No Stupid Questions

The short answer is that starting or incorporating is the easy part, and the hard part is guiding the seedling of an idea through a array of hazards, any of which can quickly sink the plan.

For clarity, I will use the term "organization" to broadly refer to a group of people and resources dedicated toward a goal, which includes what you described as profit-sharing companies and co-ops, as well as the predominant business structures like for-profit corporations (ie INC, LLC) or non-profits charities, plus groups that use those structures in non-conventional ways, like 501(c)(4) "social welfare organizations" that incorporate for flexibility but constrain their operations to what is within their remit (eg DSA, NRA). Although it might seem that I'm focusing on tax-exemption by referencing the American IRS tax code, this is more a short-hand to refer to organizations voluntarily constraining themselves by their own terms, in contrast to even narrower types of entities which are constrained by law. The latter might include a Limited Liability Partnership, which in California is only granted for a union of lawyers, architects, or accountants.

As for why I've expended a whole paragraph to describe the different ways that organizations can form themselves, it's because the formation often has little to do with the intent of the organization, the current or future size of the endeavor, or whether they're likely to make it off the ground. Any and every organization enters this world as a small, tender operation, and neatly falls into what the US Small Business Administration (SBA)'s Office of Advocacy would describe to as a "small business". This includes any prospective co-op or even a one-person venture, and unfortunately the odds are heavily stacked against small businesses.

Since co-ops and profit-sharing companies would play in the same capitalist environment, I think it's fair to equate these organizations with "small businesses" at large, for the purpose of this analysis. From that SBA document, only two-thirds (67.6%) of new businesses last longer than 2 years, and less than half (48.9%) make it past 5 years. And of the businesses led by minorities -- specifically women, veterans, Black, Hispanic, and Asian descendants -- their percentages were even lower.

When you think about it, a successful organization requires 1) genuinely visionary leaders, as well as 2) the staff to carry out the objective, plus 3) resources to enable the organization, plus 4) a measure of luck. Much like in a game of Settlers of Catan, it is rare to hold all the requisites at once, let alone at the very start of the game. Whereas conventional stories of capitalist success generally focus on a genius or lucky young upstart that upends the business world through shrewd business acumen -- thus providing their organization with the first requisite -- I think the co-op and profit-sharing models start with having the second requisite, usually forming the initial group of dedicated employees.

And I don't disagree that there are lots of community-minded individuals that are able and willing to come together towards a common cause. But the crux of an organization is that it, er, organizes people and resources in an efficient manner for that common pursuit. I am of the opinion that true leaders with the necessary impassioned drive and ability to inspire and rouse their organization's staff are far and few between. And that's even before considering their core competencies in addressing organizational crises, their handling of public relations, and their personal and business roles in the socioeconomic environment.

We need only look at the conventional business world to see where corporate leaders absolutely drop the ball and pull the organization downward, be it Boeing's various CEOs following the MD merger, to convicted fraudster Martin Shkreli of Turing Pharmaceuticals, and more. But while there are a lot of really awful leaders taking their organizations down with them, there must also be run-of-the-mill leaders who do actual leadership, whether for manufacturing, charities, food banks, actual banks or credit unions, and more. The problem then for requisite #1 is a matter of incentive: for those leading successful capitalist organizations with nation-wide scope, what would attract them to help lead a smaller organization to provide daycare and pre-K at the local level? If there is a genuine shortage of qualified leaders, then capitalist incentives would mean they seek out bigger operations to use their skills, not smaller ones.

That, of course, just means that communities need to be producing more people that are qualified to be leaders (requisite #1), in addition to forming the communities that will become the staff of those organizations (requisite #2). I will not dwell on the third and fourth requisites, as it's fairly obvious that even with good leaders and good people, if the means of production aren't present, there's not much to be done.

As a closing food-for-thought, much of what I've discussed above is very American-centric, as our notions of organization are both democratic yet republican in nature. That is, we want to enable the masses to participate (requisite #2), but we also expect leadership to be singular individuals (requisite #1). This does work, and certainly dates back the eras of kingdoms and empires -- have you thought of the Roman Empire today? -- but it may be worth exploring leadership that is also democratized.

Switzerland comes to mind, as their Federal Council -- the closest equivalent to the US President or a company chief executive -- is actually seven people, whom all serve as the collective head of state and head of government for the country. Note that this is not equivalent to a company Board of Directors, which is more analogous to the Federal Assembly of Switzerland, which is the parliament with legislative powers to set policy. Furthermore, this is not to be confused with direct democracy, which the Swiss also do, by way of referendums.

It's possible that rather than needing to develop more skilled leaders, an alternative is to assemble a small, core group of individuals who together have enough skills to competently lead a co-operative organization. This would certainly be more tractable, although I haven't given enough consideration as to how this would work, and whether there are any existing models to look at. It might or might not mirror the qualities needed from existing, successful co-ops and profit-sharing companies, with REI and WinCo Foods coming to mind.