Alexis
Hi, everyone. Welcome to another episode of Data Dave Dives Deeper. I’m Alexis, your host of this podcast. I’m here today with Data Dave as well as a new friend, and I’m excited to talk about something kind of new today. So. Hey Dave, how are you doing today?
Data Dave
I’m very well, Alexis, how are you? I hope you had a good holiday.
Alexis
I did. I had a great holiday. I got a lot of relaxing in. I got a lot of napping in. I probably ate too much food if I’m being honest. Got to hang out with some dogs. I really enjoy that. Probably see my dog in the background right there. So, it was a good holiday.
But I’m excited to get this recording in. Today is my first time meeting our guest, Matt. So, really pumped to hear what we have to talk about.
Data Dave
Excellent. This is going to be an interesting session actually, because we have with us today Matt Martensen, who I met a little while ago and was introduced by another friend of ours, The Datanista -Cher [Fox]. And so, introducing Matt.
Matt is the founder of the User Cooperative, which is an interesting concept that I’m not actually going to introduce. I’m going to turn this over to Matt to introduce us to it, and then we’ll discuss it and talk about it from there.
Matt Martensen
All right, that sounds good. Well, Alexis, thank you. Dave, thank you for having me on the podcast. My name is Matt Martensen. I’m the founder of User Cooperative. Just to explain what it is, basically it’s a user-owned web browser startup that’s uniquely structured as a consumer cooperative. And the whole point of what we’re doing is to put tech power and profits into the people’s hands.
Alexis
Okay, I’m stopping you right away. Web browser, as in like… I use Microsoft Edge or Google Chrome, is that what you mean?
Matt Martensen
Exactly, yes. And so just kind of think of this as a user own version of Chrome that we’re building.
Data Dave
So, I’m going to lean into that a little. Why? Why do I as a user want to own my own copy of Chrome? Well, use one that is cooperatively owned or publicly owned. What’s the right term? What’s the right? What’s the right term that I would say?
Matt Martensen
Publicly owned is fine. I like “Owned by the people.”
So, we call ourselves the people’s tech startup. And the whole point of what we’re doing is that I have kind of identified through the course of my experience working in finance and in Silicon Valley, that data, the data that we transmit with virtually every click we make on Internet technology services is, in fact, capital. That represents the capital foundation for all the tech companies that we use. And in this market system that we’ve subscribed to for couple hundred years now, if you capitalize a business, you get to own it in exchange for doing so.
And so this kind of a user-owned model of a web browser, and if you think a little bit further down the road, for other technology services that we use every day, seems to be in effect making to market our use with respect to these tech companies.
So, in my opinion, as kind of an ex-corporate finance guy, shareholders in big technology companies have no market basis to own and control the tech companies that we use. We as consumers do.
Data Dave
I know Alexis is waiting to jump in as well. Let me ask another couple of questions on that, which is.. we’re going a step beyond open source, right? And publicly owned source code. We’re saying it’s not only the source that is publicly available, publicly owned, but the usage as well that is owned by the user.
Matt Martensen
Yeah, I would say that open source and this kind of people-owned, they can exist together. Open-source kind of refers to the software products themselves. For example, the browser that we’re going to be building is a Chromium browser which is open source. You know, it’s owned by Google. But you know, maybe reasonable minds can differ as to whether that’s truly open source if it’s controlled by Google, but nonetheless it is open source. But the ultimate ownership of User Cooperative is in the people’s hands as members.
Alexis
Okay, yeah, I do have to stop again.
So, my reference for a cooperative, a co-op is like farmer’s market. A whole bunch of people at a farmers market, they all kind of rent the space together, and they sell their cucumbers and their tomatoes and their smoothies and their homemade donuts… I like food If you didn’t catch that from my intro earlier. You’re doing a web browser co-op and so a whole bunch of people are coming together to own an open source browser. Is this correct? Am I making a correct statement?
Matt Martensen
Well, I would just, I would just say that it’s… people are coming together to own a browser that has some portion of its code that’s open source.
So, just think of it as people coming together to start a web browser business, and it’s ultimately a Chrome-like web browser. We’re not doing anything to alter what it means, the forms and functionality of the browser that you have become accustomed to and perhaps love. We’re just simply changing the ownership and control structure of the technology products.
