Member-Owned, Worker-Run: Black Star Brewery Taps Into a Radical Idea
Story by Stacy Edwards.
Austin’s Black Star Co-op Pub and Brewery is anything but typical. From its delightfully quirky menu options challenging your rational and irrational taste buds, to its community-owned and employee-run structure, this first of its kind brewpub is boldly redefining the co-operative movement. An establishment for those who toast to challenging the establishment, anyone can come and enjoy a perfectly crafted beer while collectively offering society an alternative approach to business—an idea Mark Wochner, the current President of the Board of Directors, and Black Star’s twenty-seven hundred members proudly support.
The Story of a Fully Self-Sufficient Brewery
The concept all started in December 2005, when Steven Yarak gathered with a group of people to discuss his idea of having a beer bar owned by regulars it serves. Luckily for us all, brewer Jeff Young and co-op expert, Johnny Livesay of the Wheatsville Co-op in Austin, TX, thought it was a good idea, too. Once Steven suggested they expand the idea into a brewpub, Johnny began ironing out the structure of the co-op to make the dream a reality. However, it’s Board President Mark who is now the man most accountable for the successes and failures of this idyllic space of communal drinkery.
Black Star existed on paper well before the brewery was established as a brick-and-mortar location. After spending several months organizing bylaws and brewpub’s management structure, the business incorporated in April 2006. It officially opened on September 21, 2010, after raising nearly $600,000 in initial capital from their membership, with an average investment of $3000. The funds were raised through $150 membership shares and $500 investment shares. Understandably, the process took a lot of time and required many beer socials to set up goodwill and build a presence in the community. [Note for aspiring entrepreneurs: if you want to raise money, give beer away for free, serving patrons in sippy cups. Concurrently, sell cups for $5. This is where the money is made].
Mark was a research scientist with the Applied Physics Department at the University of Texas at Austin before getting involved with the co-op. An avid participant in the craft beer scene, he soon recognized Black Star’s potential as a leader in the co-operative movement and its power to democratize the governance of business from every operational angle. “We’re all-in-one really. We’re a co-op, a brewery, and we’re worker self-managed,” says Mark. “We have all kinds of experiments going on.”
More Than Bragging Rights
Following the most basic principles of a co-operative business, the brewpub is owned and directed by its members and the people that it serves. All members own one share in the company and have equal voting power in the election of the Board of Directors. The Board sets the long-term goals of the co-op as it relates to larger end goals, or “Ends policies.” New member-owners can join for as little as $40, making payments over time to pay for a full membership share at $150. All member-owners have one vote in decision-making, but only Invested Members are granted the full benefits of membership. Once members have fully paid the $150 amount, they are automatically upgraded to full status and no longer pay dues or fees. As expected, members of the co-op must be 21 years old.
There is much more to membership at Black Star than proudly owning a piece of your neighborhood pub. Currently, benefits of membership include voting power in decisions, membership appreciation events, patronage refunds, “Beer with the Board” specials, free “Birthday” beer, and eligibility to join the University Federal Credit Union. As part of the co-op’s founding principles, membership is voluntary, democratically controlled and without obligations of active participation; all they have to do is give money and keep their information current. However, members are encouraged to serve their community and join with other co-operatives to spread the unique business model and philosophy.
Enter the Worker’s Assembly
Since members are not required to work at the brewery, Black Star has an all-paid, fair-waged staff. But this labor is self-governed, which is where things get really unique. “It means that the Board basically doesn’t hire a manager,” explains Mark. “In most every other situation, there’s something like a CEO or a general manager who is the lone voice for the Board.” In this more common co-operation management style, the Board only hires one employee, who then hires everyone else and deals with the lower-level operational details. “But with us, we don’t have that. We have a Worker’s Assembly who are basically self-governed. They make all the decisions themselves, collectively, in however way they want to do it. This is why I was telling you this is an experiment,” says Mark with an excited grin.
He admits that Black Star is not the first workers self-managed business; there is the food co-op, Peoples, in Portland and a whole group of similar start-ups in Austin spurred by the Third Coast Workers for Cooperations, an incubator of worker co-ops. Similar to Peoples, Black Star has a link or “liaison” between the Workers Assembly and the Board who does some of the job a manager would typically do. According to Mark, under this organization, the Board establishes Ends Policies and sets up Executive Limitations, which basically say, “While you’re doing these things, this is what you specifically can’t do. We (really) can’t tell you what you can do, because there’s an infinite number of things you can do.” However, policy governance allows the Board to set up general guidelines that they modify when certain situations come up.
Overcoming Challenges of the Rebellious System
The whole concept of Black Star is pretty radical, requiring a very brave community to sign on early. “The idea is so weird right?” Mark admits as he reflects on his early reaction to the idea. “I mean, we want to make a brewpub, but we’re not going to get big venture capital support. We’re not going to do it like that. We’re going to get it from all the people in the community and when there’s profit, it’s going to be distributed to all of our members. Everything is going to stay 100% local. We’re going to have a focus on being green, a focus on supporting the community, and by the way, we won’t have someone in charge.”
Not having a person in charge, while in line with their mission of being a completely community-organized experience, has undoubtedly created unique challenges. “For example, at Wheatsville, there is a general manager who manages the Facebook and Twitter accounts and basically represents all that stuff in an operational sense,” explains Mark. “But when you have a consumer guy like me representing all the members and you have a workers’ self-managed workforce that have more contact with the external communications part, it’s hard to keep things neat and tidy.” Internal communication can be a challenge, too, because even reporting to the Board becomes a communal thing where the head of each of the four teams—brewery, front of house, kitchen and business—reports to the Board. That coherence in communication is something the entire membership and Board at Black Star are continuously working on to improve, but Mark thankfully relies on role models like the People’s Co-op to guide the way.
Taking Ownership of a Dream
After being officially open for little less than a year, earnings are always surpassing net costs. Mark unashamedly predicts success for Black Star over the next three years and champions the oddity of the business and its origins. “That’s the great thing, right?” says Mark. “It was really only one person’s idea, maybe two or three depending how you look at it. But, he got so many people onboard with it. They lost their weekends working for this, but it wasn’t even that. Supporters felt something, bought into it and took ownership of someone else’s idea.
Stacy Edwards is a graduate student of non-profit and public administration, food blogger and uncontainable dreamer living in Austin, TX. While finishing her Masters in Public Administration remotely through New York University, Stacy works with Yelp's Austin Team to promote local businesses through online engagement. In her spare time, she plays soccer, takes too many pictures of food and theorizes the adoption of a puppy. She can be found at about.me/stacynedwards.
Photography by Amanda Green for Sheepless.