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ColivingDAO Insights: The Web3 Path for Regen Living
Hosted by ColivingDAO founders Daniel Aprea and Gareth Thompson, this podcast explores how Web3 technologies can enable sustainable, community-driven, and regenerative living.
Each episode of "ColivingDAO Insights" offers valuable perspectives, knowledge, and analysis on the practical applications of Web3 technologies in fostering regenerative living, such as decentralised ownership and governance models, proptech innovations, community living, and ways to regenerate both the planet and the economy.
ColivingDAO Insights: The Web3 Path for Regen Living
Coliving on Steroids: The Case for FairShares with Prof. Rory Ridley-Duff
A conversation with Prof. Rory Ridley-Duff, Emeritus Professor of Co-operative Social Entrepreneurship at Sheffield Hallam University, Founder of the FairShares Association and Advisor to ColivingDAO.
Hi, everyone, welcome to Colimidao Insights. This is your co-host, Daniel, and I'm joined today by my co-host Gareth and our special guest, Rory. Rory Ridley Doff is an emeritus professor at the cooperative social entrepreneurship at Sheffield Hallam University. And is also a prolific author and founder of the Fear Shares Association. Welcome, Rory. Welcome. Nice to be with you. Awesome. Great to have you here. It's a great honor. And uh welcome, Gareth, as well. Hey Dan, good to be here. Great to be here. So it's uh really a pleasure to have Rory here. Uh we really want to pick your brain and uh discuss and learn a lot from you as well and share some of your beautiful insights with the audience too. So, Gareth, what would you like to discuss today?
SPEAKER_02:Yeah, brilliant. I'd love to get um started by looking a bit about into your history, Rory, and and and some of the origin stories of how you got involved and what you're doing in social enterprises and cooperatives. Yep. And um yeah, so that there's a rich history there, and you you have you've over 30 years of experience in this field, which is amazing. So the first question is how did you first get inspired by cooperatives and social enterprises?
SPEAKER_01:Yeah, I can I can take those two questions separately. So um I first got interested in in cooperatives after I got I got slightly radicalized by the minor strike. My my wife is from Barnsley. Um so I started reading um reading stuff that talked about a cooperative commonwealth, um, and then got hold of books that about cooperatives, and that changed my decision as to where to work. So I I applied to work in a London-based worker co-op. Um, and at the second attempt, I was successfully taken on as a member, and I stayed there for over a decade. Um, so it was a good decision. It it led to an interesting lifestyle, and I was there to see whether it worked really. I was just curious as to whether cooperative working could work. And you know, the culture shift from day one was enormous from working in a multinational corporation before I went there. You know, on day two of arrival in a co-op, we were taking votes on our own wage levels and stuff like that. So um, compared to the months of angst trying to get anybody a pay rise in a corporation, that that was quite a revelation. Um, so that was my I I got bedded down in in co-ops. Uh and towards the end of my time in that co-op, we started a conversation with other worker co-ops in London about creating a capital-wide agency for the development of the social economy. And that was the first time the language of social enterprise became um foremost in my thinking. So prior to going into the university sector and becoming a researcher on cooperative and social enterprises, I was involved in the formation of Social Enterprise London. And then Social Enterprise London created the Social Enterprise Coalition, which was a national body. So I was one of the founder signatories to that. And I have to say, the language was one of the things that was discussed in those founding meetings, whether we branded what we were trying to do as social enterprise, and it was informed by conversations that were also taking place in Europe at the time. Um, so it all went from there, and I've always been very anxious that co-operatives are remain within the umbrella of social enterprise, but I recognize that social enterprise is a broader church than the cooperative movement. And it's not it's not something to be taken for granted. People often, you know, in the social enterprise world, they they can marginalize or seek to marginalize co-ops. So a lot of my writing, and indeed a lot of my work on fair shares, is about maintaining the presence and indeed evolving the cooperative model within um the ecosystem for social enterprise. Yeah.
SPEAKER_02:Brilliant. Thanks for that. And I the thing that really struck me there is you kind of touched on the difference in feeling that you had when you were working on a big multinational to moving to the workers' cooperative.
