Yochai Gal has been instrumental in founding two worker cooperatives: the San Francisco TechCollective, and more recently, the Boston TechCollective in Somerville, MA. Yochai was born in Israel but raised in California and started repairing computers when he was 17. He has long had an interest in worker-ownership, and when he couldn’t find a worker-owned tech business that needed his skills, at 23 years old, he decided to set up his own.

He and his fellow co-owners opened the San Francisco TechCollective in May, 2007, with a 20K line of credit from Wells Fargo, 14K of which they used and then successfully paid off. The business has a storefront in the Mission District of San Francisco out of which they handle consumer and small-business IT support and specialize in data recovery.  The collective currently has six worker-owners and they are successful enough to pay themselves above-average wages and excellent benefits. They are the highest-rated IT company on Yelp in the Bay area.

In 2011, Yochai relocated with his wife to Boston, and in May of 2013 he launched the Boston TechCollective with a new group of co-owners, assisted by a 70k loan from the Cooperative Fund of New England. The Boston collective currently has six worker-owners and hopes to pay off their loan in about another year.

Recently, the two TechCollectives and C4 Tech & Design in New Orleans have partnered to form the Technology Cooperative Federation as a purchasing cooperative, allowing them to compete in purchasing power with larger private IT companies and corporations.

Yochai kindly agreed to an interview by email:

First, I first wanted to ask you about what sort of fears you faced before you launched your collective? Looking back to when I was younger, I think one of the reasons that I never got involved in starting a full-blown worker-owned collective myself was that I was afraid that trying to make a living from my own business would be really daunting, but in a recent interview you said that starting a business actually isn’t that hard, that regular people do it all the time, and I was wondering if you could expand on that comment a little? What concerns did you have before you started the first TechCollective and how was your actual experience different from your initial fears?

What fear? I was 23 years old, healthy and full of venom! I mean, I’d been through worse: I’d never finished high school or college, and had lived/worked at hostels around the country! Heck, just a few years before I’d moved to a city I’d never been to with $11 to my name, and I turned out OK! How could starting a business be harder?  The arrogance of the youth, I suppose.

And it really isn’t hard – you fill out some paperwork, hire a CPA for 2 hours and viola! You’ve got a business going. The hard part is having something to sell. And in that sense, I was lucky – the world of IT is very unique, I think. People often talk about how there is this veneer of meritocracy (as long as you’re male, of course) – and that’s very much true: if you can do it, you’re in. Of course, there’s the added benefit that if you don’t have a degree/diploma, nobody seems to care! I was once hired for a very serious corporate gig; they didn’t even ask me where I went to school! And there’s one last benefit: everyone needs what I’m selling. Have a business? How about an apartment? Do you own a computer? Maintain a website? Do you have data you care about?

My parents (lapsed communists with a dash of anarchism) raised us on Kibbutz values; e.g. anti-religious, pro-equality and above all anti-power. We didn’t have any money, but they always had a place for me if anything didn’t work out. Maybe that’s what it’s all about: I’ve always had somewhere to go to; even though I had no money.

It occurs to me now that part of it might be cultural: my father came to the US without any education, money, or grasp of the English language. Yet he took more risks than most of the Americans I’ve met – including leaving his family behind, starting a business (which he runs by himself to this day) and raising a family in a foreign land. He told me once, “When I die, put on my tombstone: this man was not afraid to fail.”

Maybe that’s why I did it.

I can’t really recall what earlier concerns were – I think the biggest was perhaps the fact that I had no clue what I was doing! I had no business experience, and frankly didn’t know a 1/10th of what I know now – about business, about computers, about being an adult. And I made a lot of mistakes, of course. But in many ways I was especially lucky to form a co-op – my co-owners would share the load, ease my burden. I was never alone. They also brought their own skills and experiences along, and worked often just as hard, if not harder than I. Lastly, I was fortunate to connect with the local co-op community (nobawc.org); we had an immediate customer base, as well as technical support for all things co-op.

People go into to debt for hundreds of thousands of dollars for school and they don’t blink an eye; it’s just ‘what you do’ here in the US. And that to me is even more ridiculous as most of the people I know who have degrees don’t even USE them at their current job! What I’m getting at is that there are always acceptable risks, and we as a society seem to assume some are OK and others are not. For what it’s worth, I’ll be debt-free long before many of my friends who went to college – and I’d wager that they feel less happy with their ROI to boot.

One more thing: I once called into a (disappointing) radio show about co-ops; some kind of forum thing. And on the call, I said something along the line of, “Don’t just listen to what we’re saying, and then go out there and keep living your normal life, working somewhere you don’t want to be, all the while dreaming of working at a co-op” – I’m paraphrasing, of course. Anyways, a year later I ran into someone at a conference, and they told me that they heard me on that show, and after hearing what I said decided to go out and do it, and now they did have a worker co-op of their own. This made me very happy, and while I know it isn’t easy for everyone – and for good reason – I still love stuff like that, it gives me a feeling of hope and inspires me.

On a related theme, you also said in a recent interview that it is actually easier to start a business as a cooperative group, rather than as a sole owner. What are some of the advantages to starting a business as a team of worker-owners?

