Proposal: Transitioning Frappe into a Worker Cooperative – Aligning Ownership with Values

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Hi everyone,

I’ve been using Frappe Apps with Frappe Cloud for quite some time now, and beyond being a fan of the products, I am deeply impressed by the values the team and the @rmehta CEO represent. As someone who works in a German cooperative (co-op) and recently visited India, I was thrilled to see how vibrant the cooperative movement is there.

I truly believe that Frappe would be a perfect candidate to become a worker cooperative.

For those new to the concept, this video from the World Economic Forum / TED-Ed explains the basics beautifully: These companie types are thriving.

Why this model fits Frappe:

Democratic Control: Every member has a vote [03:50]. This mirrors the transparent and open-source nature of Frappe’s software development.

Member-Centric: Co-ops aren’t just about maximizing profit; they exist to serve their members and community [02:16].

Resilience: Studies show co-op startups are significantly more likely to survive their first five years compared to traditional businesses [04:56]. Furthermore, they are overall more resilient when it comes to economic crises, as they prioritize job security and long-term stability over short-term dividends.

As the UN declared last year: “Coops build a better world.”

This Google Talk is also talking about this topic more deeply: Democracy at Work: Curing Capitalism | Prof. Richard Wolff | Talks at Google

In India, there are inspiring success stories like:

Transitioning to worker coop is a major decision, but it can be planned for the long term through worker buyouts. This requires careful preparation, but there are excellent consulting groups and successful examples globally. Vaikunth Mehta National Institute of Cooperative Management, Pune https://vamnicom.gov.in/ maybe a starting point. Worker Coops need Excellence in Leadership and Teamwork to function! If done right, the decision-making process becomes faster and less dysfunctional, while building a strong consensus where the team can live with and support decisions (driven by high facilitation competence).

The “Cooperative Advantage”: According to the 6th Cooperative Principle (“Cooperation among Cooperatives”), co-ops naturally prefer to work with each other. Transitioning could open doors to a massive network of potential new frappe co-op customers worldwide. A successful transition will boost gross productivity per employee by 9% through the new shared ownership incentives.

I highly recommend exploring this path. It would not only safeguard Frappe’s soul but also set a global example for the future of ethical tech companies.

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Maybe if we were to do it again, it would have been a co-operative, non-profit. As things stand today it is hard to change the structure with ESOPs and external investors.

We do plan have some structure in place to protect the democratic nature of the company - checkout The Constitution of Frappe

The core concept is that instead of treating employees as service providers and company as “property”, the democratic company imagines shareholders as “suppliers of capital” with limited rights and the employees (people who work) as the primary source of legitimacy. We are inventing it as we go along, the rules seem to work okay so far. Let’s see!

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