Building on Open Business as Entrepreneurs Lifecycle Management
This is building here.
I think it is possible to create knowledge bases of ways that people can accomplish things by “doing less with more”, for one.
I theorize that invest would be more willing to fund alliances of micro-enterprises if those micro-enterprises were able to show they can compete with, or outcompete traditional companies (and I believe that they will be able to).
I also think that alliances of micro-enteprises will ultimately be better positioned to take advantage of open knowledge/co-created knowledge commons, open source software, open design, and commons-based licenses. I think that alliances of micro-enterprises will eventually increasinlgy be able to out-innovate and out-perform current corporate institutions.
Example: I could create a site online that invites people to suggest and discuss something that they would like to see created, like a new type of software product, or a new type of service. Micro-entreprenuers could work right on the site (perhaps a wiki or something similar) with the enthusiasts. Then, people could bid to fund the projects, and micro-entreprenuers, or alliances of them, could bid to create or administer the project. The whole project creation knowledge base could be open. And, the project proposer could specify that they even want the design or content of the product to be open (instead of patent, copyright, or closed license).
In this system, you have a whole process that stands apart from the traditional way that people solve problems through business. You have an easy to access way for people to lay out visions, and make rules up front about how they are used. You also have an easy way for individuals, small groups, and whole communities to make a constantly growing shared knowledge base. And, you have a way that people can raise capital. You have a way for people without a lot of capital to participate in directly investing in whatever they want to. And, because they can invest small amounts, you have way for small investors to spread their risk.
Another project proposer could be a company IBM, deciding to use the system to outsource more traditional work. The system would be open to micro-enterprises, traditional companies, volunteers who want to work on open projects, etc
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The above is by Sam Rose http://socialsynergy.typepad.com
This is exactly what I have been thinking about.
Most of what you describe has been implemented by Cambrian House -
http://www.cambrianhouse.com/
I am unsure about their ownership terms though and left a question to that effect on their forum –
http://www.cambrianhouse.com/forums/view/thread/133/#post-872
My question has so far gone 3 days and 18 hours without a response from Cambrian House.
My impression is that CH isn’t quite what we’re after – they’ve got some of the right ideas, but are still closed business. We can learn from what they’re doing right, what they’re doing wrong, and build an Open Business version that will be better.
Here are the flaws I see in Cambrian House:
– They’re a closed business. What are they doing today? What are they planning for tomorrow? Who are they talking to? How is the money being spent, and where is it coming from? I don’t know the answers to any of these questions, and that undercuts my ability to trust them.
All of this I believe should be open and posted daily on a blog/forum/wiki. It’s not just the right thing to do (accounting for cash flow should make lobbying government a thing of the past, and get government working for the people again), but it’s also entertaining content that draws people in.
– CH takes ownership (according to their FAQ). I wouldn’t have a problem with CH taking “royalty points” (they’re way of divying up profits) for the project tasks they perform, provided the community has a voice in assessing how many points the tasks they perform are worth (the same as with non-CH workers). I don’t think they should have ownership and control of the project – especially the ability to sell a project to a third party.
– Their tools aren’t available until a project has been approved (and presumably ownership transferred from the creator to CH). The ideal Open Business site would provide a tool set for anyone to use, allowing the visionary to build projects, as best they can with however many people they can bring in, which the community may not yet see the use of. As well as letting people who’s current idea may be worthless get practice with the system.
I’m uncertain whether the ideal Open Business solution should be a stand-alone open source program, which anyone can download and install on their site, or a set of tools integrated into a website like Creative Commons or OpenBusiness.cc. I’m not a fan of centralization, but the reality is, for the idea to work it needs an involved community and that’s going to be easier to achieve if we all come to one place.
If we can get a few people to agree on what’s needed, then we can start talking about how to build it, and where (openbusiness.cc being the most obvious place).
Sam,
On the fund raising, I agree with you that there should be other ways than what we have today. The closest I have seen is Angel Funding, because in the end an Angel is a micro-investor. Another project that seemed very interesting is the Media Venture Collective (http://www.mediaventure.org/). From what I have seen however, the project has not really taken off yet. Maybe the time will come where the concept can become more popular…
Marc and Jeremey, thanks for the repsonse
I think an an OpenBusiness system can start out in a centralized place, but then grow. Think of the first Linux project back in the early 1990′s, and look at how many there are now. the key is making things genuinely open.