Data Dave
Your basis is that the ownership is as much the usage pattern as it is the browser itself. Because the idea is more “My clickstream is what belongs to me,” not the code base of the browser. And it’s my clickstream and the data associated with my clickstream that actually has value. Which is why people like Google and Microsoft and others create these browsers. Because more often than not, they’re monetizing the data that they get from the browser more than they are the browser code itself. And so, your community, if I understand it correctly, is very broad in that you don’t have a limit on the amount of owners.
They’re not buying into this browser so much as by using it, they’re becoming part of the ownership community. Have I got that correct?
Matt Martensen
You have that exactly right.
Alexis
And then is the big picture that what we’re clicking, what is currently being monetized by Big Brother out there, won’t be monetized?
Data Dave
If I get this correctly, Alexis, what Matt is saying is that it will be monetized by you as part of the collective.
So, we’re moving the data ownership out from being collected by Big Brother to being democratized back to you as the user, and you own your own data stream. Have I got that right, Matt?
Matt Martensen
That’s right. It’s just simply a user-owned tech company that starts with a web browser like Chrome and the basis of ownership just with a regular cooperative… Alexis, you mentioned just like a grocery co-op, and I like to use REI as an example. I don’t know if you’re familiar with REI, but that’s a big cooperative, the biggest one in the United States. And actually, kind of the inspiration for me and how I structured User Cooperative.
But a consumer cooperative like REI or any of these grocery co-ops that you’re talking about is simply a customer owned business. And the way that this customer-owned business distributes its profits and control is on the basis of the purchases these customers have with the business. So, at the end of the year, the co-op makes a profit and then it distributes all that profit back to its customers in proportion to their purchases with the co-op.
And so, what we’re doing is we’re just altering that a little bit. We’re saying that through every click you make on a technology service, you are streaming information, you’re streaming capital to a company. But today you don’t get anything in exchange for doing that. All the shareholders of these companies are almost exclusively benefiting from the economics of your data from your clickstream to your attention.
You’re the data that you’re conveying. The Content that you’re creating on these platforms, you don’t get to retain any of it, you don’t get any of the economic benefits in exchange for doing that. And what I’m saying is that that’s wrong.
In our market system, you capitalize businesses, you get to own them. Therefore, let’s do a cooperative, let’s structure a tech company that’s user owned, that apportions all of its profits and control back to its users just to stay within our market system. So that’s the justification for that.
And you know, you kind of look at these tech companies, this is not something where it’s like, “Oh, we want to build a little co-op because we want to just like make a little margin on the side. Because this is going to be something, you know, we might make a dime or two over the course of 20 years of using this.” No, in the tech industry we’re talking about trillions and trillions of value that’s being generated from our attention, data, and the content we create on these services. And if you look a little bit further down the path here, we have generative AI that is also benefiting from all the content that we’re putting on the Internet.
All these companies are deriving the lion’s share, I would say substantially all their value from us as consumers. And it’s time for us to start capitalizing on these kinds of things, attention, data, and content.
But we have to start small. We have to start with one product and let’s go with a browser as something we can use. We use on a daily basis. Billions of people use that on a daily basis. Something we readily understand and something that we can easily switch to in a matter of clicks from one browser to another.
Data Dave
I think that’s absolutely fascinating because I think this is a potentially huge change that could happen in the tech industry. I mean, we saw a massive movement around open source, I alluded to that before, from perpetual licensing to open source to the distribution of the invention of Linux and various other things that essentially eliminated a lot of the profit and made it difficult for the likes of IBM, Microsoft, and others along the way. Now, they’ve worked out how to work within that construct as well, with IBM purchasing Red Hat and whatever else.
But it changed the industry dramatically with the upswing in open source. And this could potentially, in my mind, be another sort of massive change, massive revolution potentially, because what we’re saying is that the code, the commodity that we’re operating that’s on, is no longer owned and no longer the value stream. It’s actually, the data that is flowing through that window, if you like, that is the value stream. And that is no longer owned by the person who made the window. It is owned by the person looking through the window, which I think is a fascinating concept. And giving people the opportunity to take part in ownership in essentially what they’re viewing through the window.