SPEAKER_01:Very much so.
SPEAKER_02:And that feeling sounds like it inspired you. You know, you were involved in in decisions that affected you.
SPEAKER_01:Absolutely. I mean, we we we debated and discussed stuff that I would never debate and discuss in in another type of workplace. Things like um, do we as an organization cross a picket line? You know, that was a live debate when we were called across a picket line and we decided not to cross the picket line because we were members of the trade union that the people on strike were belonging to. Even though we had a contract with the organization to service their computers, we decided not to cross the picket line. And the support for that was in the contracts that we we had with our clients. The contracts we had with our clients said we won't cross the picket line unless we understand the reason um for crossing it. So um, and you know, it was it wasn't perfect. I mean, I it could it could be quite heated, you know, as you can imagine. In any, I mean it it kind of uh sobers you up that democracy is not a nice cosy arrangement, it's an arrangement where people exercise their voice and therefore it can it it has lost quite a lot of discomfort in it, but it's very satisfying at the same time if you can cope with that, and and not everybody can cope with it, I have to say. So it it was a fascinating 10 years of my life, and of course, it it led to 20 years um of uh academic work and uh practice, you know, new new types of practice after I left um the workplace for academia, even in academia, I was still engaged in lots and lots of practical activities related to the field.
SPEAKER_02:Brilliant, thanks very much. And we we might pick up on that dynamic aspect that you mentioned, you know, it's not a utopia. No, it's not um and that that would be really interesting when we talk about multi-stakeholder um structures later on. So if if we can just fast forward a bit to um the next question, which is you're you're one of you are the creator of the fair shares company and corporation. I'm one of them. Yeah, yeah, yeah. One of them. And and so, first of all, just for the listeners, can you explain what a fair shares company is?
SPEAKER_01:Um a fair shares company, and there are fair shares cooperatives as well, but I'll stick with a fair shares company. So it is a it's a multi-stakeholder structure that is incorporated under company law. Um, and the multi-the principles behind the multi-stakeholder structure, um, they advance the cooperative model, but they advance the cooperative model beyond um what is, I suppose, uh officially sanctioned by the international cooperative movement. Um I say beyond because in the in the last few years the international cooperative movement has become much more accepting of multi-stakeholder principles, much more accepting of multi-stakeholder principles. Um but the the line that we took was uh in advance of the international cooperative movement sanctioning a multi-stakeholder structure where no single stakeholder could have a dominant voice. So a key principle in a multi-stakeholder uh incorporation under fair shares is you have multiple stakeholders, but no stakeholder has a dominant vote, has dominant voting power. That's not to say that there aren't some instances in a fair shares company where a particular group might have some veto power to stop the other ones taking over, to stop the other ones making decisions that impinge on their specific interests. Uh, but it means that the general policy of the organization has to take be taken forward collaboratively by different stakeholder groups working in cooperation.
SPEAKER_02:Excellent. And again, that collaboration and multi-stakeholder aspect is something that we can definitely dive into. So, roughly how long ago was the fair shares created? Again, just to give a bit of context.
SPEAKER_01:Um the there was a sort of 10-year buildup, I would say, to the official launch of the Fair Shares Association, where lots of research going on about multi-stakeholder structures that were already in existence. That sort of started in the early 2000s uh and and reached up to 2013. In 2013, that's when we actually created an association and we incorporated that association in 2015.
SPEAKER_02:Brilliant. So this is this is drawing on you know uh uh more than a century, almost two centuries of cooperative thinking and then adding a multi-stakeholder element to the model, which was effectively is very recent and innovative and from 2015.