I see what you mean with the Cambrian House project. A lot of people are jumping on this “Crowdsourcing” bandwagon.
But, I am talking about Open Design, and Peer to Peer micro investing. In my system, the project proposer sets ownership up front, and themoney comes from peers. So, this gives people a way to directly sell to their peers, and to raise invesmtent money. A private business could do this. The business could just charge money for listing the projects. The private business could totally keep it paws off of the control of the IP. control of IP could be left to each individual who posts their project. So could the terms of investment (within legal bounds).
I need to do more research, but, I believe that people can crate these proposals and agreements among themselves right now. A formal central site would just give them an easy infrastructure to do it in, and it would give them the advantage of findability amongst one another.
I agree that Open Business can start as a centralized solution and branch off as people feel is necessary, and I agree about the need for the solution – and everything – to be genuinely open.
I definitely agree that the creator shouldbe the one to decide ownership.
I disagree about having the solution run by a for profit, private business. I can see having a non-profit dedicated to maintaining a central web site, like Creative Commons, but no more. All the aspects of Open Business infrastructure can, as far as I can see, be implemented in a software package, much as Creative Commons licensing system is.
Technically it’s true that people can work out agreements and proposals among themselves now, but you never know what you’re getting into. How do you know you can trust the other person, or that you’ll be paid for your work? What rights do you have if you’re in seperate countries? The program would set everything out up front, and, if it’s running on a reputable site with a large community, you know there are other people watching and that will keep everyone honest. If worker X earned 10 royalty points and was only paid for 5, it’s right there for everyone to see.
A charitable corporation or not-for-profit, like Creative Commons, is better. The solution could assign itself a small percentage of “royalty points” for bandwidth/server space/ and a minimum of staff. We should focus on doing as much of this in software as possible.
Ignore that last paragraph – I rewrote the previous portion of my comment and forgot the last paragraph was there.
Jeremy, I can actually agree with you that to launch something like this, it should be done through a non-profit foundation.
But, I think that the people who participate should be able to work together in totally for-profit ways. Only the enabler should be non-profit, IMO.
I think that eventually, once an open business, (potentially) peer-production, micro-investment system like this is established, that other “enablers” could emerge who just provide a marketplace for micro-investment, but are for-profit. For instance, you can sell materials on Lulu.com, or ebay.com, and ebay and lulu do not claim ownership, so they are relatively content-friendly to independent creators selling their content on their sites. Similar commons-based for-profit provider business models could eventually emerge for what we are talking about. In fact, they probably will emerge if what we are talking about takes off.
However, I can agree with you for sure, that, to start out, the enabler should be non-profit, although possibly sustained by small contributions from community transactions. I also agree that reputation systems like you describe, and transparency are key to making it work. People can either use templates for agreements, or create custom agreements for their micro-investment proposals.
I had originally imagined more of a “site”, like an ebay marketplace type of thing, where people propose and develop, and transact all on one site. I think projects like ourmedia.org are showing that non-profits can manage large volume projects like this. So, I think your idea is a good way to start this out.
contd…mostly, I agree that a non prfit is a good way to go, because it will give the whole system some breathing room to grow and evolve. I think there actually needs to be an expanded set of licenses beyond what currently exists for some of the IP that people might create under something like this. Like a Creative Commons license spectrum that people can apply to technologies that they usually would have patented in the past. The Creative Commons licenses are great for media content, and there are several good licenses to choose from for software technology creations. But, what about hardware technology creations? What about a unique bicycle design, or an automibile design, or a even a pharmeceutical?
Yes we are 110% in agreement about the central location being non-profit, but the individual projects can be for profit. My big worry was that, if the central location is for-profit, and especially closed, it will inevitably turn into mp3.com or Cafepress. Even DeviantArt is IMO on shaky ground these days, with terms of service which allow them to reproduce art on any electronic medium that will ever be invented. History would seem to show that all closed, for-profit organizations eventually go bad.
Sites like Lulu.com are o.k. but may in time face competition from Open competitors.