Matt Martensen
Exactly. That is a heck of a way of putting it, by the way. That’s it. It’s as simple as that.
Data Dave
I honestly think that’s a fascinating concept. That’s why I thought this was so interesting, because the potential is huge. But it is a major mind shift for a lot of people.
Matt Martensen
Well, the idea of owning something, the idea of not having to be the product anymore with these tech services, the idea that you can become something more than a product on an Internet technology platform, that is a mind shift.
The idea of having a role, a voice in tech companies that are the stewards or not, I wouldn’t say stewards, but these massive databases, that’s effectively what tech companies are. They’re data companies. They are not tech companies, they’re data companies. All the technology, all the products that they are making are derivatives of that data that comes through every click, tap, type, swipe you make on the Internet. And all we’re saying here is, “Wait a second, why are shareholders benefiting from this? Why don’t we get credit for this for once? Why can’t we capitalize on our clicks on the Internet?” We did that.
Data Dave
It’s heading down the same path… So I read an article a little while ago, but I can’t remember which airline it was now…
But the airline, because you’re a passenger, you’re a captive audience. So now, the airline is starting to sell advertising space to their suppliers because they’re not making enough money in tickets anymore. So, now they’re selling you as a passenger to companies so that they can advertise to you through the back of the seat, because you are a captive audience while you’re sitting in that airplane seat.
It’s again taking this to another step, which is, “What are you selling?” You’re selling the captive audience. You are no longer the passenger, the customer of the airline, you’re the product of the airline. But as a passenger, they are selling to these advertisers, whether we’re comfortable with that or not.
This is the world we’re living in. This is the world we’re moving in. So, as we explore this, suddenly, as a passenger, as a person using the Internet, I become a product in my own space because the website is what I’m using. So, I am the product, as the audience of this website. They want to talk to me, they want to do whatever. And you’re taking a little bit further and saying, “Okay, as an individual, as a product, as a product, as being part of the audience, I should be participating in that value stream. As the end viewer of that, I should be part of that value stream.” And I think that’s absolutely fascinating, and I think it’s a really interesting direction to go in.
Matt Martensen
Well, and look, I mean, it’s like we are the products. Every click, the clicks that we make on these advertisements, the impressions, the clicks that we make with these advertisements, those are the revenue generating events. And in many cases, especially on the Internet, these advertisements are informed by your information, your online activity.
So again, going back to who is ultimately capitalizing these businesses, it’s us, the consumer, we the consumers, are capitalizing technology businesses that are trillions of dollars of value and could go into the quadrillions one day If you consider AI. Why the heck aren’t we participating in the equity of these companies? And so that’s the question. That is the ultimate question. No one has attempted to really distribute or democratize a tech company ever. And that’s what we’re doing. We are quite literally putting tech power and profits into the people’s hands using a consumer cooperative structure. And we start with the web browser.
Alexis
I want to stop there for a minute. You want to start with the web browser. You keep saying that. Where do you envision User Cooperative headed? Like, where are you heading? Starting with a web browser. But what’s step two? What’s step ten? What’s Matt’s dream?
Matt Martensen
What an outstanding question. Thank you very much. Well, look, I mean the way I, I have, the way I kind of look at this is that I’m a member just like everyone else. So a cooperative is a member-owned business. We don’t have shareholders. I’m a member. And everyone who joins User Cooperative becomes a member as well and is entitled to the same economic rights that I have and the same voting rights that I have. And so, I can have a vision for the company. But ultimately, it’s the members who decide what the company does democratically. But my vision for the company, I have really no limit to my ambition for the people when it comes to a tech company that is wholly owned and controlled by them. And I say, let’s take over the tech industry.
Alexis
Taking it over, that’s Matt’s dream.
Matt Martensen
That is, that is my dream for people. Because if you look at the big technology companies, just take a look at the… What do they call it The Magnificent Five or whatever. You got Amazon, Apple, Alphabet, Meta, Microsoft. But you have those big companies right there and those amount today to about 12 to 15 trillion dollars in market capitalization. And you know, you just take those services. They got started for the most part with a consumer product, and it’s the consumer product that enabled them to capture the data streams from people so they can go on to monetize them with say, like their targeted ad systems.
