A cooperative enterprise takes off
The pioneering project VillageOffice, which maintains a network of coworking spaces, has established itself in both urban and rural areas over the past three years. The new company is confident about the future as its development partnership comes to an end, not least due to its set-up as a cooperative – a form of company which is just starting to gain a foothold on the start-up scene.
The project has reached a critical point. At the end of the support period, David Brühlmeier and Jenny Schäpper-Uster, the founders of VillageOffice, and Leila Hauri, a project manager at Engagement Migros, met at the sphères book café on the river Limmat in Zurich to review their partnership over the past few years. They also took the opportunity to take a look at the future and to draw the right conclusions from the experience gained.
VillageOffice has been developing a Switzerland-wide network of local coworking spaces, particularly in rural areas, since 2016. The network now includes 60 coworking spaces throughout Switzerland. They can supplement or replace traditional workplaces. The aim is to enable everyone in Switzerland to reach the nearest coworking space within 15 minutes by bicycle or public transport by 2030. This would cut the number of commuters and relieve the strain on Switzerland’s infrastructure.
VillageOffice adopted a new approach not just to the organisation of the workspace, but also the form of company it opted for. In contrast to many start-ups, which often set up as a stock corporation or limited liability company, they founded a cooperative. It now has precisely 164 members. David Brühlmeier and Jenny Schäpper-Uster had good reasons for choosing to set up their company as a cooperative, as they explain.
Did you know from the outset that you wanted to set up a cooperative?
D.B. Someone pointed out to me at an early stage in the process that the form of company has a major impact on the character of a company or project. That’s how I came up with the idea of a cooperative. A cooperative would embody exactly what our company stands for – in our case cooperation within a community, a network.
Did you consider other forms of organisation?
J. S. Not really, because it was clear to us that we wanted to give everyone in our company a say right from the word go. From that point of view, cooperatives are the perfect form of organisation. Memberships start at CHF 50. You don’t have to be a major investor to join us.
Has the decision to set up a cooperative paid off over the long-term?
D. B. Absolutely. I have become a real fan of cooperatives. Lots more cooperatives should be set up, if you ask me. In a cooperative, everyone feels a sense of commitment to the idea. That’s highly motivating.
What impact does the form of company have on your members?
J. S. I find that being a cooperative encourages people to contribute. You feel part of it. It’s also a well-established concept in Switzerland. There’s no need to explain how it works. People know exactly what a cooperative does – it helps people to help themselves. Every single person can make a contribution to improving the situation of the members and ultimately their own too.
“People know exactly what a cooperative does – it helps people to help themselves.”
Have there been any downsides?
J. S. We’ve had some issues with funding providers. Some banks cannot take a stake in cooperatives for regulatory reasons. We don’t appeal to lots of investors because we don’t pay out a return.
That makes the members of the cooperative all the more important ...
D. B. Exactly. There’s no investment ceiling with a cooperative. Whether somebody invests CHF 50 or CHF 50,000 in the cooperative, they both have a say in exactly the same way. It’s a challenge to get people to recognise this equality and not feel that those who have invested CHF 50,000 should have more of a say.
Are there any achievements you’ve been particularly pleased with as far as the cooperative is concerned?
J. S. When we realised that a start-up can also work successfully based on a cooperative form of organisation. What I mean is that we don’t have any hierarchies and everyone contributes to the community. There’s a mutual trust which I find wonderful.
D. B. And on another level, when we received the support of the Alternative Bank and Engagement Migros. The fact that VillageOffice was selected as a special cooperative project in the Raiffeisen anniversary year of 2018 and we were able to take part in interdisciplinary discussions at the Raiffeisen Forum in Bern was also fantastic.
“Lots of educational work is still needed.”
Would you say there is growing hype around cooperatives on the start-up scene?
D.B. I believe that emerging companies are increasingly looking for alternatives to the traditional legal forms, such as stock corporation and limited liability company. The example that springs to mind is “Die Republik” – a media company set up as a cooperative. Lots of educational work is still required. Banks and fiduciary companies in particular are not sufficiently well-acquainted with this model.
J. S. Cooperatives are very much in keeping with the mood of the times. Many new companies are focusing on sustainability, including in their corporate structure. Cooperatives are very much in tune with this trend because they are not all about chasing profit at any cost.
How have you found the support from Engagement Migros?
D.B. Absolutely invaluable. We’ve been able to call upon the support of the pioneer lab coaches whenever we’ve needed to. This is a spin-off that assists the supported projects by providing experts. We greatly appreciated the input from the coaches, who possess vast hands-on experience, especially in areas such as the definition of our target segment. During the coaching sessions we were treated as equals. I felt that was a great approach.
Did you use the coaching sessions on an ongoing basis?
J.S. Yes, especially during the initial stage. They provided us with some fantastic support on HR issues and during the entire staff recruitment process. A communications specialist was also made available to us. First of all, she listened to our situation and requirements and then gave us some pointers which we needed to pay particular attention to in the application document. Finally, she supported us during the interviews as a neutral observer. We would have liked to recruit her because of the passion and commitment she showed.
Leila Hauri, the project manager at Engagement Migros, was also pleased with how the project went: “We thought VillageOffice was an exciting proposition right from the off because it breaks completely new ground in the field of employment mobility and addresses our ecological future.” The project had to overcome various hurdles before reaching the current completion stage. “It was difficult initially to persuade companies that an external workplace in a coworking office makes sense,” says Hauri. This meant the business model had to be analysed and modified in the pioneer lab at an early stage – from the sale of coworking packages to companies to charged-for consultations for municipal authorities which were pleasingly very receptive and interested in opening coworking locations in their municipality.
“This positive spirit is tangible at the workplace.”
Leila Hauri also noticed how the organisational form of a cooperative had a positive impact on corporate culture. “Cooperative members identify strongly with the company. The positive spirit is tangible at the workplace.” That is why Hauri is confident about the project enjoying a successful future after the foundation years. She firmly believes that “demand for coworking spaces is growing.” Especially in the form provided by VillageOffice as a communal space which also has a child day-care facilities, for example. Jenny Schäpper-Uster and David Brühlmeier are also looking to the future with great assurance. “Many companies are still tentative about coworking. But I’m certain we’re going to see a big upsurge in demand, especially with the increasing number of commuters,” indicated Schäpper-Uster.
The SCHUB initiative for cooperatives
“There are good reasons for companies to provide their employees with an external workplace. They have to rent less space, which is attractive financially,” says Brühlmeier. Employers that wish to remain attractive in future also need to embrace this kind of model, he observes. The Federal Office of Information Technology has taken this on board and recently begun providing its employees with workplaces at VillageOffice locations. The two founders would be delighted if more major customers would follow suit.
After the successful set-up of Village Office, the issue of cooperatives has not simply been ticked off the list at Engagement Migros – quite the opposite in fact. Linda Sulzer, who works as a project manager for the support fund, explained: “We hope to foster entrepreneurship that takes account of social and environmental benefits to a greater extent.” It is precisely this combination of values, purpose and endeavour that will create a more resilient society and economy. This was behind the recent launch of the SCHUB initiative – a start-up support programme that aims to raise the profile of social entrepreneurship opportunities in general and cooperatives in particular and to support the founders of such ventures. The programme combines mentoring services with a social business toolbox and cross-sector networking opportunities.