SPEAKER_01:Um I would say that there were there were lots of people in the cooperative movement who were already creating multi-stakeholder structures back as far as the the 1990s. Some people will say it goes back further than that, but the principles that we embed in the fair shares model comes from a whole series of debates that started in the late 1990s and continued through the 2000s until we reached a mature iteration of that or a relatively mature iteration of that by sort of 2012-2013. That's when we were teaching lots of stuff that other people were already doing. Yeah. And we used to teach these in the summer schools that we ran at Sheffield Hallam. So we every year we would have 15, 20 people who would come to a summer school. We would dedicate an entire session to the incorporation of a multi-stakeholder social enterprise, which you know it inevitably brought in models from the cooperative movement as well as from outside the cooperative movement. Um, and the students, um, the solutions that they came up with were very much part of the first discussion document that we put out about fair shares.
SPEAKER_02:Fantastic. Thank thanks so much for that. And so that was the origin of the fair shares, but just to again give a bit more context on for the listeners. Um so people coming in from the standard business world are listening to this and they're thinking, okay, this all sounds really interesting. And I know I've heard some things about multi-stakeholder needs to be the future for different reasons that we'll go into later. So you know, why do you think multi-stakeholder companies and social enterprises are important for the future? Feel free to rephrase that question as well. But what's why is it important?
SPEAKER_01:Um well, the thinking that we we sort of collectively developed is that there are there are a minimum of four groups that a successful enterprise depends on. The the people who found the enterprise who provide the entrepreneurial ideas and and spirit, um, the producers who realize their vision and actually create the goods and services, a customer base, you cannot establish any business without a customer base. Uh, we've got a long history of consumer-owned organizations, you know, anything from the AA to the cooperative group. Um, and then lastly, an investment community. Now, whether that's the traditional stock market or some other investment community is an open question for us. But you need those four groups to buy in to an idea. And sometimes the buy-in happens over the course of several years. So people start an enterprise, they don't think too much about the other groups until the enterprise is developing. But we wanted to create a corporate structure where those four groups were recognized from the outset and where the founding team had the aspiration to devise an inclusive uh structure that would bring all of those groups together into a common governance system. And of course, as it's evolved, uh and your own your own incorporation um um in evolve is uh sorry, not evolve, um uh the the incubator that you've set up, you know, you might expand the number of groups as you recognize specific interests, but we always talked in for in terms of founders, labor, users, and investors. Yeah.
SPEAKER_00:Clori, I really like the simplicity with which you've uh designed and explained uh to us today this approach as well, uh, with a very special focus on the people. And uh there's this phrase that I hear very often nowadays, it's people planet profit, people planet profit. And it might have different meanings for different people. Um my question would be what does it mean exactly to you? And uh, does that have to involve any trade-offs, or is it something that can be maximized for each individual output as well?
SPEAKER_01:Um people I think there can be trade-offs, but they don't necessarily have to be trade-offs. I think in the early years of fair shares, although the people who were creating these multi-stakeholder structures often had quite a strong connection to the environmental movement, most of the debate sat around you know the people question and and the distribution of profits from a successful business and how that how that should be fairer. When we get to FairShares version 3, which is where Gareth got involved, the sustainable development world was um quite expansive by that time. And that's when we started embedding within the FairShares model commitment to the sustainable development goals and the concepts of stewardship, uh intergenerational stewardship became much, much stronger as well. So I think FairShares has had its own um its own history of getting on board the environmental, you know, the the planet side of the of the equation. But when we did so, we did it with great seriousness and intent. Um the trade-offs are the trade-offs are hard because um, I mean, we we see it in the in the debates that surface now. You know, no sooner do you um create solutions to deal with fossil fuel mining, you suddenly have environmental byproducts of developing electric cars. So, you know, the the larger the market gets, the more environmental destruction, you know, the production of electric cars has. You solve one problem, you create another problem. There are always going to be these kinds of trade-offs, I think, whenever you're talking about the stewardship of the environment. Because there's there's a every enterprise is exchanging with the environment all the time. So that the man the need to manage in the environment is ever present in in any activity. Um, does that have to be a trade-off? I I I think it's a really hard question to answer for me. I mean, I would say in the past, um in the past I thought there was less of a trade-off. Uh, but the more the more you understand that every every activity has um a