An Example Pricing model for a Data Cooperative

Published on December 5th, 2022 18:32

As Moore's Law slows, the opportunities for fast movers to leverage computational price reductions to create market advantages also slows. The strategies and tactics of that computation-oriented organizations who rely on computers being forever cheaper and more powerful are shifting. Loss leadership, which may have been good business 10 years ago, is no longer as viable of a pathway to a profitable, sustainable organization that benefits its labor, consumer, and capital stakeholders.

Instead, labor and consumer stakeholders may want to consider finding transparent, mutualistic pricing models to subsidize access to computational resources and innovation in digital technologies.

Consider the following economic model:

  1. A group of 500 members each pay $50/yr (or $5/mo, 1hr of minimum wage labor) to their Data Cooperative.
  2. On the first of the month, the Data Cooperative accrues $2,083 as income from their Member Dues.
  3. Then, the monthly bill for compute comes in at $300 and data storage + transfer comes in at $200.
  4. This leaves $1,683 for Moderation and Support, Research and Development, Governance and Operations, and Savings.
  5. Consider billing Members who used above-share compute/data pay a 100% markup on their overages (Optional) a. The Data Cooperative records the per-domain compute-seconds for web and worker processes, as well as sum of bits stored and transferred. b. In our 500 member cooperative, the equal-share of compute-time, storage space, and transfer bandwidth would be .2% of the whole. c. A member whose domains used .4% of compute time and 1% of storage/transfer would be billed for .4% of the compute bill ($1.20) and .8% of the Storage/Transfer ($1.60).

As you can see, 500 people at $5/mo is insufficient to pay a single person a living wage. Support and Moderation is best split among 3~4 people. To be sustainable within a currency based economy, Data Cooperatives will likely need to augment their prices, perhaps through:

  1. Progressive membership fee structures where higher-income or higher-wealth members subsidize moderator and maintainer labor.
  2. Segmenting available Programs based upon Membership Types. For example, a Dental Services Member may pay additional fees to gain access to programs that serve the Dental Services niche directly.
  3. Selling Licenses to particular Programs or Content
  4. Raising funding via sponsorships, donations, grants
  5. Subsidies from a regional tax authority or other topical or regional network.

If you found this interesting or have thoughts, I'd love to hear from you on @[email protected]. Tell me all about how you would price your data cooperative!