So the guy that’s cur­rent­ly try­ing to break up Cal­i­for­nia is the grand­son of Pio­neer Fund founder and ardent seg­re­ga­tion­ist Wycliffe Drap­er? Huh.

Woah, large num­bers of well paid work­ers aren’t jump­ing at the chance to cre­ate a wealthy tech­no-enclave? Bizarre:

Hul­la­baloo
Ven­ture Cap­i­tal­ist shocked that not every­one is a self­ish jack­ass like him
Wednes­day, March 26, 2014
by David Atkins

The ven­ture cap­i­tal­ist who wants to turn Cal­i­for­nia into six dif­fer­ent states is shocked that the wealth­i­est, most lib­er­al parts of the state want noth­ing to do with his plan:

Ven­ture cap­i­tal­ist Tim Drap­er says he is get­ting “close” to col­lect­ing the nec­es­sary 800,000 sig­na­tures need­ed to get his “Six Cal­i­for­nias” mea­sure before state vot­ers in 2014 — but he acknowl­edges his own inter­nal polling shows Sil­i­con Val­ley is most opposed to the idea of split­ting the state into six parts.

“You’d think that Sil­i­con Val­ley would ben­e­fit” great­est from the plan, said Drap­er, whose plan calls for the foun­da­tion of a state of Sil­i­con Val­ley, which econ­o­mists sug­gest would like­ly be the rich­est state in the nation. But “Sil­i­con Val­ley is the least like­ly to vote for this,” Drap­er acknowl­edged Tues­day. “It’s bizarre.”

Drap­er made the state­ments at a salon before a crowd of tech insid­ers, jour­nal­ists and San Fran­cis­co busi­ness insid­ers Tues­day night. The evening of dis­cus­sion to explore the idea of Cal­i­for­nia seces­sion was host­ed in the San Fran­cis­co home of pub­lic rela­tions guru Susan Mac­Tavish, founder of the Liv­ing Mac­tavish fash­ion, food and design web­site...

Drap­er on Tues­day would not reveal his inter­nal polling — oth­er than to say gen­er­al­ly that num­bers in Sil­i­con Val­ley are strong­ly opposed to the plan and oth­er more con­ser­v­a­tive parts of the state, like the Cen­tral Val­ley, are in favor. “This is not going to hap­pen overnight,” he said.

It’s always a big shock to self­ish rich peo­ple that most oth­er well-to-do peo­ple aren’t as self­ish as they are. It’s impor­tant to remem­ber that many of the very wealthy are like War­ren Buf­fett, peo­ple who vote pri­mar­i­ly for Democ­rats and aren’t afraid to pay a lit­tle more in tax­es to have a fruit­ful, sta­ble and fair­er soci­ety. It’s not even the 1% that are ruin­ing things for the rest of us; it’s a very socio­path­ic, very ener­getic frac­tion of that 1%. And they’re real­ly shocked when oth­er peo­ple don’t behave as asinine­ly as they do.

Mean­while, it’s no sur­prise that the most conservative–and poorest–parts of the state are in favor this guy’s plan. The rubes who get the most from gov­ern­ment ser­vices always believe that some poor­er, dark­er city dweller is get­ting their hard-earned mon­ey. It’s the old­est con in the book, and they buy into it every time.

Mud­dled schem­ing usu­al­ly works in pol­i­tics, and it seems to be res­onat­ing with parts of the state, but not Sil­i­con Val­ley. What’s going wrong this time? Could it be too mud­dled:

Los Ange­les Times
Opin­ion
Tim Drap­er’s argu­ment for split­ting Cal­i­for­nia into six states makes zero sense

By Ted Rall

Feb­ru­ary 27, 2014, 6:00 a.m.

Grandios­i­ty comes stan­dard when you’re a third-gen­er­a­tion one per­center like ven­ture cap­i­tal­ist Tim Drap­er.

Among oth­er things, the 55-year-old claims that viral mar­ket­ing is his “orig­i­nal sug­ges­tion.” (What­ev­er.) He found­ed the nonac­cred­it­ed Drap­er Uni­ver­si­ty of Heroes for aspir­ing entre­pre­neurs, based in part on Har­ry Potter’s Hog­warts. He’s been called “George W.’s point man in Sil­i­con Val­ley,” but he vot­ed for Barack Oba­ma in 2008.

Draper’s lat­est for­ay into the polit­i­cal are­na is a pro­posed bal­lot ini­tia­tive that, if he gar­ners the required 807,000 sig­na­tures, will ask vot­ers in Novem­ber to do for the Gold­en State what the 1990s did to Yugoslavia — split Cal­i­for­nia into six states. (This is his sec­ond dance. Vot­ers reject­ed his manda­to­ry school vouch­ers propo­si­tion in 2000.)

“Cal­i­for­nia as it is ungovern­able,” Drap­er says. “It is more and more dif­fi­cult for Sacra­men­to to keep up with the social issues from the var­i­ous regions of Cal­i­for­nia. With six Cal­i­for­nias, peo­ple will be clos­er to their state gov­ern­ments, and states can get a refresh.”