My guess is many of the organizations who sponsor Creative Commons would be willing to at least partially fund an Open Business Commons.
Making investment work could be tricky, I’m sure I don’t have enough knowledge to discuss it in better than general terms.
One way to approach investment could be to allow investors to purchase royalty points issued by the project. Purchasing royalty points wouldn’t transfer project ownership or control, only a percentage of the profits. But what if the project wanted to become a publicly traded company? I guess we will have to take this idea as far as we can ourselves, and then try to find qualifed people with the right idea about Open Business to step in. We need a Lawrence Lessig of business. Maybe one will read this and appear as if by magic. Or perhaps we can develop the basic idea to the point where Creative Commons would be willing to take it over. Or maybe we could just point to Cambrian House and say, “Like this, but Open and run by a non-profit.” But leave off the marketing and product design work Cambrian House does. Those roles can be fulfilled by seperate “enablers” as you mentioned.
Regarding the other license/patent problems you raised, the discussion area of Creative Commons seems well set up to develop those things when the need arises. If we agree CC is best equipped to develop the Open Business Commons, maybe the best way to get it started would be to go to their discussion forum and work through their process. I started the topic on their community forum a couple days ago, but that led here. Ironic that it might lead back there again. But maybe not, since CC and the OBC would naturally intertwine.
I tried to implement a model similar to this from 1999 – 2005 at http://www.quovix.com (defunct). The idea was to use an opensource model to build custom build-to-order software solutions. The community of developers would profit from each project. We did quite a number of projects (> 100) but couldn’t scale beyond $1M/year in revenues. Hard to find businesses who outsource projects – mostly want contractors with specific skills. The good news is that another company bought the IP and is still using the model to do similar things in research.
I’d be glad to offer my knowledge I gained over six years. I wrote a few white papers that still circulate through various universities talking about this stuff…
Jeremy wrote: “One way to approach investment could be to allow investors to purchase royalty points issued by the project. Purchasing royalty points wouldn’t transfer project ownership or control, only a percentage of the profits. But what if the project wanted to become a publicly traded company?”
Well, I think you could give people a a range of choices to start out with. They could choose a project structure that is like a template that is created to allow them to either stay private, but sell royalty sharing points. Or, they could choose a template that gives them the option of transforming their project into a publicly-traded company, perhaps with the understanding that royalty points will be converted to stock. I can already legally make these types of agreements with people. A central site just makes it easier to find everyone interested in doing it.
Jeremy wrote earlier: “Their tools (Cambrianhouse) aren’t available until a project has been approved (and presumably ownership transferred from the creator to CH). The ideal Open Business site would provide a tool set for anyone to use, allowing the visionary to build projects, as best they can with however many people they can bring in, which the community may not yet see the use of. As well as letting people who’s current idea may be worthless get practice with the system.”
The idea I have goes beyond just software development. Although, I think that the overall idea we’re talking about might end up needing different “site” communities for different types of Open Businesses.
But, to focus on the software for a moment, what you are talking about above could be accomplished. Indeed, Cambrianhouse’s “Norseforge” is based on the open source SourceForge system. So, a similar environment would need to be built (presumably from open source components). But, I think that you are right, that basically, you could do something like Cambrianhouse, but with user-controlled IP and licenses.
But, beyond software peer production, I think that people can also propose ideas and plans for all kinds of possible products and services, and fund and develop them in peer-investing ways, without all of the spoils going to the “enabler”. I hope to have a pilot project launched in the Midwestern US soon that will incorporate these ideas, and will also include case studies and overviews of some of these business models, (along with Micro-enterprise concepts, Participatory Media knowledge, and civic engagement ideas).
mmorrow, feel free to email me samuel.rose(at)gmail.com, as I’d be interested in reading yor whitepapers. I am personally very serious about getting something like this going, and it’d be great to have your input.
So, I like some of the ideas inherent in Logoden. Particularly the resources being provided by the community. Ialso like the ideas behind A Swarm of Angels
In particular, I like the ideas in bothof those projects of reaching “milestones”, which emulates proven structures in open source software project management.
This is a response to mmorow – it would great to read on Openbusiness about http://www.quovix.com
And to all: if you know of any distributed or p2p investment models out there it would also be great to see those discussed