Start-ups, research and development

The problems

The first problem for a new venture is that if you want to employ people, own or hire assets or enter into other longer-term agreements, even have a bank account, you need a legal structure.

The second problem is that the usual approach to developing a new business is to start with an idea, get the people you need to bring it to fruition, and then look for the money (capital) to enable it to happen. As a result, most business development is capital driven and then investor-owned, which leads to the third problem.

The third problem is that since the legal structure mostly used is a company limited by shares which has a private purpose, the focus of the business becomes generating an economic return to attract capital, rather than simply bringing to fruition the business idea itself. 

Consequently the business world mainly comprises entities trading for private purpose which are all competing for their particular private interest. As a result the normal basis of business relationships isn’t trust, but a legal contract to make sure the parties get what they negotiated – you might actually say it is mistrust.

The impact

The impact of all this is that save in exceptional circumstances we have lost the opportunity to start business ventures on the basis of trust; and to carry on business on the basis that everyone gets treated fairly; and to make sure that the focus remains on the business, rather than on making the business generate the profits which the owners expect.

It is possible, of course, to set up a co-operative which aims to treat people fairly, to operate on the basis of trust and other core values, and make sure profit maximisation isn’t the driver. 

But it’s more difficult than that. The business development environment and culture doesn’t work that way and wants the new business to fit the usual approach. There is an expectation of using the usual contracts to establish relationships, but this doesn’t really suit.

In short, a system designed for capital-driven business isn’t well-suited to cooperative business development.  Traditional start-up business support isn’t particularly helpful. This is borne out by the small number of new cooperative enterprises compared with others. And the pressure on co-operatives to behave like traditional businesses.

A solution – the Innovation Cooperative

The Innovation Cooperative aims to provide the support structure, services and networks needed to build a co-operative economy.  It could be described as an umbrella structure, beneath which those willing to commit to cooperative values and principles can work together.

The members of the Innovation Cooperative will be organisations and agencies wanting to support and promote co-operative development, and any who want to commit to its agenda and use its services. It will enable new ventures to ‘pop-up’ beneath the umbrella, and be part of a network of like-minded organisations who want to work together collectively.