corresponding downside for the environment. I mean, every activity that we do uses resources. So the the question of the destruction that comes from using those resources in a particular way, you don't know necessarily at the outset what the long-term impact on the environment is going to be from a particular activity. But that said, um, in the course of my journey, I've come across some wonderful win-wins. You know, sustainable agriculture, the the way that uh some of the people on fair shares projects have approached the question of agriculture. It's about doing agriculture in a way that regenerates the environment, you know, from you know the potassium that goes into the soil, from the the fertilizers actively are good for the ground rather than destroying it. So they talk about the stuff that's taken in and out of the soil. You can change the way that you use resources in order to restore and indeed regenerate the environment. I'm not sure that's going to be quite so easier in the world of manufacturing, you know, high-tech goods. Um, but you've got things like Fairphone, where people are making active choices to design the phones in such a way that they um last a lot longer, have less environmental impact when they're put together. Um so there are still choices to minimize harm, even if you can't maximize regeneration. Um, so that all those, I think those are choices that have to be made in the context of each enterprise. I'm sorry I can't be more positive about the lack of trade-offs, but you know, experience teaches you that you constantly have to think about the trade-offs between one course of action and another. Um, and of course, I do strongly believe that a multi-stakeholder governance model will enable you to understand any trade-offs that you're faced with much more completely, much more fully, and therefore the quality of the decision making is better in a multi-stakeholder community than it would be in one that's just thinking about maximizing profit.
SPEAKER_00:Yeah, I like the realism of this approach. And uh in fact, we're looking for practical solutions to practical problems. So this is uh exactly the type of approach that uh we endorse as well. And um, I like the reframe from trade-off to choices because after all, it's it's choices that we're making. And um, it is possible to get win-wins, and in fact, we like to move away from a dualistic black and white type of view and go towards a non-zero sum idea of how problems can be solved. So I'm I'm grateful for the examples of uh win-win that you shared with us as well. And um, along the same line, and uh speaking specifically about the fair shares in uh in in this case, being a fair shares commons company, Colevin Dow, my question would be how does that enhance ColivindAo itself versus let's say a standard private limited company type of incorporation?
SPEAKER_01:Yes, I think some of the advantages, and it's um something we might come back to in some of the latest questions, are the particularly when we get into version 3.2 of fair shares, which I think is what Gareth has been uh promoting himself, and which I imagine. The DAO will be based on. There's the intergenerational thinking, the requirement to think about generations down the line. None of that is embedded in a traditional private company incorporation. If you take your model rules off the shelf, it doesn't include introduce any requirement to do intergenerational thinking. It doesn't include any requirement to build an inclusive governance structure which reflects the stakeholder communities that you're working with. So those are immediate advantages. The other thing I would draw attention to is in FairShares version 3.2, we have this concept of six forms of wealth, not just financial wealth. But we start with the environment, top of the list. Then we move on to people as individuals, you know, their human health, their well-being, their skills, then the social, so the connections between people. Then obviously, out of the connections between people, you create knowledge. So we talk about intellectual wealth. Then you create goods and services using your intellectual wealth. So many what you manufacture or create, that's a form of wealth. And then, of course, you take some of that to market and you create financial wealth as a result of taking it to market and then recycle the wealth back into the other forms of wealth. So the whole mindset, and it's it's written right into the rules, it permeates the rules, um, is the creation of multiple forms of wealth. And that is reflected then, of course, in the commitment to United Nations sustainable development goals. So the stewards in a fair shares uh commons incorporation, there's a class of people who are charged with intergenerational thinking, charged with creating an inclusive governance model. And that is that all sits outside a traditional private company incorporation. Um that said, private company incorporations, particularly in the UK, um, you can make them what you can make them what you want as long as you're sort of within the law. So you can write these rules in and you can entrench them. Um the entrenchment provisions in company law in the UK are a lot stronger than in some other countries. So having written in the rules around inclusion, um sustainable development thinking, intergenerational thinking, um, they they can't they can't be removed without trying to shut down the company. And you can make shutting down the company very, very difficult as well. Um, you know, you you you don't treat it as a commodity to be bought and sold. Uh you treat it as a as a living, almost like a living organism, a living community of people, um, and you can't just shut them down, unless they, of course, vote for by themselves to shut themselves down, which uh perfectly legitimate.