Like in the case of most of those. Some companies are more sensitive about privacy, at least they claim to be, than others. Some are more business oriented. But ultimately these companies got big because they started with the consumer, and then they graduated into business-to-business products like a targeted ads platform.
So, I see us taking the same kind of thing. We’re not trying to reinvent any wheels here. It’s so absurdly simple to me. We’re just going with the web browser. It’s definitely traditional, it’s familiar. We’re not like saying, “Oh, we got all these cool bells and whistles on this browser.” No, it’s the way I like it. I’m just doing this because I don’t want to change my browsing habits, just change what the economics are of Internet use. And I’ll keep the forms and functions of the browser the same, thank you very much.
And then through a browser, you monetize the browser in a couple of ways. You can sell the search bar, real estate up top, and you can put targeted ads in the browser itself. So, you can turn the browser itself into a multi-billion dollar per year business and then use that income to pay some profits back to the users, reinvest, invest in some other tech services, maybe a search engine, maybe something else.
Data Dave
Maybe a social media platform that is actually owned by society, right? Owned by the users that are members of it. And it becomes… you’re no longer turning over ownership of your images and so on to Meta or Google or whatever. You actually own a portion of yours and a portion of everybody else’s as well as a user of that platform. And most people don’t know what the ownership constructs are when they’re turning over their content to some of these providers.
So, I actually think that’s where this starts to get really interesting. Start with the browser. Great. It’s a great window into the world that people use. But it could be if you’re successful, then the sky’s the limit because you go down the path of Google or the path of Red Hat, the path of Linux, the path of a number of things, which is what is the next window that you want to open and is trafficking data that should be owned by the person who is the generator of that data.
Matt Martensen
That’s right. And it just starts with a simple premise that your data is capital that represents a portion of the foundation that these businesses are built on. You can take that view that your data is capital, or you can take the view that your data is just some basic commodity or exhaust, which is what these tech companies would like for you to think.
Data Dave
Yeah, I don’t believe it’s exhaust. I’m going to give another analogy. It’s similar to a phone. So, AT&T and a lot of the phone services, they’ve completely commoditized the phone because the phone costs way more than you think it does. Way more than you reason. Way more than you’re exposed to to produce. But what they want is the traffic. They want you to make your calls, send your text, take the pictures with their phone. The phone is just the commodity. The phone is the window into the world. The world is communication and data.
Matt Martensen
There you go. And that’s exactly how these tech products are. And these products evolve or they are improved through our use as well, even more so than the phone. But I appreciate the example. I think that’s really quite perfect.
So that’s the, that’s what we’re dealing with here. All the products that we’re using today, the search engines, the social medias, all the other stuff, it’s all informed, like they’re useful to us because of our use of them. All of the information, all the preferences that we’re communicating through our use of these products are being reintegrated into the products through new features and new products themselves. It’s like we are capitalizing these businesses. There is no reason, there’s no reason we shouldn’t start getting our cut and taking our stake in this tech industry.
And just to go back to one other comment here, Alexis, going back to what’s the vision here really? I don’t bill User Cooperative as a web browser company. We are a tech company, a general tech company that starts with a browser. Because I don’t want to give off the impression when you’re trying to tell a story of ownership to a consumer, you know, we’re talking about upside. We have to sell the dream. We have to say, “No, we’re not going to resign ourselves to being just one little product and you know, we’ll make $5 a year for decades to come.” That’s not compelling. It’s like what is the C-change that’s happening? What is that revolution? What are we trying to do that benefits people? And we don’t want to be coy or modest about it. We need to tell a spectacular equity story, because that’s the story we’re telling.
You talk to a venture capitalist when you’re trying to raise money from someone, you’re trying to build a business, you get people on board because you say the upside is enormous. We have to do the same with consumers, which is why web browser? Cool. We’re going to start there, but our ambitions are… They’re pretty big.
Alexis
That’s exactly the question. Yeah that was exactly what I was thinking. I was like, first of all, I think a web browser is really cool. Like, all of the things aside, first of all, I just think that’s cool. But, like, I knew there had to be more to that. I knew you were headed somewhere else. And so I was like, “I want to hear it. I want to know what the big picture is here.” And so it’s super cool hearing you say, like, “I want to take down the giants. I want to give it a try.” Like, what’s the worst that can happen? You do take down a giant? Why not try?