Actu­al­ly, the result wouldn’t be six Cal­i­for­nias. It would be six pieces of what used to be Cal­i­for­nia:

San Diego + Orange Coun­ty = South Cal­i­for­nia

L.A. + San­ta Bar­bara = West Cal­i­for­nia

Bak­ers­field + Fres­no + Stock­ton = Cen­tral Cal­i­for­nia

San Fran­cis­co + San Jose = Sil­i­con Val­ley

Sacra­men­to = North Cal­i­for­nia

Eure­ka + Red­ding metro = the awe­some, total­ly not broke, state of Jef­fer­son

Is Draper’s mea­sure a good idea? I don’t know. What I do know is that the argu­ments Drap­er makes in favor of balka­niza­tion make zero sense. What­ev­er the mer­its of his splitsville scheme, it’s scary to endorse any­thing ginned up by such a messy mind.

Con­sid­er these excerpts from Drap­er’s recent inter­view with Time. They make fel­low right-wing mul­ti­mil­lion­aire Don­ald Trump look lev­el­head­ed in com­par­i­son:

“We now spend the most and get the least. We spend among the most for edu­ca­tion and we’re 46th in edu­ca­tion. We spend among the most for pris­ons, and we are among the high­est recidi­vism rates.... So the sta­tus quo is fail­ing. And there have been some very good peo­ple run­ning Cal­i­for­nia, gov­ern­ing Cal­i­for­nia. So it must be sys­temic. At best, the sys­tem seems to be on a spi­ral down. At worst it’s a monop­oly, and in a monop­oly, they can charge what­ev­er they want and pro­vide what­ev­er ser­vice they want. In a com­pet­i­tive envi­ron­ment, peo­ple get good ser­vice and they pay fair prices.”

...

Drap­er says the state is a monop­oly that “can charge what­ev­er they want and pro­vide what­ev­er ser­vice they want.” To the extent that that’s true, it’s true of all gov­ern­ments. It’s not as if dri­vers in West Cal­i­for­nia will be able to pay low­er fees for their driver’s licens­es by get­ting them in South Cal­i­for­nia, or that South Cal­i­for­nia would have any incen­tive to offer low­er fees, i.e., com­pete.

...

We don’t have to look far for exam­ples of states whose cap­i­tals are clos­er to their cit­i­zen­ry. New Eng­land is divvied into tiny states. “Our gov­ern­ment will be more in touch with our indi­vid­ual con­stituents” if Cal­i­for­nia breaks into small­er parts, says Drap­er. If he’s right, the New Eng­land states should be a shin­ing bea­con of gov­er­nance. But they’re not. They’re just aver­age.

There is just no evi­dence that effi­cient or respon­sive ser­vice is relat­ed to a state’s size. His­to­ry, resources and luck are the real deter­mi­nants.

By most stan­dards, Ver­mont and Mass­a­chu­setts offer bet­ter ser­vices to their cit­i­zens than Maine or New Hamp­shire (not to men­tion live­li­er job mar­kets). But they’re not com­pet­ing against each oth­er. Why don’t we see an exo­dus of for­mer Main­ers to Ver­mont? Peo­ple who stay in Maine stay there because they like it. They grew up there. Their fam­i­lies are there. They dig the lob­ster rolls. What­ev­er. They’re not going to move to Mass­a­chu­setts just to get Rom­n­ey­care.

Here’s Drap­er again in Time: “The strongest argu­ment for six Cal­i­for­nias is that we are not well rep­re­sent­ed. The peo­ple down south are very con­cerned with things like immi­gra­tion law, and the peo­ple way up north are frus­trat­ed by tax­a­tion with­out rep­re­sen­ta­tion. And the peo­ple in coastal Cal­i­for­nia are frus­trat­ed because of water rights. And the peo­ple in Sil­i­con Val­ley are frus­trat­ed because the gov­ern­ment doesn’t keep up with tech­nol­o­gy. And in Los Ange­les, their issues revolve around copy­right law.”

Copy­right law. Yep, that’s what all Ange­lenos care about. Who could ever for­get the Intel­lec­tu­al Prop­er­ty Riots of 1992? Broth­er against broth­er, PC vs. Mac, VHS vs. Beta.

Seri­ous­ly, though, doesn’t Drap­er know that the fed­er­al gov­ern­ment, not the state, has juris­dic­tion over bor­der con­trol? Tech reg­u­la­tions, the Inter­net — that is the feds too. And copy­right.

If the strongest argu­ment in favor of break­ing up Cal­i­for­nia is to address issues that states don’t con­trol — well, don’t make me say it.

Drap­er adds: “I’ve noticed that the peo­ple most adamant about cre­at­ing their own state or being a part of their own state are the poor­est regions, and in the cur­rent sys­tem, they are not hap­py, because it is not work­ing for them. So if they had their own state, I believe all of those states would become wealth­i­er.”

By Draper’s rea­son­ing, Mis­sis­sip­pi and Alaba­ma — the nation’s poor­est states — should split apart too. They’d all become wealth­i­er, right?

...

It might seem like there’s no such thing as a too-mud­dled argu­ment in Amer­i­ca pol­i­tics, but that was a pret­ty con­fus­ing mess of argu­ments put forth by Drap­er. The cen­tral idea behind his argu­ment — the idea that divid­ing states up to cre­ate “com­pet­i­tive” gov­ern­ments that com­pete for ser­vices improves life for every­one — just does­n’t make any sense. Why? Because Mov­ing to a new state isn’t some casu­al trans­ac­tion. Sure, the wealthy might be able to afford to do, but for the rest of us any tweaks in states ser­vices prob­a­bly isn’t going to make mov­ing worth it. It’s not a real com­pe­ti­tion.

