‘Marxist’ businesses becoming a trend?

[FlorianR]

Hi y’all. I recently encountered a business owner on Tiktok who claimed they run a business according to Marxist principles.

- They went from 0-mid 6 figures in revenue in 1 year and have 8 employees

- all employees get paid the same no matter their job including the owner (wage + rev share) which means as the business grows they get paid more

- all employees have ownership in the company. If the company sells all employees get a cut if the sale according to their ownership %

- many decisions are made collectively and not solely by the CEO.

They’re registering to become a worker co-op.

She also claims she’s never had any problems with hiring and all her employees seem to have boosted morale.

There seems to be a growing trend in these types of businesses popping up. What do you guys think?

Could these kinds of business models eventually outcompete the traditional ways of running a business? Want to have an interesting discussion about this.

 

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[woken]

Could these kinds of business models eventually outcompete the traditional ways of running a business?

Only if you remove the human factor and you’ve got robots doing all the work in your coffee shop. ( example) basically the less people the merrier.

UK Retailer Sainsbury’s has over 100K employees.
How would a revenue share work out for them?.
It would take 2 years just to approve something.

Sure, the trend is growing mainly among families, but I don’t see that outcompeting anything anytime soon.

 

[Fox]

Hi y’all. I recently encountered a business owner on Tiktok who claimed they run a business according to Marxist principles.

- They went from 0-mid 6 figures in revenue in 1 year and have 8 employees

- all employees get paid the same no matter their job including the owner (wage + rev share) which means as the business grows they get paid more

- all employees have ownership in the company. If the company sells all employees get a cut if the sale according to their ownership %

- many decisions are made collectively and not solely by the CEO.

They’re registering to become a worker co-op.

She also claims she’s never had any problems with hiring and all her employees seem to have boosted morale.

There seems to be a growing trend in these types of businesses popping up. What do you guys think?

Could these kinds of business models eventually outcompete the traditional ways of running a business? Want to have an interesting discussion about this.

It won't work, or at least you will be nowhere near as good as you could have been.

The short answer is you will be inefficient compared to the rest of your market.

You will be overpaying for the basic tasks lots of people can do and underpaying the key positions that need top talent.

This means you are losing resources in basic areas and losing results in key areas.

Here is someone who tried it before...

CEO Secrets: 'We tried paying everyone the same salary. It failed'

As part of the CEO Secrets series, Calvin Benton discusses his firm Spill's "open" salary policy.

www.bbc.com

She also claims she’s never had any problems with hiring and all her employees seem to have boosted morale.

In a job interview, people are unlikely to say this is an issue - but the top talent will politely bow out and go elsewhere.

 

[Guyfieri5]

I would be interested to see how well that kind of company makes decisions. A knowledgeable CEO with professional advisors vs what the janitor thinks.

 

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[Kevin88660]

Hi y’all. I recently encountered a business owner on Tiktok who claimed they run a business according to Marxist principles.

- They went from 0-mid 6 figures in revenue in 1 year and have 8 employees

- all employees get paid the same no matter their job including the owner (wage + rev share) which means as the business grows they get paid more

- all employees have ownership in the company. If the company sells all employees get a cut if the sale according to their ownership %

- many decisions are made collectively and not solely by the CEO.

They’re registering to become a worker co-op.

She also claims she’s never had any problems with hiring and all her employees seem to have boosted morale.

There seems to be a growing trend in these types of businesses popping up. What do you guys think?

Could these kinds of business models eventually outcompete the traditional ways of running a business? Want to have an interesting discussion about this.

It is just co-ownership. Nothing too new.

They can do it with 8 owners. But it cannot grow.

They can always get around and cheat the rules by "outsourcing" or hiring freelancer.

 

[RaceDriver]

Hi y’all. I recently encountered a business owner on Tiktok who claimed they run a business according to Marxist principles.

- They went from 0-mid 6 figures in revenue in 1 year and have 8 employees

- all employees get paid the same no matter their job including the owner (wage + rev share) which means as the business grows they get paid more

- all employees have ownership in the company. If the company sells all employees get a cut if the sale according to their ownership %

- many decisions are made collectively and not solely by the CEO.

They’re registering to become a worker co-op.

She also claims she’s never had any problems with hiring and all her employees seem to have boosted morale.

There seems to be a growing trend in these types of businesses popping up. What do you guys think?

Could these kinds of business models eventually outcompete the traditional ways of running a business? Want to have an interesting discussion about this.

No, it will not out-compete a more value-based approach to business.

