Hi from Steve Gill at VME (soon to be VME Co-op)


#1

Hi everyone and thank you to everyone I met at WB Yeats on Friday and Co-op Congress on Saturday. I knew as soon as @harry said “Meet at the pub” this was a group of people I was going to get on with :beers: :yum:

I’ll try and be brief with the introduction, but this won’t be easy :joy:

I studied Computer Science for one year in Edinburgh before getting bored, and pissed off with the cheating, plus I ran out of cash :blush: My first ‘real’ job was working at Scotmid Co-op in their IT department. I soon learnt that most private companies supplying Scotmid with IT were ripping us off; before the sale they were our best friend, once the sale was done and they had their money they disappeared - no interest in a long term relationship or fixing problems (of which there were many!).

Scotmid installed VME software in their stores in 1999 (tills, back office and head office - very like corepos) because the owner of VME was different - he believed in long term relationships and working with the customer to delivery what we needed - a breath of fresh air.

I jumped ship from Scotmid to VME in 1999 to further my career (with the blessing of the Scotmid CEO, who I’m still friends with to this day) and 5 years later, led a management buy out of VME from the family that owned it. We now have offices in the UK, Malta and Ireland - 28 employees, and growing. Almost 20 of us are developers, either in .Net, PHP or Javascript (VueJS).

We have our software running in 9 of the 13 independent co-ops supplied by FRTS, with over 600 stores and 2,000 lanes. We are in discussions with the rest to join us so all UK co-ops are running the same platform, allowing us (us = co-op people, not neccesarily vme) to develop new tools and apps to grow the grocery co-op marketshare. We have calculated the movement will save millions per year by doing this.

Beyond this, we have a plan to take the software to Europe and then the rest of the world, but by working with local ‘service’ co-ops and, importantly (mentioned on another thread) by open sourcing what we’re doing. I’ll talk more on that in a new post, because I’ve only just heard about Core POS and it sounds like we could (this one is already too long lol). But our plans are to grow to 1,000 people, and we’ve been working a lot recently on scaling up what we’re doing - we’ve a great team who are all passionate about what we’re doing.

I’ve never been interested in Venture Capital, because I hate the idea of being forced to ‘hard sell’ a customer just to meet certain artificial profit targets, so the VC can sell out - the only person that wins is the VC; the employees, the customers are typically screwed over. A few years ago I was about to commit to our software working on a MySQL alternative which was really good (forgotten the name - but it was before Amazon RDS days) and then the VC pulled the funding, and they only gave their customers 2 weeks notice to move. Incredible!

I’ve always wanted the co-ops to do really well, because I hated the fact that they were screwed over on tech (and the ones VME aren’t yet working with still are, IMHO). I always had a soft spot for this, wanting to help the underdog (our smaller co-operatives who don’t have the funds of the larger ones) and it probably was a lot to do with my good experiences in my Scotmid days.

Last year I went to the Co-ops Europe conference in Malta. Now I’ll be honest, I didn’t realise that converting a private company into a co-operative was a ‘thing’. I always assumed that co-ops were mostly retail societies, and (at that time) most definitely wasn’t aware of tech co-ops. Ed Mayo gave a great talk about the collaborative economy, and also mentioned transfertocoops. My little brain started thinking - what if we could all co-operate together, and use VME’s tech to allow grocery co-ops, small or large, anywhere in the world to properly compete with the Tescos and Carrefours? That would be amazing!

I met Ben Reid, CEO of Midcounties Co-op and we had a great chat. Various meetings happened over the next few months (most of the major retail societies CEOs met me), and all through this time I was working on the basis of creating a consumer co-op, owned by the customers of VME (boo! I hear crys from the back. Give me a min to explain!!). Then I stumbled across Fairshares, and my mind was blown. Here was a model which fairly rewarded all stakeholders in an enterprise; employees, customers, founders (to recognise they are the ones bringing new ideas to market) and investors who provide the capital that we all so desperately need to grow and compete with Silicon Valley companies.

It was a no brainer for me, but it took a bit of convincing some of the others involved who were used to more ‘old school’ thinking. If we want to see co-ops take over as the number 1 structure from VC funded companies (mostly in Silicon Valley) we need to think radically, without compromising co-operative values.

Working in Malta (my wife is Maltese) I got to know the Maltese co-operative movement (who are awesome btw), and it became apparent that not only was the movement weak compared to the UK, it was also non-existent from a tech point of view. Malta is a small island but has a lot of IT developers, mostly working for the gambling companies who are here to save tax. I personally don’t like the gambling companies, because they are profiting from other people’s losses and not really adding ‘value’ to anything (IMHO) but I like the fact there are a lot of developers who would be interested in working for a co-op, making a difference.