Now, if states behaved like busi­ness and actu­al­ly went out of their way to recruit indi­vid­u­als to their states, includ­ing pay­ing the costs of the relo­ca­tion and oth­er guar­an­teed ben­e­fits or sub­si­dies, well that could be a kind of com­pet­i­tive gov­ern­ment sit­u­a­tion. But, of course, states aren’t about to start recruit­ing indi­vid­ual peo­ple with com­pen­sa­tion pack­ages because that would be absurd. So it’ll be inter­est­ing to see if Drap­er ends up unmud­dling this mess, or just remud­dles it.

The future states of Droughtis­tan (Droughtis­tan 1–6), are one step clos­er to becom­ing a real­i­ty. The drought is here. Now a vote is required:

TPM Livewire
Tech Investor Says Plan To Split Cal­i­for­nia Head­ed For 2016 Bal­lot

Cather­ine Thomp­son – July 15, 2014, 9:18 AM EDT

The wealthy Sil­i­con Val­ley investor who wants to split Cal­i­for­nia into six sep­a­rate states says he’s gath­ered enough sig­na­tures to put the effort to the bal­lot in 2016.

Ven­ture cap­i­tal­ist Tim­o­thy Drap­er’s Six Cal­i­for­nias ini­tia­tive tweet­ed Mon­day that he planned to file the sig­na­tures Tues­day in Sacra­men­to.

#Six­Cal­i­for­nias will be sub­mit­ting sig­na­tures in Sacra­men­to tomor­row for place­ment on the Novem­ber 2016 bal­lot. Stay tuned for cov­er­age!— Six Cal­i­for­nias (@SixCalifornias) July 14, 2014

A spokesman for the cam­paign, Roger Salazar, told Reuters that that the ini­tia­tive had gath­ered more than the rough­ly 808,000 sig­na­tures need­ed to place it on the Novem­ber 2016 bal­lot.

...

Drap­er has invest­ed $750,000 of his own mon­ey in the ini­tia­tive, which would par­ti­tion Sil­i­con Val­ley off from the rest of the state. A Field Poll con­duct­ed in Feb­ru­ary found that 59 per­cent of res­i­dents opposed Drap­er’s plan, how­ev­er, and even if vot­ers were to approve the mea­sure it would still require the approval of the U.S. Con­gress.

Just a heads up every­one, the Bizarro League is prob­a­bly going to get­ting some new mem­bers soon:

Pan­do Dai­ly
The Drap­er Uni­ver­si­ty “Super­hero Pledge”: Run, run for your life!

By Paul Carr
August 26, 2015

Else­where on Pan­do today, Sarah has reviewed Episode Three of “Start­up U,” the real­i­ty show based on Tim Draper’s “Uni­ver­si­ty of Heroes.”

For me, the most shock­ing moment of the show is one that the pro­gram­me’s mak­ers slipped in almost as an east­er egg: The dai­ly pledge that Draper’s stu­dents are forced to recite every morn­ing, like Amer­i­can school chil­dren pledg­ing alle­giance to the flag or pris­on­ers in the Philip­pines danc­ing to Thriller in the exer­cise yard.

View­ers were treat­ed only to one line from the pledge before cam­eras cut away:

“I will pro­mote free­dom at all costs.”

Ho. Ly. Shit.

...

Now, thanks to Drap­er U “star” and new Pan­do read­er David Kram, we have the entire text of the pledge. Cer­tain­ly the free­dom line is the most loony lib­er­tar­i­an part of it, but the whole thing beg­gars belief. Again, this is what Drap­er demands his paid stu­dents chant every morn­ing before they set to work. It’s called “The Super­hero Oath.”

I will pro­mote free­dom at all costs.

I will do every­thing in my pow­er to dri­ve, build and pur­sue progress and change.

My brand, my net­work, and my rep­u­ta­tion are para­mount.

I will set pos­i­tive exam­ples for oth­ers to emu­late.

I will instill good habits in myself. I will take care of myself.

I will fail and fail again until I suc­ceed.

I will explore the world with gus­to and enthu­si­asm.

I will treat peo­ple well.

I will make short term sac­ri­fices for long term suc­cess.

I will pur­sue fair­ness, open­ness, health and fun with all that I encounter. Most­ly fun.

I will keep my word.

I will try my best to make repa­ra­tions for my digres­sions.

So far, these peo­ple are being groomed to mur­der us all.

But then come the caveats. Because no one wants to be penned in by promis­es to “keep my word,” “treat peo­ple well” and “pur­sue fair­ness, open­ness, health” should those pledges get in the way of… yun­no… dis­rup­tion or free­dom.

And so we have…

The Black Swan Clause: I am bound to this oath unless in my trav­els I deter­mine that the oath has some­how missed some­thing impor­tant and extra­or­di­nary.

Like geno­cide, per­haps.

Or trav­el­ling the world, enslav­ing indige­nous pop­u­la­tions and forcibly con­vert­ing them to Draperism...

The Evan­ge­lism Clause: I will pro­mote and add to the ongo­ing suc­cess of Drap­er Uni­ver­si­ty, its stu­dents, its fac­ul­ty, its admin­is­tra­tion, and its facil­i­ties. I will help pre­pare the next gen­er­a­tion of Super­heroes.