I am all about shared equity - I founded an ESOP years ago, and I am part of one now. There are advantages to employee ownership that go far beyond the "feel-good" populist nonsense that Marxists will try to sell you on.

HOWEVER:

The simple fact is that different people contribute different things to any organization, and businesses are no different than any other. Those contributions create a finite, measurable amount of value that the customer is willing to pay for, and compensation MUST reflect and be based upon that value-add.

Why must it reflect this value-add?

1) Because someone whose contribution is being under-compensated will be recruited away and hired by an organization that will pay them what they are worth. Don't believe me? Start paying a team of senior electrical engineers $65K/year and see how long they stay around.

2) Because someone whose contribution is being over-compensated will either increase your price and make you uncompetitive, or will reduce your earnings and leave you with less to reinvest and grow the business that your competition. Don't believe me? Think about this: If your local pizza place decided to start paying their delivery drivers $65K/year, how much would that pizza cost when you receive it? Would you as a customer be willing to pay that premium, when the other delivery places in town charge half as much? Is that delivery driver creating enough value to justify $65K to the customer? How many pizzas would he/she have to deliver to justify that sort of pay package?

Now, do we want to find ways to keep all of our employees engaged as part of the business, and share in its successes and shortcomings? Absolutely! The idea, though, that every employee's contribution merits equal compensation is simply nonsense.

The moment that you lose sight of the value that the customer is willing pay for is the moment that you start losing your business.

 

[K1 Lambo]

W

Hi y’all. I recently encountered a business owner on Tiktok who claimed they run a business according to Marxist principles.

- They went from 0-mid 6 figures in revenue in 1 year and have 8 employees

- all employees get paid the same no matter their job including the owner (wage + rev share) which means as the business grows they get paid more

- all employees have ownership in the company. If the company sells all employees get a cut if the sale according to their ownership %

- many decisions are made collectively and not solely by the CEO.

They’re registering to become a worker co-op.

She also claims she’s never had any problems with hiring and all her employees seem to have boosted morale.

There seems to be a growing trend in these types of businesses popping up. What do you guys think?

Could these kinds of business models eventually outcompete the traditional ways of running a business? Want to have an interesting discussion about this.

That's actually an interesting topic. I'm not saying this couldn't work out(in some cases it could benefit both parties) but for sustainability and positive growth then not really.

Would you pay a random college basketball player the same as LeBron? Hell no. LeBron has proven himself to be a top 1, top 2 NBA player for the last decade or so. He DESERVES that pay. Even though a lot of social justice warriors will say: "How can a player who plays ball for a living make $50m a year or "Why aren't women in WNBA earning nearly as much as men"?

Well because that's how much he's worth to the market. Same case with other great NBA players like Kevin Durant, Kobe Bryant(rest in peace), Shaq, Michael Jordan etc. The NBA is as great as it is because of these superstars; they attract millions of people around the world each year. Not to mention these superstars also have a huge influence of fans around the globe which means they get endorsements all the time. Company owners know that and they're willing to give them huge checks for that too.

There's also inequality in terms of pay in Porn. Women get paid WAY more than men. Why? Because women are the main actors, people who watch porn are 70-75% guys. Do you think they'd rather jerk off to some naked guy? Most men(heterosexual men) watch porn because of women.

You get paid for your results. People don't care how hard you work or your 11pm-12am workouts, or that your dad died because of cancer and you've been in crippling depression for 5 years now. People want what they want. And guess what? People or the consumers recognize quality. Especially nowadays. There's not as much as competition as it was 20-30 years ago at the middle-top.

If you're hiring freelancers, then the pay structure is gonna be relatively similar with exceptions of course ranging from 1-2%. That's when it would make sense to pay them equally in most cases. You're paying them to get the job done.

I live in a socialistic country myself where feminism and egalitarianism is quite prevalent to a big degree and this whole left movement with "women are the same as men or they have the same biology as men" type of bs. Jordan Peterson is a great source for that, where he destroys feminists all the time with his classic arguments.

We also have something called "Janteloven" which means; "You shouldn't think you're better than us, you shouldn't think you're smarter than us, you shouldn't think you are someone". I'm actually agains that. If you believe you're great and you're someone who executes everyday then do it! Belief is the first part to greatness. You got to believe you can do it.

 

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[Guest-5ty5s4]

Could these kinds of business models eventually outcompete the traditional ways of running a business? Want to have an interesting discussion about this.

No, but if you want to try, go crazy...

Just be prepared for when nobody can agree on the most important decisions in the company.

You always need to have a leader.

Isn't it amazing that in a capitalist country, you can start a communist organization? But in an actual communist country, try operating as a "capitalist."