One of my ‘dreams’ is to help the SDG2030 goals by focussing on Africa. I’d like to see us help create more african communities come together and create grocery co-ops; we provide the software that is used by all the other co-ops so they can take advantage of what it can do, and take advantage of the combined buying power of all the co-ops. I think doing this will stop the Tescos and Carrefours from just taking advantage, once places like Libya are sorted out. Being 100 miles from the Libyan coast, we are perfectly placed to do this.

This all made me determined to create VME Co-op as a maltese co-op, selling to the world. However I then discovered Maltese co-op law is very old, and was designed for fishermen co-ops. So quite a lot of changes were required to incorporate a fairshares co-op. I’m a bit stubborn, so after getting nowhere with the government dept concerned, I emailed the Maltese Prime Minister. We exchanged a few emails, and I was invited to meet him to explain what I needed! So a few weeks later we were sat in his office, for 20 minutes and he was very interested and supportive. He loves my idea of building a platform co-op silicon valley alternative in Malta, especially as Malta is embracing blockchain technology with new legislation. So much so that we email every few weeks to keep him abreast of my progress.

The biggest stumbling block was how to raise the money to pay off the shareholders of VME (I’m not the only shareholder, albeit the majority one (just) - and the others aren’t as co-operatively minded as I am, so would be happy to sell to a trade competitor). We paid 3.1 million for VME back in 2004 and have grown the business since then, and (big head time) it has a world class bit of software that competes with anything running in Tesco or any other supermarket, so giving it away wasn’t fair. What is important though is that all the future value generated goes to the members.

Besides, now that I knew conversion to a co-op was a thing, to encourage other private companies to do the same we needed a way to raise capital to buy out the shareholders, easily without all the delays I’ve been through - otherwise this is just a dream that will never come to reality.

I’m a problem solver using tech kind of guy, so after a meeting with Rory Ridley Duff in Sheffield (the main man behind Fairshares) I set to to work developing a platform, based on EventStore and blockchain, that would allow anyone to buy and sell shares in (mostly) multi stakeholder platform co-ops easily, using FIAT currencies or even cryptocurrencies, depending on the co-ops exposure to risk. This platform is called “Co-op Exchange” and it is being launched as a platform co-op itself, with VME Co-op being the first customer after that. I have 6 new co-ops lined up to ‘list’ after that, so its really building momentum. I genuinely feel this could be the beginning of the end of the days that co-ops struggle to compete with VC funded tech businesses due to being unable to raise capital.

Anyway I’ll post more about that on another thread soon, along with all the logic of how it works - I’m hoping to have the website ready for Open Co-op 2018 - until now we’ve been working on the platform code (.net order book engine with vue js front end, and mobile app in progress as well).

So TL;DR - I’m in the process of converting VME into a co-op (target date November 2018), and launching a brand new platform co-op called “Co-op Exchange” in October 2018 which is designed to raise capital for co-ops.


#2

Amazing story. Great to hear about co-op stuff in Malta.

All the best with your projects and would be great to see these co-ops apply to CoTech when they are ready :grin:


#3

It was great to meet you! Really exciting to have this level of ambition in the network, and seems like there are lots of opportunities for collaboration.

You should definitely talk to @Katebeecroft and Fran from Greater Than Finance about the funding platform. I’m seeing them this week - is there a document or similar I can show them?


#4

Hi @SteveGill, welcome!

Have you given much thought regarding what license you might use when open sourcing your code base?

These days the most popular ones are the MIT/BSD/X11/Apache style licenses as these allow the corporations, who release a lot of code using these types of licenses, to, in effect, privatise the code by distributing complied code without the source code — these open source licenses grant you the freedom to make the code closed source.

If you don’t want your code to be allowed to be made closed source then you would need to use a Copyleft license which enforces sharing, for example the GPL or AGPL.


#5

Hi @SteveGill.

Great story. Come across Mario Gerada (Omnicare Cooperative) in Malta by any chance? Like you, man on a mission.


#6

Not met Mario Gerada, no, but sounds interesting! Is this him? https://www.facebook.com/Mario.Gerada1


#7

Hi @SteveGill, welcome!

Have you given much thought regarding what license you might use when open sourcing your code base?

These days the most popular ones are the MIT/BSD/X11/Apache style licenses as these allow the corporations, who release a lot of code using these types of licenses, to, in effect, privatise the code by distributing complied code without the source code — these open source licenses grant you the freedom to make the code closed source.