(That one’s non-nego­tiable as this guy found out when he broke the pledge...

Tim had me write out his Evan­ge­lism Clause 100 times on pub­lic walls after I post­ed about my frus­tra­tion with hav­ing per­son­al prop­er­ty stolen on social media. (I under­stood that he felt like it might dam­age his rep­u­ta­tion.)

P.S.

The Super­hero Clause: I will accept the life­long oblig­a­tion to hone my Super­hero pow­ers, and apply those Super­hero pow­ers to the good of the uni­verse.

I’m not jok­ing. They’re going to kill us all.

Be afraid. Be very afraid.

Here’s a sto­ry about labor orga­niz­ing in the US worth keep­ing an eye on: A new ‘union incu­ba­tor’ backed by ven­ture-cap­i­tal­ist has just popped up. On its own that would be a remark­able sto­ry. But it’s all the more remark­able when you learn the iden­ti­ties of some of these ven­ture cap­i­tal­ists.

The new com­pa­ny, Unit of Work, promis­es address the pathet­i­cal­ly low rates of union mem­ber in the US work­force, with just over 6% of pri­vate sec­tor work­ers in the US being a mem­ber of a union in 2022. The com­pa­ny’s goal is lit­er­al­ly the cre­ation of new unions from non-union­ized work­forces. Ok, actu­al­ly, the com­pa­ny’s goal is a prof­itable pay­out for those ven­ture cap­i­tal­ists, but it’s work­ing from a busi­ness mod­el that achieves that pay­out by cre­at­ing as many new dues-pay­ing union mem­bers as it can as quick­ly as pos­si­ble. Unit of Work pro­vides free con­sult­ing ser­vices, soft­ware, and what­ev­er oth­er guid­ance is required for the cre­ation of those new unions. Once the union is cre­at­ed, the union can then choose to con­tin­ue pay­ing Unit of Work month­ly fees for the var­i­ous ser­vices involved with run­ning a union.

But that’s just the ini­tial phase of the busi­ness mod­el. The sec­ond phase is the IPO, when the ini­tial investors cash out their shares. So who would those new investors be? The unions them­selves. Yep, the new­ly cre­at­ed unions will even­tu­al­ly buy out the pri­vate investors. That’s the busi­ness mod­el. At least the ini­tial busi­ness mod­el. The busi­ness mod­el pre-IPO. The post-IPO busi­ness mod­el is a lit­tle less clear. Will the union-owned busi­ness con­tin­ue try­ing to turn a prof­it and expand to new unions? Will it instead just run in non-prof­it mode with low­er fees? Who knows. It will be up to the union own­ers at that point. The ven­ture cap­i­tal­ists will be out of the pic­ture by that point. Unit of Work is just a tem­porar­i­ly for-prof­it enter­prise. Even­tu­al­ly it will be run by and for the unions them­selves. At least that’s the pitch we’re get­ting.

So who are the investors behind this? Well, the founder, Jamie Earl White, appears to have a gen­uine labor true-believ­er. Sim­i­lar­ly, Roy Bahat — head of Bloomberg Beta, the ven­ture arm of bil­lion­aire Mike Bloomberg’s media empire — also has a track record of voic­ing sup­port for unions, in par­tic­u­lar in the start-up space.

But then we get to the oth­er known ven­ture cap­i­tal­ist to get on board with this new com­pa­ny: Tim Drap­er, a staunch oppo­nent of pub­lic-sec­tor unions. Recall how Drap­er was the financier behind an effort to split Cal­i­for­nia into six states, which is just one of a num­ber of ini­tia­tives he’s backed to ‘shake things up’. And Drap­er’s grand­fa­ther, William H. Drap­er Jr., was deeply involved in both the inter-war indus­tri­al invest­ments in Ger­many and the post-war build­ing of the coun­try. William’s cousin, Wyck­liff, was the chief finan­cial backer of the eugeni­cist Pio­neer Fund. Tim Drap­er is open­ly say­ing he sup­ports the goals of Unit of Work, in part, because he views it as a means of set­ting up decen­tral­ized unions that aren’t affil­i­at­ed with larg­er nation­al unions. Keep in mind that the cor­po­rate intel­li­gence poten­tial of the com­pa­ny at thwart­ing union­iza­tion efforts — by learn­ing about them ahead of time and learn­ing who is involved in the orga­niz­ing — could be pret­ty invalu­able for those who ulti­mate­ly want to oppose union­iza­tion efforts.

So have any new unions been cre­at­ed yet? Yep, two so far. But there’s obvi­ous­ly a huge poten­tial mar­ket for growth giv­en the absurd­ly low union­iza­tion rates in the US. Will more non-union­ized work­forces find Unit of Work’s ser­vices tempt­ing to use for their union­iza­tion dri­ves? We’ll see. For-prof­it union-orga­niz­ing isn’t the kind of ser­vice one nor­mal­ly asso­ciates with ven­ture cap­i­tal­ism:

LA Times

The orga­nized labor move­ment has a new ally: ven­ture cap­i­tal­ists
Sup­ports of PHS Providers Unit­ed attend a ral­ly in March 2022

By Sam Dean
Staff Writer
Aug. 12, 2022 8:20 AM PT

The staff at PEN Amer­i­ca made the announce­ment in June: They were form­ing a union.