SPEAKER_02:Does that that's great, that's great detail, Rory, and and one of the things that we've we're really keen on at Co-Living Dow is to embed these protections and into the into the company incorporation, which is why we chose the fair shares structure to incorporate the company on. And and you touched there on multiple forms of wealth, which is uh quite a quite an innovative concept to think about because people are so focused on financial wealth as being the the one that matters, right? And then that feeds into some of the dynamism you were talking about before and the multi-stakeholder aspect of the dynamic kind of debates from all the different stakeholders, and those dynamic debates amongst those stakeholders are effectively protecting those different forms of wealth because everyone has a voice and everyone has an interest in those other forms of wealth that's slightly different. It's not just about the money, in other words, right? It's not just about the money, it's about much more than the money, it's about community, it's about the environment, and it's about the social connections between people in a company. Can you dive a bit more into that? I think that's a really nice.
SPEAKER_01:I can. Yeah, I mean one of the one of the last um papers I published before retirement. Um I went deepest into the connection between the moment the moment you begin to think about these different forms of wealth, you begin to think about the who makes the contribution of that form of wealth to the enterprise. And and it's mutually supportive with a multi-stakeholder governance structure because the moment you see um skills as a form of wealth, the moment you see the labour process as a form of wealth, you start asking, well, how do I reward the people who contribute that form of wealth to the enterprise? And of course, we're used to seeing the contributors of financial capital as contribute uh as contributing a form of wealth that needs to be rewarded. We're not so used to seeing the people who um contribute labour or contribute their social connections, their networks, um, you know, people who facilitate access to a market, you know, that these they are contributing wealth when they connect you to other people, to other communities. They are contributing wealth when they actually make things that you can then sell on the market. So the moment you see them as legitimate investors of different forms of wealth, you ask the question, how can I reward the people who enable us to exist and be productive? So you have to talk about sharing any surpluses that are generated to reinvest in all of the contributors who create the wealth in your enterprise and indeed in the wider community.
SPEAKER_02:Yes, that's a brilliant point. And with regards to co-living dial specifically, so our customers would be residents in a co-living community, and and they really contribute to the formation of the community, so they're effectively building wealth, a community wealth or a social wealth, if you if you will. And how do you see so how do you see the fair shares uh enhancing that aspect of community wealth building?
SPEAKER_01:Uh well, the the the governance model is key here because uh we used to do a learning exercise when we were teaching people about multi-stakeholder governance, not just the legal structure, but the actual practice. Um we used to give them a decision um to make and we would divide them up into their stakeholder groups. But it wasn't just a question of having a discussion with the people in your own stakeholder group. We would then take people from the different groups and put them together into a second round of discussions. So you have discussions within your own stakeholder groups to generate your own understanding of your own interests. Then you have to bring those interests into a second round of talks where people from different stakeholder groups are negotiating with each other. And then only then do you vote. And we used to encourage people you're not voting for your stakeholder group, you're voting according to your own conscience, so that you take a decision that you think is best for the enterprise. And what's crucial here is that the fair shares model, unlike some of the other multi-stakeholder models, does not say you are a member of one group and not a member of the other group. You may work there, have put money in, and also be a customer of the enterprise you are. So in DAOA living, you may be a resident, a provider of capital through rents or or some other form of capital contribution. You're also a user of what you create if you're living in there. So you use what you create, you may contribute to what you create, you may have put in labor, you may have put in money. So you're you're you're legitimately allowed to be part of discussions in those different constituent groups. Um, you may restrict where your primary vote is is cast, but the point is that you engage in a lot of community activity as a result of debating and discussing with the groups that you have a natural affiliation to. Yeah, I hope that makes sense.
SPEAKER_02:That makes a lot of sense. That's that's great. And it really breaks down those barriers between, you know, in a co-living community or any standard property, there's a kind of binary distinction between a landlord and a resident. Yes. So this structure starts to really break that down and bring in a much more collaborative element. Dan, is there anything you want to add to that?
