Ampled offers an equitable alternative to music subscription services. It is a platform that allows artists to be directly supported by their community without intermediaries or gatekeepers. They are rooted in transparency and ethics, while being 100% democratically governed and owned by artist, workers, and the community.
July 4, 2020
Please share what inspired the transition from investor owned to artist, worker, and community ownership?
We initially incorporated as a public benefit corporation with a loosely baked idea that we would want to have distributed ownership in some kind of mutual way but we weren’t sure how to do that. Basically none of us had ever been a member of a cooperative and weren’t very familiar with cooperative models but we did really like the idea of distributed ownership, we just had not yet landed on a cooperative as the best way to do that.
We initially looked at all sorts of ways to share ownership of a corporation: restricted stock units, stock grants, different ways to give ownership to the company. What we found is that it’s very difficult to do that from a regulatory and an administrative standpoint. In the context of a platform where users are not employees, it’s very difficult to give ownership within a traditional corporate structure. The more we explored and researched closely, we realized that it makes total sense for us to be a co-op and have ownership where each member has one share. We were rethinking a lot of the initial assumptions that are baked into early stage tech companies like our goal of not allowing the company to be sold or go public.
We want to create something with ongoing use case value and knowing that we have to find ways to fundraise in a unique way that doesn't give inventors any ownership or control. A co-op was something that we didn’t anticipate but through research found that it was the best way to do what we wanted to do which was create something of value that shared wealth, broad based ownership, and democratic governance.
How is Ampled gaining financial capital and how is the wealth distributed amongst owners?
We partnered with CUNY Law School to develop our own investment terms which use debt instruments or revenue based financing. It’s effectively revenue share loans where in exchange for an investment Ampled will set aside a very small percentage of top line revenue (less than 1 percent) to repay back those investors until they reach a cap return of 3x. After it is repaid the obligation is over, there’s no ownership that has changed hands and there’s no outside control that has been given to any investor. There are no investors on the board, they are all elected representatives.
I think the way that we’ve been able to grow is actually not primarily through financial investment, it’s through human capital. We are now pushing up to twenty regular contributors that are helping to build and grow Ampled. Our idea is that we are trying to find creative ways to structure labor as an investment. Instead of selling ownership to raise money to pay labor, we are all pitching in as co-owners helping to build and grow the platform. We have six developers working with us, designers, project managers, community support, people in artist facing roles, and doing content strategy. Many of those people have backgrounds at companies like Kickstarter, Patreon, and Spotify. I think that for us the question about how to grow has been less about how to raise money and more about how to raise people. Focus on organization instead of fundraising, primarily we are built on human capital instead of financial capital.
It’s not just profit sharing, I feel like we might come up with a solution for repaying contributors as time goes on through a revenue share. We are thinking about setting a percentage aside of whatever the co-op has in net revenues after artist support for some kind of contributor trust. It could gradually pay back the contributors for the time that they put in. There’s no precedence that we found that is exactly like what we’re doing. We are trying to build a system that works for us and that also does not give any outside ownership or control to any one person. This idea of a contributor trust is something that we are exploring which would be similar to a pension or a certain amount of the revenue can pay back contributors based on how much they contributed. It’s kind of like labor is invested as a debt investment.
Dividends based on profits split between members
What void are you filling in the music industry and the sharing economy?
I would say that there’s a void in tech for sure. I feel like a lot of developers working in tech who are in VC funded environments are a little bit frustrated with the somewhat arbitrary prioritization of growth at all cost. At VC funded startups there’s also a bit of a malaise of working on things that people feel like don’t matter or that it’s not something that aligns with their value set. I think there’s also a frustration with not having a seat at the table, not having a voice in the broader strategy of an organization. The persona of Ampled contributors is someone that wants to work on something they care about, have agency and ownership over what they do, and know that it will make an impact to build a sustainable, healthy, and more equitable alternative.
It's kind of no secret that artists have been consistently hosed over time. There’s a bit of fatigue with platforms serving shareholders more than artists, changing hands and owners. There’s a growing awareness that artists are building all of this value and it's being extracted from them so I think that kind of frustration with an asymmetry of value capture is what is drawing artists to Ampled.
Minimum amount to support an artist on Ampled
How does Ampled differ from other membership platforms that provide artist support through subscriptions?
To answer that question would be on a case by case basis. I think obviously one of the core differences is that artists own the platform, Ampled is owned by artists and workers. It’s not the only difference but it has implications on pretty much everything else. It affects how we make decisions, governance, share of profits, prioritization of features, and what the goals of the organization are. Ownership is the crux of what makes us different but it really touches every facet of what we do.
With artists, workers, and the community as members of Ample, how are decisions made?
We have an elective board of representatives which makes higher level decisions and some of this is TBD. I guess it’s probably important to be transparent about some things that we just haven't figured out yet. It is an iterative process so one other thing that we are looking to clarify a bit more is the decision making process. So much of what we’ve done so far is kind of a loosely defined rough consensus. We check with members and see if we want to do something by asking but as we grow we are in the process of looking to codify some of the decision making process and practices a bit more.
Democratic governance structure
In what ways does Ample honor transparency on the platform?
What does the future look like for Ampled?
We just opened up the platform for artists to join on April 28th so we will be getting more artist on board. We will continue to build the platform for our contributors base and have a growing engaged community that is making life changing income and feels empowered to have a say in a platform that they rely on. Check back in a year.
What is the greatest challenge of nurturing an artist cooperative?
Bringing all of the voices to the table, making sure that everyone can drive decision-making in a meaningful and strategic way. We started this with a handful of people, it has progressively grown over time and since then it has been a process of flattening hierarchy in the organization progressively over time.
What is the greatest benefit of nurturing an artist cooperative?
I don’t know how to answer that question, we will see.
Knowing what you know now, what advice would you have given yourself when you first started developing the cooperative?
I would’ve told myself that it’s going to take way more time than we thought. It takes time to bake a turkey, you can't just throw together a bunch of people, it really has to take time to build something that is collaborative, with people at its center. We’ve taken extra time to make sure that Ampled doesn't have assumptions or biases of a small group of people built into it. Building in feedback loops to help kind of check some implicit biases of how it’s built all takes time.