Like their fel­low work­ers at Star­bucks stores and Ama­zon ware­hous­es around the coun­try, the employ­ees of PEN, a lit­er­ary and human rights non­prof­it, decid­ed to form an inde­pen­dent union, unaf­fil­i­at­ed with any of the dozens of major labor unions across the coun­try. But in this case, there was a twist.

“We’ so grate­ful to have been sup­port­ed by @UnitUnionizing through­out this dri­ve,” the union dri­ve lead­ers tweet­ed. “We’ve learned so much from their orga­niz­ers, legal advis­ers, and comms experts!”

A start­up backed by Sil­i­con Val­ley ven­ture cap­i­tal­ists, Unit of Work is an unlike­ly can­di­date for the role of labor move­ment cham­pi­on. Its out­side investors have made for­tunes back­ing tech­nolo­gies such as arti­fi­cial intel­li­gence, cryp­tocur­ren­cies and video games. One is among California’s fore­most crit­ics of pub­lic-sec­tor labor unions.

But these peo­ple used to multi­bil­lion-dol­lar sales and IPOs see a big oppor­tu­ni­ty in the atom­ized, restive con­di­tion of America’s work­force and the pos­si­bil­i­ty of trans­form­ing it through a new era of union­iza­tion. “We only invest in areas where we think we can get a return,” said Roy Bahat, head of Bloomberg Beta, the ven­ture arm of bil­lion­aire Mike Bloomberg’s media empire.

Unit’s busi­ness mod­el works like this: The startup’s orga­niz­ers pro­vide free con­sult­ing to groups of work­ers orga­niz­ing unions with­in their own work­places — help­ing them build sup­port to win elec­tions, advis­ing them on strat­e­gy in con­tract-bar­gain­ing ses­sions, guid­ing them through paper­work fil­ings and around legal obsta­cles. Once a con­tract is in place, mem­bers of the new union can decide to pay Unit a month­ly fee — sim­i­lar to tra­di­tion­al union dues — to keep pro­vid­ing sup­port.

Jamie Earl White, Unit’s founder, got his first taste of labor orga­niz­ing as a grad stu­dent at MIT, help­ing orga­nize a sol­i­dar­i­ty cam­paign with cam­pus jan­i­tors push­ing for bet­ter pay and work­ing con­di­tions.

After MIT, he co-found­ed and ran a med­ical device start­up called Com­mon Sens­ing. After step­ping down as pres­i­dent in 2018, he con­sid­ered his next move.

“There were a cou­ple areas I was inter­est­ed in, like edu­ca­tion and direct-to-con­sumer health­care, where I thought we could sub­vert the per­verse incen­tives of the health­care indus­try,” White said. “But what I kept com­ing back to was bring­ing my tech and orga­ni­za­tion­al skills to the labor move­ment.”

The move­ment could use the help. Only 10.3% of U.S. work­ers (near­ly 16% in Cal­i­for­nia) are in a union, down from a peak of near­ly 35% in 1954. In the pri­vate sec­tor, only 6.1% of U.S. work­ers are union mem­bers.

Yet 68% of Amer­i­cans say they approve of labor unions, accord­ing to a 2021 Gallup poll. White believes that gap — along with the recent wave of union­iza­tion at Star­bucks and oth­er employ­ers — reflects a sit­u­a­tion in which demand for the kind of work­place pro­tec­tions unions offer out­strips the sup­ply of unions will­ing to help work­ers orga­nize. Unit’s goal over the next decade is to restore pri­vate-sec­tor union den­si­ty to 8.1%, a rate last seen in 2003.

Some of the largest labor unions, such as the Ser­vice Employ­ees Inter­na­tion­al Union and the Com­mu­ni­ca­tions Work­ers of Amer­i­ca (the par­ent union of the News­Guild, which rep­re­sents work­ers at the Los Ange­les Times), have pushed for new orga­niz­ing. But a recent analy­sis pub­lished in the left­ist mag­a­zine Jacobin found that orga­nized labor as a whole is sit­ting on its assets defen­sive­ly rather than spend­ing on orga­niz­ing dri­ves to grow its foot­print.

White believed he could help push the pen­du­lum back by tar­get­ing work­ers who might oth­er­wise not receive orga­niz­ing resources from a major union and build­ing bet­ter tools for orga­niz­ers, who typ­i­cal­ly rely on a hodge­podge of tech plat­forms and soft­ware to run their cam­paigns.

He con­tem­plat­ed going the tra­di­tion­al path and start­ing a non­prof­it to help work­ers orga­nize. But after talk­ing to peo­ple at labor non­prof­its, he con­clud­ed that “if the idea was to very quick­ly be able to spin up and meet a lot of work­er inter­est — includ­ing soft­ware, which is noto­ri­ous­ly expen­sive to build — being able to raise mon­ey quick­ly was impor­tant.”

So he turned to tech investors.

Bahat led Unit’s $1.4‑million pre-seed round. A rare out­spo­ken sup­port­er of the labor move­ment among ven­ture cap­i­tal­ists, Bahat has con­clud­ed that it’s the best path toward restor­ing eco­nom­ic jus­tice in the U.S. econ­o­my.