SPEAKER_01:Yeah, yeah, I would actually. I mean, one of the uh on the FairShares website, there's one of the most recent publications that we put up a link to was by a student who was studying CSR and ethics, and they wrote an absolutely brilliant essay about what they do is these they go through this learning exercise and they have to write an essay about it. And they absolutely nailed that this kind of governance um enhances your ethical uh reasoning and your ethical capability because you you are confronted with the different interests that you're you're wrestling with. And the own the only way to navigate them is to become more sensitive to the ethics of the decision making that you're taking. How your decisions affect different groups is a question of ethics and your choice between how you enhance one decision over another or the impact it might have. So, what you hopefully get out of this is um really advanced ethical thinking as a result of this form of governance, which can only be good, I would have thought, in the long term for the health of a community, for the health of an economy, and the health of the people as well that live there, importantly. Yeah.
SPEAKER_02:Yeah, absolutely. That's something we care about a lot. I don't know if you want to jump in there, Dan, to add a comment or yeah, this really resonates.
SPEAKER_00:The ability to really reward different types of capital contributions, it's uh is is critical. We say that we live in a capitalistic society, but when we say capitalism, we usually refer to financial capital. And um, a lot of limitations of capitalism, so to speak, are effectively not limitations of capitalism per se, but limitations of a one-dimensional type of capitalism. So I really see how introducing all uh these um inputs and suggestions that you mentioned can really completely change the way people interact, people feel what they own and uh and how they should behave in uh in the community as well. And this is especially relevant for uh communities of people living together because there's so much exchange that happens. So that's a great way to really reward every type of behavior. Something that I'm curious about is uh how granular would you track this type of capital contributions and all these different types of capital? Some people maybe watered it saying, Oh, so does it mean that if I cook dinner for everyone every day, I get more shares? And if one day I don't cook dinner, then I get less shares and so on. So, how um detailed is this gonna be? And it is the fact that all of a sudden other types of capitals are tracked, is it gonna affect that, let's say, positively, or is it also gonna introduce some dynamics of conflict of interest, over justifications, any sort of thing?
SPEAKER_01:Yes, I mean I think there are I mean there are there are conflicts of interest, but I I guess where the you know the ethical advances come is where you internalize those conflicts of interest in in one in each person. So the fact that the person lives in a property and is also an owner of a property means that they immediately feel if they can benefit from both um relationships, they will feel the ethical dilemmas in everything they make. And in in many cases, one set of ethical um argument will probably override others. Um how granular the question of granularity. Um one of the most fascinating things about having been a researcher is um rooting the fair shares model in the practices of organizations that have existed for quite a long time. The fair shares model might be new, but if you look at the history of, for example, the Mondragon co-ops over 60 years, the John Lewis Partnership over nearly 100 years now, um and indeed you know the old co-op movement has existed for 200 years, it's it's looking at how they developed um organizational structures and systems to address the issues that they faced at the time. Um and they and they addressed those issues intelligently by creating governance systems that enable people to have um different ways of expressing their voice. So, you know, in John Lewis, they had a free press. I mean, I I talk about a free press, you know, any person who puts a question in to uh their their company-wide newspaper, the managers have to answer it. I mean, they there might be some cases where they don't answer it as fully for financial reasons. But the point is that the expectation is the people who are at the center of decision making, you know, through a representative governance system, have to account to the wider community as to how they've reached their decisions and the fact that other people are encouraged to ask the question. So that kind of culture enables you to address the granular questions that you've you mentioned, the granularity, the sophistication with which people come up with solutions often takes extended periods of time. Um and of course, you know, not everybody's always happy with the cultures that emerge from those, you know, that the employee ownership world has its critics, you know, including in the co-op movement. Um, social enterprise model has its critics, you know, coming out of the co-op movement and employee ownership movement. All the people in this space, you know, they're that they're they remain skeptical as to what the optimum solution is. And I don't know, an optimum solution can only be found in a particular context by a particular group of people facing a particular problem, I think to me. And and the more exact the more situations that we face and the longer the period of time goes, and the the more decisions that are publicized and and studied, the better I think that granularity will uh develop. Um and and uh you know it's the fact that these organizations have existed in such a stable format for such a long time that it's um it's worth understanding what governance mechanisms they use to get there.
