In 1956, a Catholic priest named José María Arizmendiarrieta helped five young engineers start a small cooperative factory in the Basque region of Spain. The town was called Mondragon.
Today, Mondragon Corporation has over $12 billion in annual revenue, employs 80,000 people, and operates in 150 countries. It's the world's largest worker-owned cooperative — proof that the cooperative model can scale without losing its soul.
When people ask me about Thios's business structure, I tell them: "We're trying to be more like Mondragon."
Why Structure Matters
Most people don't think much about corporate structure. A company is a company, right?
Wrong. Structure shapes behavior. The legal framework of an organization determines who benefits from its success, who makes decisions, and what happens when the money starts flowing.
Traditional corporation: Shareholders own the company. Their goal is return on investment. Employees are costs to be minimized. Decisions optimize for shareholder value.
Startup with VC funding: Same as above, but with a ticking clock. VCs expect 10x returns within 7-10 years. This creates pressure for growth at all costs, often at the expense of sustainability.
Non-profit: Mission-driven, but constrained. Can't raise capital easily. Can't compensate contributors competitively. Often depends on grants that come with strings attached.
Cooperative: Members own the company. Members can be workers, customers, or both. Decisions are democratic. Profits are distributed to members or reinvested in the mission.
Each structure produces different outcomes, even with identical products and markets.
What Mondragon Got Right
The Mondragon cooperatives have survived for almost 70 years while growing to massive scale. What makes them work?
Principle 1: Democratic Organization
Each cooperative operates on one member, one vote. Not one dollar, one vote — one member, one vote.
This sounds idealistic until you see it in practice. When workers have real voting power, they make different decisions than outside shareholders would:
- They invest in working conditions, not just productivity
- They balance short-term profits against long-term sustainability
- They maintain jobs in their community rather than offshoring for savings
Democracy isn't just ethical — it produces better long-term decisions because the decision-makers live with the consequences.
Principle 2: Pay Solidarity
Mondragon cooperatives limit the ratio between the highest and lowest paid workers. Traditionally, this was 3:1 to 6:1. Even today, the ratio rarely exceeds 9:1.
Compare to typical US corporations, where CEO-to-worker pay ratios average 300:1 to 400:1.
Why does this matter? When leaders' compensation is tied to frontline workers' compensation, they have skin in the game. They can't squeeze workers to boost their own bonuses.
Principle 3: Capital as Subordinate
In most companies, capital is king. Shareholders have ultimate authority.
Mondragon inverts this. Capital serves labor, not the other way around. The cooperatives have their own bank, their own social security system, and internal funds that recycle profits into new ventures.
Principle 4: Inter-Cooperation
Individual Mondragon cooperatives are part of a larger federation. They share resources, knowledge, and risk. When one cooperative struggles, others provide support.
The 2008 financial crisis hit Spain hard — unemployment reached 26%. Mondragon cooperatives reduced hours and pay rather than laying off workers, then recovered together when the economy improved.
Why Thios is a Cooperative
When I was planning Thios, I had options. I chose cooperative because the structure matches what I'm trying to accomplish.
Alignment of Interests
The people who use Thiosphere designs are the same people who should benefit from their success. In a cooperative structure, builders who contribute improvements become member-owners. Their contributions increase the value of something they partly own.
Long-Term Thinking
VCs want exits. Public shareholders want quarterly growth. Cooperatives want to exist for the next generation. The Thiosphere is a long-term project that needs decades of iteration.
Resilience
In a cooperative, the members continue even if I disappear. The structure survives individuals.
Values Expression
Cooperative structure expresses values I believe in: people over capital, democracy over hierarchy, community over competition.
What This Means for You
If you buy a handbook, join the community, or build a Thiosphere, here's what cooperative structure means:
You Can Become a Member: Builders who contribute significantly can become member-owners with voting rights and share in distributions.
Decisions Are Transparent: Major decisions happen openly. Members can participate. Non-members can observe.
Profits Serve the Mission: No extractive exit is planned. Profits go to operations, development, member distributions, and reserves.
Community Is Real: Members are stakeholders with formal rights, not just customers.
The Challenges
I want to be honest about the difficulties:
- Slower Decision-Making: Democracy takes longer than autocracy
- Legal Complexity: Cooperative law varies and requires specialized help
- Funding Limitations: VCs don't invest in cooperatives
- Cultural Unfamiliarity: Most people don't know what cooperatives are
We've chosen slower growth with aligned capital over fast growth with misaligned capital.
The Invitation
Thios isn't a typical company. We're trying to build something that lasts, structured for impact rather than extraction.
Mondragon proved it can work at scale. We're adapting their principles for open-source hardware in the 2020s.
Build for impact, not just exits.