Matt Martensen
Yeah, exactly. Well, you know you get killed taking down giants. But what I personally really love about this is that the success of user cooperative is predicated on people coming together saying, “No, my data is capital. No, I don’t want to be the product. No, I’d like to have a vote on how my privacy is determined. No, I really don’t feel like accepting arbitrary changes to terms and conditions.” You know, all the things, I don’t want to make this seem like it’s some kind of panacea, but it kind of is. I think that a User Cooperative happens to solve a lot of the problems that we’ve identified with the Internet.
Data Dave
Yeah.
Matt Martensen
And, yeah, it’s tech power and profits the people.
Data Dave
Yeah, exactly. It starts to bring the user back into it, and it starts to have significant changes. When you put it that way, and you start to say, “If value is based in knowledge, how much knowledge is transferred through a web browser every single day from just me learning, looking up something and reading it?” That’s knowledge transfer. There’s value in knowledge transfer. That’s what makes the world go round more than anything else. That knowledge, that understanding, that transfer of information from one person to another. And that is tremendous. And to start to say, “We’re going to put value back into the transfer, whether it’s me using it, me giving it, me reading it, whatever. The value of me having that knowledge is valuable to somebody, it’s valuable to me, and I should be participating in that value.” And I think that’s a really valuable idea that can go way beyond a web browser if we get it right and if we can get the right people involved and the right passion behind it. And I think your passion is fabulous.
Alexis
Before we wrap up, if our listeners want to learn more about User Cooperative, where should they go to find out more?
Matt Martensen
They should go… First, I thank you for your interest. Then, I’d advise you to go to usercooperative.com and check us out.
Alexis
Perfect. And then, I know if you’re watching us on LinkedIn or if you’ve gotten here from LinkedIn, we’re gonna tag Matt and his company in our post. So, definitely check it out there.
Matt, this has been an awesome conversation. I think Dave said it perfectly earlier when he said you’ve got a lot of passion about this, and you definitely do. I’ve said it before. I’ll say it again, I’m sure. I love listening to people who have passion. I don’t care what you’re talking about. You can be talking about the mating rituals of frogs. I am excited to listen to people who are passionate about something they’re talking about. So, it’s been awesome having this conversation today.
Data Dave
One last question before I let Alexis hang us up.
Alexis
I already tried to. Dave, come on.
Data Dave
I know. That’s why I interrupted you. When? When can we expect to see something out of User Cooperative?
Matt Martensen
Well, and we’re doing stuff now.
Okay, so if you’re asking specifically about a browser or just any kind of something of value, I’ll tell you that we have a website. We have real estate on the Internet. We have a website whose sole purpose is to onboard new members and to accept voluntary financial contributions so we can meet our initial capital requirements so that we can go on to provide our services, starting with a web browser. And the timing of the web browser is really going to be a function of how fast we can build our membership. As a cooperative, we start a little bit different than a traditional company where you get a bunch of investors together, for example, that contribute capital so that they can go on and do their thing. We have to start with a consumer. We start with members. We start with contributions from members. It’s a crowdfunding thing. And then we go on to provide our service.
Data Dave
So, your call to action is, “Act now. Come to usercooperative.com and become a member.”
Matt Martensen
Yes, simply put, if you are tired of being the product on the Internet technology platforms you use. If you’re tired of not getting fair value in exchange for the data that you’re contributing to these platforms along with your attention and the content you create. If you’re looking for a change in those departments, then go to usercooperative.com, become a member, and if you can, chip in a few bucks to help us with our startup costs. That’s how I’d phrase that.
Data Dave
Excellent. Fabulous. Shameless plug. Back to you Alexis.
Matt Martensen
That’s what we need.
Alexis
I love ending a podcast with a shameless plug.
I’m going to give a big shout out to Cher Fox, the Datanitsa. She’s the one who sent you to us to have you join us for the podcast. Thanks Cher. Awesome recommendation.
Matt. Thank you for your time today. This has been super fun listening to everything that you guys are working on over at User Cooperative. Good luck with your investments or with your memberships. We’ll call it that instead. And super excited to see where this heads.
Data Dave
Yes, absolutely. Thank you.
Matt Martensen
Thank you for having me.