SPEAKER_02:Great, Rory. And just to bring it bring it back to kind of the feeling for a resident and co-living dial, I really like the ethical, you know, raising the sort of ethical conscience of decision makers in the fair shares. And if I take a like a really real-world example of a resident in a building who might typically think, I'm paying rent, the management can sort out my problems, I don't care about all those other things, right? Quite rightly, because they're busy, they've got to do their job, take care of their families. But when you when you place somebody in a position of actually you're an owner, you're an owner and a resident, all of a sudden when they make a decision that affects their neighbors, they might be thinking, okay, I'm just in this for myself, but well, wait, I'm also an owner. I can really, you know, change things here. It just might nudge them in a in a direction of let me make a decision that's going to help my neighbor because I quite like my neighbor down the, you know, down the corridor.
SPEAKER_01:And building on that, you know, if if the inclusive governance structures are in place, there will be places they will meet their co-owners and discover that they have things in common, um, which they wouldn't have been aware about if they were just living you know an isolated life. Um you know, I unfortunately I don't know my neighbors particularly well because there are no governance structures in our street that bring us together. Um but if there were, we would discover that the things that we we collectively felt strongly about. Um and I think that's the kind of thing that the co-living DAO will facilitate, that people will discover what their interests are in common with other people more often than um if they were just you know private residents in a corporate landlord situation.
SPEAKER_02:That's right. And I I kind of like to think of it as a container that enables people to connect better. There's a way that I kind of visualize it there. And and yeah, I think it's so true that those connections can be facilitated as a result of the fact that someone is a decision maker now, they're not just in it for themselves, you know. And if if we switch the perspective now from customers to investors, what do you think the advantage is for a traditional property or real estate investor to invest in a fair shares property company? What does that look like? What you know, why would an investor invest in a different kind of structure like the fair shares?
SPEAKER_01:I think I think some of it's going to come back to the motivation. Um I would have thought if the chances of creating a cohesive community over time um are realized more often in a uh a fair shares in a company setting, then people who lend money for the development of uh communities, you know, house housing projects in communities, they would see them as a as a good investment. Um it might be a fairly traditional loan facility that gets repaid, but if if the chances of repaying are that much higher, then they would be seen as a lower risk than some other forms of development. So those with a real development mindset, I would thought those who are providing um money for development because they're interested in the development of communities would would look favorably upon this.
SPEAKER_00:And if we stay with the current traditional uh archetype of investor uh that may potentially be interested in different things, but also let's say prioritize financial gains as well. What can you say about the the network effect of creating a federation of fair shares companies as well as the beneficial effects of having ownership within the customers, the users of the company as well? Can that potentially translate into benefits for every other type of capital, too, including financial capital?
SPEAKER_01:I I would have thought that the the I'm not sure what you're proposing to your investment community by way of the tradability of any ownership that they have. I mean, the fair shares model, particularly under company law. Does provide provisions for people you know to offer shares on a stock on a stock market, and those shares obviously could then be traded, providing the group of investors never gain majority voting control over the enterprise. So in those circumstances where you can create a federation of housing groups that creates multiple opportunities for a market where people have maybe invested in a single project and then they want for reasons they need to take their money out and for something else, that there is a market for the shares that they had. So there's obviously something good about property and crowd financing that isn't true of other crowd crowd financing platforms. Um so there's there's a possible possibilities there, but um it's always it's constantly raised by people who've worked in this field um over many decades that the the secondary market for um if you need to get your investment out that you have a way of getting your money back, it could be because you've got your own financial crisis somewhere else in your life. Um and this this applies to residents as much as it applies to outside investors. So you know, if I'm if I'm somebody who's a tenant and I put money in to buy shares through my rents, and I have my own crisis within my family. How how do I help myself out of that? I mean, places like Mondragon have created solutions to that. So people put capital in and they put their share of the surplus back into the enterprise until they retire. But the banking system that backs Mondragon bank allows people to borrow against the asset that they will only get in retirement. So again, there are various solutions to this. But it is a it's a tricky question. You know, people who've have invested their capital, either as an institutional investor or as a private person who's putting it in through the rents, they will need to understand the limitations on being able to access the value that they've contributed and know that there are some mechanisms that they can use if they hit their own, if they hit their own personal need or private need that needs to be addressed. Um, so I hope you find good solutions to that. Um it's an active sort of it's an active line of debate as well. Yeah.