“Work has failed mil­lions and mil­lions of peo­ple in the U.S., who have tried to work hard and been unable to pro­vide a decent life for them­selves and their fam­i­lies,” Bahat said, and “orga­niz­ing is one of the ways that work­ers can demand more.” He recent­ly attend­ed the Labor Notes con­fer­ence in Chica­go, a gath­er­ing of the left wing of the U.S. labor move­ment, and is con­ven­ing an Aspen Insti­tute round­table on orga­nized labor.

He sees Unit as a sound invest­ment, liken­ing its busi­ness mod­el to the recur­ring rev­enues of soft­ware-as-a-ser­vice com­pa­nies such as Sales­force. “From my per­spec­tive as a busi­nessper­son, when­ev­er a com­mu­ni­ty has a want that’s going unfilled, there’s an oppor­tu­ni­ty for com­pa­nies,” Bahat said.

One con­cern Bahat had was liq­uid­i­ty: Who would acquire a union-orga­niz­ing start­up, giv­ing a pay­day to investors like him? What would it mean to go pub­lic?

White’s solu­tion is to plan an “exit to com­mu­ni­ty.” Once the com­pa­ny starts earn­ing income, it plans to buy out its investors and give their equi­ty to the unions it helped orga­nize, effec­tive­ly tran­si­tion­ing cor­po­rate con­trol to the cus­tomer base. “Finan­cial investors fun­da­men­tal­ly should not be part of the long-term econ­o­my” of Unit, White said, but they were the short­est route to start­up financ­ing.

The approach has attract­ed some strange bed­fel­lows. The sec­ond invest­ment firm in the round, Drap­er Asso­ciates, is led by Tim Drap­er, a third-gen­er­a­tion ven­ture cap­i­tal­ist, bit­coin evan­ge­list and out­spo­ken crit­ic of orga­nized labor. Drap­er has pub­licly laid California’s ills at the feet of unions, and pub­lic-sec­tor unions in par­tic­u­lar. In 2021, writ­ing that “union boss­es have tak­en Cal­i­for­nia schools from the top to the bot­tom, they have made it so that there are few­er jobs, more home­less, and peo­ple are flee­ing the state to work,” he launched a bal­lot ini­tia­tive to ban pub­lic-sec­tor unions in the state.

Drap­er pulled the plug on the bal­lot mea­sure in Jan­u­ary but hasn’t had a change of heart. “Unit of [W]ork is mak­ing unions decen­tral­ized,” Drap­er wrote in an email explain­ing his invest­ment. “That will be awe­some. Cen­tral­ized unions tend to restrain trade, and gov­ern­ment unions cre­ate bloat­ed bureau­cra­cy and poor gov­ern­ment ser­vice on the whole. Gov­ern­ment unions are the antithe­sis of a free coun­try. The US is sup­posed to be run by the peo­ple. Cal­i­for­nia is run by union boss­es.“

White not­ed that none of Unit’s investors has a board seat, and they con­trol only rough­ly one-fifth of the company’s shares. “Roy is pas­sion­ate about labor, Tim is pas­sion­ate about a lot of things, includ­ing decen­tral­ized tech­nol­o­gy,” but ulti­mate­ly both are pur­su­ing a return on invest­ment and will be phased out of the company’s struc­ture in the same way, White said.

Despite Draper’s enthu­si­asm for inde­pen­dent unions, as opposed to nation­al­ly affil­i­at­ed labor orga­ni­za­tions, Unit’s lead­ers and its web­site make clear that they sup­port their clients if they decide to affil­i­ate with a larg­er union.

...

PEN Amer­i­ca vol­un­tar­i­ly rec­og­nized its work­ers’ union the day after it was announced, mak­ing it Unit’s sec­ond orga­nized work­place, after work­ers at Pied­mont Health Ser­vices, a com­mu­ni­ty health clin­ic chain in North Car­oli­na, won their union elec­tion in March with Unit’s assis­tance.

Unit said that it’s active­ly help­ing oth­er work­ers orga­nize, but those cam­paigns are not ready to go pub­lic.

...

———-

“The orga­nized labor move­ment has a new ally: ven­ture cap­i­tal­ists” By Sam Dean; LA Times; 08/12/2022

“Unit’s busi­ness mod­el works like this: The startup’s orga­niz­ers pro­vide free con­sult­ing to groups of work­ers orga­niz­ing unions with­in their own work­places — help­ing them build sup­port to win elec­tions, advis­ing them on strat­e­gy in con­tract-bar­gain­ing ses­sions, guid­ing them through paper­work fil­ings and around legal obsta­cles. Once a con­tract is in place, mem­bers of the new union can decide to pay Unit a month­ly fee — sim­i­lar to tra­di­tion­al union dues — to keep pro­vid­ing sup­port.”

For-prof­it Union-orga­ni­za­tion. Is that a thing? It is now, assum­ing Unit of Work’s busi­ness mod­el man­ages to suc­ceed. Two new unions have indeed been cre­at­ed. But the com­pa­ny is going to need the work­forces of a lot of oth­er com­pa­nies to fol­low suit and form their own unions for this to become a real work­able busi­ness mod­el that earns a return for these investors. That’s part of what makes this such a remark­able new busi­ness: the lev­el of union­iz­ing would have to increase notice­ably across the US for the investors to turn a prof­it:

...
The move­ment could use the help. Only 10.3% of U.S. work­ers (near­ly 16% in Cal­i­for­nia) are in a union, down from a peak of near­ly 35% in 1954. In the pri­vate sec­tor, only 6.1% of U.S. work­ers are union mem­bers.

