allows for experimentation. But most of all, it allows for the broadest range of participation and capacities. Some might ask, “What about accessibility?” What about people who do one thing really well, learn at different speeds, or have different learning needs? If you have this granularity, it can be accommodated from the ground up – instead of waiting until you get the money. 

And because it’s so granular, it can be assigned to any type of work, including member-created games. The way our studio works is that every member is working on a game. It’s one of the conditions for membership: A game project. It can be very slow, it doesn’t have to be your masterwork game – but you are developing a game to participate in your own personal development and potentially work with others.

And that’s why we have value flow.

Value Flow in the Studio

We characterize value in our work in four ways. The first is livelihood work, which is the work we do for money that is client-facing or deliverable-based. We represent this value internally with the 🌽 (corn) emoji. The second way is intentional work, symbolized by the 🎯 (target) emoji, which involves direct participation and support we offer to another member because we feel the same level of support from them. This is like a sophisticated bartering system where we can intentionally record, denote and share an exchange of value that isn’t actually transactional. It’s based on mutual respect and trust, where we agree to help each other out without any expectation of immediate return. 

The third way we value our work is through community work. This is the work that glues us together, and is often (otherwise) invisible. It’s about social cohesion and collective benefit. For example, someone has to make sure to remember to do the filing for x, or someone has to post that social media reminder, even if there isn’t a role yet. We track this type of work, which is often overlooked but essential for the community to function smoothly, with the 🚰 (potable water) emoji.

All three of these values are transmutable and negotiable. It takes time and space to work these things out, but aligning with our values is important to have a grounded community. This is why we are so focused on values.

Personal or self-work (symbolized by the 🌀 cyclone emoji) is the final flow we consider, with an understanding that personal growth and development ultimately benefit the community. It should be an integral part of our values. It can’t be just an occasional thing that happens on professional development days or when there is enough money to spare. We need to make room for it and structure it reasonably with our ultimate goals at the top of our minds. Everyone has their own version of this, including spending time learning Godot or a new feature in Unreal or something like that. Personal investment ends up percolating up to the rest of the community. And we track it, but it doesn’t necessarily get transmittable in the same ways as literally as the other three.

These are absolutely not prescriptive ideas, by the way. This is how we are experimenting with collectivism and meant to be an example. If you’re on the journey to creating a collectivist studio, you are already helping shape new ideas and concepts. You might use these ideas differently than we do, but hopefully, they get your brain going about the possibilities and why we’re so focused on values.

Co-op Structure and Value Flow

Going back to what we learned about the accelerator earlier, we can now add attributes to it. For instance, the role of being the lead is high intensity, and requires high availability and a strong commitment to stewardship. This means that you’ll need to have access to 🌽 livelihood funds flowing in and out for community development purposes.

Accelerator Node: High-Intensity Roles and Responsibilities

Now that we have established the high-intensity, high-availability, and stewardship commitment, we can discuss the specific responsibilities that come with it. These responsibilities include program coordination, impact measurement, funder presentations, and other detailed tasks. By breaking down these tasks, we can delegate them appropriately and even split larger roles when necessary. We can also identify any ad hoc work that needs to be done and allocate it to members who have the necessary skills. For instance, if a member is close to finishing their own project, we can offer them some extra pay to complete smaller tasks. We have the necessary tools and processes in place to make this happen.

Mapping and Visualizing Co-op Nodes

When we examine our co-op nodes, we can begin by placing things where the ins and outs are. We can contemplate the idea that publishing is in livelihood (it’s actually out livelihood as well), as it supports the community as a whole. We can start mapping and visualizing what this looks like in detail. This process helps us model our studio and bring clarity to our work.

It may take a while to get here – it’s a cumulative process. And it requires patience.

Value Accounting

Let’s talk about how we discuss value accounting. We need to do this at every level of our nodes, with our various projects and commitments with each other. We look at the value flow assignments we have tracked and discuss them in detail. The conversation is based on our recorded information, but the anecdotes are equally important.

For instance, when someone spends a lot of time on a task, and it takes an emotional toll on them, we should consider that in our value accounting. This emotional hit can impact their ability to work on other tasks, and we need to be flexible to support them. We should make room in our budget to support members who do this work, even if it means working an extra day. It is not something that should be expected of them all the time.

Addressing Workload Challenges

At the budget accounting meeting, you might think, “We don’t have the budget to pay for this task we’ve asked one person to do!” One person is doing a hard task, and nobody else can or wants to do it. The person is now asking for livelihood flow because the task took away time from other important things. The team is asking them to do it again next week, but the person is feeling the strain. They ask, “Can someone else take this on for next week, knowing that it’s affecting me adversely? I can provide you with all the information you need, but I need a break from actually doing it.” In this way, you can transform this from a burden on one person to a collective support effort. By sharing the workload, you can ensure that no one person is overburdened.

Technology

Some co-ops (e.g., DisCo) use blockchain and DAOs to track work, but we reject that approach. It is critical to prioritize human conversation and measure it against your values. This allows you to practice and understand power dynamics. We cannot rely on computers to make these decisions for us. The decision-making process has to come from conversation.

This process may feel incredibly slow. We’re developing an entire business model around it, and collaborating with many people with unique perspectives. Distributing resources fairly is essential, and we have clear ideas about the attributes that matter. We haven’t discussed these attributes in detail yet, but we will later.

Role Differentiation and Team Development

Under our roles, we have categories for intensity and expectations. For example, we differentiate between stewardship and simply completing a task. We need to clarify the requirements for each role and determine if we have the necessary expertise. If not, can we train our team members to fill those gaps? We need to weigh the pros and cons of investing time into training versus immediate productivity.

Prioritizing Fair Wages and Sustainable Business Models

We have experimented with various business models, including contract game development services and web development. However, we now prioritize a model that provides immediate income with fair wages for the most number of people. Although it may be more challenging to implement, it allows our team members to invest in their own projects and secure production funding for their work within a shorter time frame.

Conclusion

Coops represent a transformative approach to collective work and creativity. By embracing a model grounded in shared ownership, democratic governance, and mutual support, we pave the way for a more inclusive and sustainable video game industry. This article has illuminated the key aspects of implementing and sustaining a co-op structure, highlighting both its potential to empower and the challenges it may present. Next, we will look at decisions, conflict, and prioritization

Questions to Consider

  • How is value communicated and tracked within your co-op?
  • How do your values inform roles and skill development?
  • Is investment important to you?

This content was developed by Gamma Space for a 2023 Baby Ghosts cohort presentation. We have summarized and adapted it here.

Table of Contents