If you don’t want your code to be allowed to be made closed source then you would need to use a Copyleft license which enforces sharing, for example the GPL or AGPL.

Hi Chris, I haven’t looked into the right license yet, no - but I agree its a very good point. My ideal would be something that could be used freely by co-ops but not allow our (non co-op) private competitors to just steal all our work and embed it into their products. Difficult to do but at least if our license was right would help.

Ideally it would be a system only accessible to co-ops, because we’re building competitive advantages into this that we don’t want the big retailers (non customers) to be able to access. However I cannot see a way to do this, unless its only registered co-ops given access to github?


#8

Still working on it @harry but should have everything ready for Open Co-op.


#9

Nope :slight_smile: (Tho ‘this’ Mario also lives in Malta…)

http://www.omnicarecoop.org/Pages/about_message.html for ‘my’ Mario


#10

There is the Peer Production License, but the only project I’m aware of that is using it is looking at using another license.

My suggestion would be the AGPL:

The GNU Affero General Public License is a modified version of the ordinary GNU GPL version 3. It has one added requirement: if you run a modified program on a server and let other users communicate with it there, your server must also allow them to download the source code corresponding to the modified version running there.

It wouldn’t stop non-coop private competitors from using the code but it would force them to share any changes they made to it, so if they added some additional code for some new feature you would then have access to this to incorporate it into the core codebase — sharing would be enforced, I think this is probably as good as it gets in terms of co-operative software licenses.


#11

Nope :slight_smile: (Tho ‘this’ Mario also lives in Malta…)

http://www.omnicarecoop.org/Pages/about_message.html 1 for ‘my’ Mario

I think its the same - his facebook page says “CEO & Founder at Omnicare Cooperative Ltd”.

I’ve got a mutual friend so I’ll try and make contact. Thanks for the heads up!


#12

This is an excellent idea. I have a meeting with the lawyer tomorrow about the conversion so I’ll raise it with him at the same time - thanks!


#13

Hi Steve, and welcome. Your plans are exciting. I’m particularly interested in the Co-op Exchange project and learning more about how that will work, to enable new mechanisms for investment in cooperatives.

On the licensing front I don’t see why you shouldn’t use or build on the peer production license - it sounds like a great fit for your software.


#14

I’m particularly interested in the Co-op Exchange project and learning more about how that will work, to enable new mechanisms for investment in cooperatives.

I thought I’d replied to this, sorry Graham! There will be more details posted very soon, hoping to get things ready for Open Co-op. I’m super excited about this though :smiley:


#15

The Malta prime minister is an amazing story, and I certainly like the idea of Maltese platform cooperative Silicon Valley, I would move there tomorrow if I could :smiley: !

I made a “debate” with @Graham on Kialo about the future of platform cooperatives, whether the focus will be more on platform coops with globally spread or locally clustered membership. However, it might very well be that platform coops that have a globally spread membership will be registered in concentrated geographically in one or few countries.

One problem with sustainable growth for global platform cooperatives, like Social Coop (a microblogging platform coop similar to Twitter) is that although in practice it’s a cooperative, and very democratic one, the democratic decisions are not legally binding. It’s very hard to impossible to have a legal cooperative with global membership and asynchronous decision making.

On the other hand, you only need one country to make it very easy to set up cooperatives that anyone from anywhere can join easily, and platform cooperatives take a big step forward. With traditional cooperatives, every country have to make its own laws about cooperatives.

I was first betting that country could’ve been Estonia, but now I’m starting to think maybe you and the people involved there can make it happen in Malta instead, no pressure though :smiley: !

There was some talk in Social Coop about registering as a Maltese cooperative. Social coop didn’t generally see it relevant yet to turn into a legal cooperative, but there seemed to be pretty widespread agreement that in the long term we need to have more binding legal structure, and operating as a Maltese cooperative seems like one of the best ways to do it. The fellow who proposed this in Social Coop is from Malta himself, I don’t know him personally but since there probably aren’t many people on the planet who has put so much thought into platform cooperatives and Maltese cooperative law as you and him, he might be someone you want to contact. Here is his account on social coop and here is his Loomio account. I also linked this discussion to him.

Let me know if I can be of any help, although I’m afraid my only useful skill is translating stuff from English to Finnish :smiley: . I am also involved in WeCollective, and we would certainly love to take part in the Co-op Exchange based on what you have written about it.

Exciting stuff! See you again on Open Coop!


#16

Is it really? I think pretty much any UK legal structure could be used for such an enterprise, no? Some advisors are risk averse and advise against having non-UK members, but legally there is nothing stopping anyone doing it, and lots have already done it.