Yet 68% of Amer­i­cans say they approve of labor unions, accord­ing to a 2021 Gallup poll. White believes that gap — along with the recent wave of union­iza­tion at Star­bucks and oth­er employ­ers — reflects a sit­u­a­tion in which demand for the kind of work­place pro­tec­tions unions offer out­strips the sup­ply of unions will­ing to help work­ers orga­nize. Unit’s goal over the next decade is to restore pri­vate-sec­tor union den­si­ty to 8.1%, a rate last seen in 2003.

Some of the largest labor unions, such as the Ser­vice Employ­ees Inter­na­tion­al Union and the Com­mu­ni­ca­tions Work­ers of Amer­i­ca (the par­ent union of the News­Guild, which rep­re­sents work­ers at the Los Ange­les Times), have pushed for new orga­niz­ing. But a recent analy­sis pub­lished in the left­ist mag­a­zine Jacobin found that orga­nized labor as a whole is sit­ting on its assets defen­sive­ly rather than spend­ing on orga­niz­ing dri­ves to grow its foot­print.
...

And while it sounds like the founder of Unit of Work, Jamie Earl White, is a true believ­er in the need for labor orga­niz­ing, it’s the part­ners in this ven­ture that have so many scratch­ing their heads. Parters/investors. White turned to ven­ture cap­i­tal­ist like Roy Bahat, head of Bloomberg Beta, the ven­ture arm of bil­lion­aire Mike Bloomberg’s media empire. And sure, Bahat does voice a lot of con­cerns about the hal­lowed out sta­tus of the mod­ern labor move­ment in the US, but he also clear­ly views this project as a for-prof­it ini­tia­tive, sim­i­lar to the soft­ware-as-ser­vice mod­el of Sales­force.

Beyond that, Bahat clear­ly envi­sions sell­ing off his shares in Unit of Work as part of an IPO. So Unit of Work needs to be a busi­ness that appears to have a prof­itable future in order for the ear­ly investors like Bahat to even­tu­al­ly cash out. And that brings us to the unusu­al plan White has for the cash-out phase: have the new­ly formed unions them­selves buy out the ear­ly investors. It’s a fas­ci­nat­ing, if con­fus­ing, busi­ness mod­el. The planned long-term investors are the one group that isn’t nec­es­sar­i­ly look­ing to turn a prof­it: the unions them­selves. Sure, the unions would need steady income streams from the union dues to main­tain them­selves, but they pre­sum­ably aren’t going to be oper­at­ing in a prof­it-max­i­miz­ing mode once they them­selves buy out the investors and become the Unit of Work own­ers them­selves. So it’s a busi­ness that starts off in prof­it-max­i­miz­ing mode in the sense that it wants to cre­ate enough new unions to buy out the ini­tial investors, but once that buy­out hap­pens the incen­tive struc­ture sud­den­ly shifts towards the pri­or­i­ties of the new union-own­ers:

...
White believed he could help push the pen­du­lum back by tar­get­ing work­ers who might oth­er­wise not receive orga­niz­ing resources from a major union and build­ing bet­ter tools for orga­niz­ers, who typ­i­cal­ly rely on a hodge­podge of tech plat­forms and soft­ware to run their cam­paigns.

He con­tem­plat­ed going the tra­di­tion­al path and start­ing a non­prof­it to help work­ers orga­nize. But after talk­ing to peo­ple at labor non­prof­its, he con­clud­ed that “if the idea was to very quick­ly be able to spin up and meet a lot of work­er inter­est — includ­ing soft­ware, which is noto­ri­ous­ly expen­sive to build — being able to raise mon­ey quick­ly was impor­tant.”

So he turned to tech investors.

Bahat led Unit’s $1.4‑million pre-seed round. A rare out­spo­ken sup­port­er of the labor move­ment among ven­ture cap­i­tal­ists, Bahat has con­clud­ed that it’s the best path toward restor­ing eco­nom­ic jus­tice in the U.S. econ­o­my.

“Work has failed mil­lions and mil­lions of peo­ple in the U.S., who have tried to work hard and been unable to pro­vide a decent life for them­selves and their fam­i­lies,” Bahat said, and “orga­niz­ing is one of the ways that work­ers can demand more.” He recent­ly attend­ed the Labor Notes con­fer­ence in Chica­go, a gath­er­ing of the left wing of the U.S. labor move­ment, and is con­ven­ing an Aspen Insti­tute round­table on orga­nized labor.

He sees Unit as a sound invest­ment, liken­ing its busi­ness mod­el to the recur­ring rev­enues of soft­ware-as-a-ser­vice com­pa­nies such as Sales­force. “From my per­spec­tive as a busi­nessper­son, when­ev­er a com­mu­ni­ty has a want that’s going unfilled, there’s an oppor­tu­ni­ty for com­pa­nies,” Bahat said.

One con­cern Bahat had was liq­uid­i­ty: Who would acquire a union-orga­niz­ing start­up, giv­ing a pay­day to investors like him? What would it mean to go pub­lic?