SPEAKER_00:Yeah, and it's a great debate to participate in, um, especially because I've noticed many delimations with uh um previous models that effectively actually a lot of people have raised the question of liquidity, how liquid my shares will be and how easy it is to to sell if need be, and and and so on, which is uh exactly why the the approach that we utilize in Equilibri DAO is uh to combine the the power of the legal framework of the the fair shares, in particular fair shares commons, with the technology of uh the blockchain and tokenized shares, with tokenized shares uh and the international liquidity pools and so on. Uh that is uh how we're we're tackling this, and it's uh effectively one of the uh biggest innovations that it's it's something that we haven't seen yet in the fair share space, uh specifically utilizing liquidity pools, which can be a way um of doing it without the need for a bank or for other institutions that historically have addressed this.
SPEAKER_01:In in housing, I mean it it I mean I one of my clients I did a project at um it was a housing association with 20,000 tenants, and the endless frustration of the managers of the housing association was they collect these rents, they hold these rents, you know, in in the bank, but the council that controlled their housing association wouldn't let them spend them the way that they wanted. Now, in a in a fair shares commons company that is a living community such as your own, you would have uh more control over decisions as to what to do with the accumulated rents. Now, obviously, if those rents are buying shares, those shares are going to be protected in law. But the the residual rents will create a liquid pool which gives you some scope to decide how to um cope with the short-term needs that arise when people need them. So they could have done so much more with the rents that they were collecting if they had been allowed to, you know, including investing in the properties. So the things like you know, they wanted to do solar panels in on a much bigger scale than they were able to, but the council wanted the money back.
SPEAKER_00:Yeah, it's great that you're bringing up all these examples because we can see how this model that is already quite powerful has uh had to inevitably encounter some um obstacles along the way, and therefore we can see what's possible once these obstacles are removed or otherwise uh addressed. So that's uh definitely uh great scope and great opportunity. Gareth, you want to add something about this?
SPEAKER_02:Yeah, and I think you said it beautifully already, actually. I think it's um really well covered, but yeah, I mean getting the financial flows into the right place uh is really important alongside those other forms of wealth. And so we think we've got something fairly unique in the co-living dial structure. Um is it yeah, I mean, I think we've covered I've covered everything we want to discuss. If there's anything else, Rory, that you want to just you feel a burning desire to pop in there or or discuss.
SPEAKER_01:I just I just want to you know thank you for um inviting me again to contribute to your thinking. And uh I would love to hear more about the progress that you make in the future. Um, I think uh what's interesting or or fascinating here is um there are different sort of fair shares communities that are beginning to look at the sort of federalization of the community of companies rather than just single enterprises getting off the ground. This is very much a second generation second generation thinking in fair shares. I know that uh Graham Boyd has produced a new book on the ergodic, isn't it, the ergodic investor, which is basically this idea of using federations of enterprises to support each other. Um, and and and the survival rates of those communities are much, much better than when you've just got single companies that are trying to survive isolated in a market. So I'm quite quite excited to hear what uh you know what you'll report in the next three to five years. So good luck with it.
SPEAKER_02:Great, thank you so much, Rory. Thank you for having taken the time to come and join us and contribute some of your great thinking to what we're doing.
SPEAKER_00:Okay, good luck, Professor Rory Ridley Doff. Thank you so much for being with us today and share your insights. And uh for all the listeners, hope you enjoyed the session, subscribe to the podcast, and uh we'll be back with you very, very soon. Cheers. Bye.