As I mentioned before, creating a business as a worker co-op is a shared experience; you never feel completely alone – you have a group of (usually) like-minded, committed individuals right there with you. Their shared resources, skills and experience makes the process of starting a business unlike anything I’ve ever encountered.

There are more practical reasons as well – taking out a loan is a bit easier if you have a wider range of personal credit to lean on. There is also the concept of the buy-in: each worker upon becoming an owner must pay an amount, ranging from $50 and up every paycheck, until the agreed upon amount has been paid. A $3,000 buy-in ensures seriousness in the business, creates equity, and increases over time – so if a worker eventually leaves (as I did) they will receive a chunk of cash greater than they put in. The obvious question is: how does one pay this amount if they have no money? We do not require the full amount right away – in fact you are not required to pay anything until you receive your first raise. The worker can pay as little or as much as they like. This process is a great litmus test for finding good employees! Another strength of our model is our open-book approach to business: all employees know the financial situation, and are empowered to make decisions “as a boss” when they need to. Workers are working to benefit themselves as well as the business – it is built-in! Further, a traditional business would typically ignore any good ideas non-owners had; at a co-op all voices are given a chance to speak – and the business benefits. Voting itself is a useful tool: I’ve been wrong about many, many things – and when I was overruled and we went a different way, I could see that fact. But if I were the sole owner, I would have only found that out the hard way!

There is another tangible attraction for new personnel (an advantage in my eyes): the patronage model. If at the end of the year we are profitable, our bylaws stipulate that we may take 75% of our profits (the other 25% is working capital – an idea from Mondragon) and distribute them amongst our employee-owners; in many states this is untaxed income! There are a few other business-specific benefits I could mention (though they aren’t very interesting, I think). For example, many co-ops are formed by immigrants that use the LLC model: this allows them to hire non-citizens and pay them – legally. It also employs a similar method for patronage (returns) as a cooperative corporation/employee cooperative.

The second co-op I formed received a loan (line of credit, really) from the Cooperative Fund of New England. Obviously we would not have been able to receive this loan (or the many, many grants we’ve applied for) had we not been a democratic workplace! If that’s not an advantage to starting out over a traditional business, I don’t know what is! We are part of a larger movement that help one another; we share resources, trade work, and connect in the most equitable fashion imaginable. Our co-op could not exist without the larger movement.

People sometimes say things like, “What about the geniuses, the Steve Jobs of the world – don’t they need to be “in charge” and dictatorial to do their great works?” And to that, I say, “What about all the rest, the regular workers who are given no chance to have their ideas heard, to join in creation?” How much have we as a society lost out on as a result of how we do business?  A co-op is thus made stronger as a result of our model – both as a business and as a part of the community. We will never outsource ourselves, we will never poison our backyards, or allow one of our own to do so. We create workers that take democracy to the workplace – where we spend the majority of their time – and apply it elsewhere in their lives – it empowers us to grow and stand tall; I definitely see this is an advantage and benefit.

And finally, you’ve said that one of the biggest challenges in the beginning was locating suitable co-owners to staff your new businesses. What have you learned about the challenges of finding and vetting potential fellow co-owners and what advice would you give on the process?

Handling personnel is definitely the most important part of running any business, I think. But it is especially important at a co-op because you are not simply hiring for an employee; you’re looking for future co-owners. Someone who will share the frustrations, difficulties and benefits of being an owner – with you, of course! Our society teaches us to be slaves; to accept our exploitations – even to yearn for our chance at being the exploiters! This isn’t just rhetoric – it is compounded into every aspect of our lives, as well as our education. As a result, most candidates have either:

1. Never heard of a worker co-op.
2. Have a vague notion, but would never consider searching for one.
3. Love co-ops, but probably don’t have the relevant job requirements (this happens quite often).

Loving co-ops is not in any way a requirement – in fact, very few people we’ve hired have known what they were.

So our approach has been to find candidates who meet the personality requirements; we have a full matrix of skills we look for as well. If we are faced with one candidate that can do the job but has an incompatible personality, we will not hire them. If however we can hire someone who has the personality we’re looking for, but none of the skills – we’ll probably hire them and train them. You can not change a person’s personality but you can certainly give someone whatever knowledge they need! Problem solving, critical thinking, etc are all very important; but what we really care about is whether they work well with others, particularly in a democratic and equitable fashion. The co-op is also not for everybody; we don’t simply think “How well do they work for our purposes?” – we also ask them “How well do we work for you?”

Long-term, my advice is to build employee reviews (ours are quarterly) into the job – if you keep everything out in the open, people are more likely to change and grow; this includes the co-op itself. At what is a co-op really, but a growing group of people, working together towards a common goal? Is there anything more beautiful?

Sources

Christian, Jon (2014) “New co-op brings bossless business model to tech support in Somerville”, The Boston Globe, May 08, 2014.

Halash, Jeff (2014) “Yochai Gal from BostonTechCollective.com”, Podnutz Daily 400, November 03, 2014.

Jones, Erica (2014) “Hello Neighbor: a look at Boston TechCollective”, SCATV Somerville, July 30, 2014.

Wolff, Richard (2015) “The Worker Co-Op Alternative”, Economic Update, April 12, 2015