White’s solu­tion is to plan an “exit to com­mu­ni­ty.” Once the com­pa­ny starts earn­ing income, it plans to buy out its investors and give their equi­ty to the unions it helped orga­nize, effec­tive­ly tran­si­tion­ing cor­po­rate con­trol to the cus­tomer base. “Finan­cial investors fun­da­men­tal­ly should not be part of the long-term econ­o­my” of Unit, White said, but they were the short­est route to start­up financ­ing.
...

And then we get to the far more con­fus­ing ven­ture cap­i­tal­ist involved: Tim Drap­er. And as the arti­cle reminds us, Tim Drap­er is no fan of unions. At least not large unions with a nation­al pres­ence. And that appears to be Drap­er’s angle here: if there’s going to be unions, he’d pre­fer them to be local­ized to a sin­gle busi­ness. That said, it sounds like Unit of Work will facil­i­tate the cre­ation of nation­al union affil­i­ates. That’s going to be some­thing to watch here: What will Drap­er do if the unions cre­at­ed by Unit of Work start decid­ing to became affil­i­ates of nation­al unions. That’s like his night­mare sce­nario:

...
The approach has attract­ed some strange bed­fel­lows. The sec­ond invest­ment firm in the round, Drap­er Asso­ciates, is led by Tim Drap­er, a third-gen­er­a­tion ven­ture cap­i­tal­ist, bit­coin evan­ge­list and out­spo­ken crit­ic of orga­nized labor. Drap­er has pub­licly laid California’s ills at the feet of unions, and pub­lic-sec­tor unions in par­tic­u­lar. In 2021, writ­ing that “union boss­es have tak­en Cal­i­for­nia schools from the top to the bot­tom, they have made it so that there are few­er jobs, more home­less, and peo­ple are flee­ing the state to work,” he launched a bal­lot ini­tia­tive to ban pub­lic-sec­tor unions in the state.

Drap­er pulled the plug on the bal­lot mea­sure in Jan­u­ary but hasn’t had a change of heart. “Unit of [W]ork is mak­ing unions decen­tral­ized,” Drap­er wrote in an email explain­ing his invest­ment. “That will be awe­some. Cen­tral­ized unions tend to restrain trade, and gov­ern­ment unions cre­ate bloat­ed bureau­cra­cy and poor gov­ern­ment ser­vice on the whole. Gov­ern­ment unions are the antithe­sis of a free coun­try. The US is sup­posed to be run by the peo­ple. Cal­i­for­nia is run by union boss­es.“

White not­ed that none of Unit’s investors has a board seat, and they con­trol only rough­ly one-fifth of the company’s shares. “Roy is pas­sion­ate about labor, Tim is pas­sion­ate about a lot of things, includ­ing decen­tral­ized tech­nol­o­gy,” but ulti­mate­ly both are pur­su­ing a return on invest­ment and will be phased out of the company’s struc­ture in the same way, White said.

Despite Draper’s enthu­si­asm for inde­pen­dent unions, as opposed to nation­al­ly affil­i­at­ed labor orga­ni­za­tions, Unit’s lead­ers and its web­site make clear that they sup­port their clients if they decide to affil­i­ate with a larg­er union.
...

So it that they’ve devised a busi­ness mod­el that, in its ear­ly phase, starts off with the goal of expand­ing the orga­nized labor force as much as pos­si­ble for the pur­pose of cre­at­ing the own­ers of the com­pa­ny. Future own­ers who will buy out the ini­tial investors. It’s like a cen­tral­ized hub for the decen­tral­iza­tion of unions. At least that’s how the founders are describ­ing it. We’ll see if that’s how it turns out.

But also keep in mind one of the major unad­dressed issues here: so what price per share are these investors hop­ing to sell their shares dur­ing the planned IPO? Like, how would they even begin assess­ing a price for that? After all, the busi­ness mod­el effec­tive­ly changes after the sale. So how do the new own­ers assess what is a fair price here? Will unions be expect­ed to bor­row mon­ey to pay out the investors, with the expec­ta­tion that future union dues will pay back the loans? What’s the plan here? Because if this all turns out to be a kind of giant scam against work­forces on the cusp on union­iz­ing, that’s where the scam gets final­ized. In the IPO pay­out. A pay­out that should have as high a share price as pos­si­ble from the per­spec­tive of the ini­tial investors. How can these investors make the future rev­enue streams of Unit of Work look as promis­ing as pos­si­ble with­out charg­ing their mem­bers exor­bi­tant fees? By con­tin­u­al­ly grow­ing the num­ber of new mem­bers with new unions, that’s how. The IPO suc­ceeds because the unions are hap­py to invest in a thriv­ing union-grow­ing enter­prise with strong growth prospects. So what about less-than-best-case sce­nar­ios? Who knows, but some sort of ‘union-IPO’ is now slat­ed to be thing, which, if noth­ing else, is a good the­mat­ic fit for a con­tem­po­rary Amer­i­ca run by, and for, its oli­garchs.

Each and every day it is incred­i­ble to see the sta­mi­na of cor­po­rate cap­i­tal­ism.

Com­mod­i­fy­ing every­thing, even what was once con­sid­ered work­er resis­tance.

It must be admit­ted that cap­i­tal­ism as a sys­tem sure seems to nev­er die no mat­ter how many stakes are put in it’s heart.

Com­mod­i­fy dis­eases for insur­ance rea­sons and start unions for ven­ture cap­i­tal­ists.

What next?