Thursday, March 24, 2011

The meeting went... not so bad...

The scope of the meeting was to converge on a legal form/structure for our venture.

After bitting the dead horse for at least 45 minutes, i.e. talking about the corporation, we finally moved to other legal forms/structures and I presented my simple business model.

The member that had resigned was also at the meeting, strongly advocating for the corporation. In the end the resignation was reaffirmed. Another partner received my model with neutrality. The other one started to accept it and we had a very long conversation, seeking to improve it.

I still feel that my two remaining partners are not fully convinced that "open" is the way to go, but they are now moving towards my vision simply because of my central position within the venture, as the main technical person behind our prototype. I do NOT consider this a victory until my partners are not fully convinced that the open enterprise is economically viable, that it offers huge opportunities, and that it promises us all a better future.

Please feel free to comment on our starting model.

Wednesday, March 23, 2011

A crucial meeting - converging on a legal form and a business plan

During a recent Skype meeting, Shereef, co-founder of BetterMeans, suggested to chose my partners based on their level of acceptance of the open model. He's got a very good point, but unfortunately we don't always have this choice. Capital intensive innovation often takes place within a pre-established social context. In our case, our optical fiber sensor took shape around our physiology lab at McGill University. Moreover, when the means that lead to discovery and finally to a product are expensive, a strong interpersonal bound is needed. In this situation the choice of my partners is very limited, at least at the beginning of the venture. I cannot form a group according to my likings, I need to educate and to convince.  

I preparation for the meeting, I had a long face-to-face conversation with my new friend Sebastien Paquet. In a spark of genius, he made me realize that my proposition to my partners (to form an open enterprise) was a big piece to swallow. He used the metaphor of an emergent city to illustrate the idea of an organic, progressive growth. We concluded that I need to put forward a very simple business plan, one that promises immediate revenue and that bears the seed of an open enterprise. It will be my job to connect with other resourceful partners that will increase the value of our product, and to demonstrate the need to lower the barrier of entry, to open up, to be transparent. Gradually growing our value and our production capacity through open practices will convince my partners of the economical viability of this new business paradigm.

Thanks to Sebastien, I now have a very clear proposition to put forward at the meeting today, which will take place 2 hours from now. Stay tuned for the results...

What legal form should we chose for our venture?

This question was in our minds since the beginning, but now it's time to make a decision. In preparation for this event I tried familiarize my partners with the open enterprise concept and to harmonize our ideas on value exchange. I did my best to explain to my partners that the world is changing, that we need to use the new technology to its full potential, that today being open and transparent makes economical sense. We also discussed about the culture of open collaboration and we experimented with some tools we would need to support a large collaborative group. Despite all this preparation, when time came to decide on a legal form for our enterprise my partners unanimously voted for the f... corporation!

I obviously objected. Luckily I am the technical person behind our prototype, otherwise my opinion would not even count. So we went back to the drawing board. But in retrospective I tried to understand their reactions. My understanding is that my partners are somewhat accepting the idea that the world is changing in a fundamental way, but they think that it is going to take a very long time, and that the conditions which would make an open enterprise thrive are not there yet. My partners look at our prototype, they see value in it, and in a very pragmatic manner they decide that the best way to turn our know how into wealth is by forming a corporation, is by going the classic way, a way that is proven to work and that will continue to work for a long time to come, in their opinion. In other words, I think my partners want to make money and they think that they are taking an unnecessary risk if they embark on a venture that they do not understand.

I also tried to sell them the joy and the excitement of writing history by implementing a successful open enterprise. I tried to show them all the good that will come out of decentralization and of putting the power back into the hands of the creator/producer. It seams that non of that worked, which means that the current system still sends powerful signals and incentives to individuals to conform with it, even though people understand that something big is about to happen, even though they are convinced that the system is economically and morally bankrupt and it is in fact doomed.

I do not want to abuse of my privileged position within the group and to impose my will. I simply told them that the founder of Multitude Project CANNOT run a corporation. I tried to make them understand that this choice is beyond my limits. One of my partners resigned over my reaction. We are back to 3 members now, getting ready for another meeting in a few hours where we'll try to reach another agreement.     

Friday, March 18, 2011


The type of organization and the work culture determine the tools we use. Collaborative organizations make heavy use of online collaborative tools: shared databases, communication (email, mailing groups, netmeeting and conference, blogs), shared documents (text, spreadsheets, forms, presentations, videos, drawings), project management, coordination, outreach, data and process visualization, geomapping, etc. If the organization is open, these tools must also provide transparency and a low entry barrier.

I call an infrastructure of communication, collaboration and coordination a coherent set of tools that enable just that. I would also add to this infrastructure automated logistics, a set of tools that I consider still under developed. In fact, I predict that this field will fuel the next software development wave.

For most people, working within an open collaborative environment means learning how to use a set of new tools. From my experience, that is a problem. Anything new that requires learning and adaptation might scare your potential collaborators away.

Overcoming psychological barriers
  • Lower the barrier by choosing familiar and easy to use tools.
  • Provide a unified environment by building an infrastructure that allows users to jump seemingly from one service to another.  
  • Explain the necessity each tool.
  • Provide a collaborative learning space, designate resource individuals and set their priority for helping others to high, at least for the beginning.  
  • more to come... 

The infrastructure
  • modular: you can add and remove functionality without affecting too much the the entire system
  • scalable: growing should not be a problem
  • popular: potential partners are familiar with the tools and have easy access to them everywhere on the planet 
  • low cost: this is also crucial if you chose to grow the organization in countries with low income; try to use open source tools or free online services as much as possible 
  • outsource maintenance: focus resources on value creation rather than on the maintenance the infrastructure
  • more to come...
My choice was Google free products and services. Google provides a great variety of tools that can be easily  integrated (see our growing infrastructure). Moreover, these tools are becoming ubiquitous, people are already familiar with some of them. They aren't very fancy, but they are very simple to use and are robust. Google also offers comprehensive help, nice video tutorials and a collaborative learning space, so we can outsource most of that. We are also confident that these tools will be offered for a long time, and in case they will be discontinued Google has a good record for providing alternatives and/or easy exit processes. I also like the evolution of Google products and services, they are getting better, fast.

My initial group is not very tech savvy, so starting on a Google platform is probably the best choice.

One problem is that we are putting almost our data into Google's cloud. But we are trying to build an open enterprise, so it doesn't really matter, as long as Google provides easy ways of exporting it, which is actually the case.

There is also BetterMeans. My problem with it is that it proposes a centralized form of organization, which doesn't map onto the Discovery Network blueprint. Other arguments can be extracted from here.

Monday, March 14, 2011

Culture and work ethics

In a previous post I cogitated about how to sell the "open" idea to my partners, who are very talented and resourceful, and can add value to the enterprise, but are not necessarily tuned with the new economical paradigm. In this post I expose another fundamental problem that needs to be solved before our new group can become creative and productive. Even if my partners accept to go open, suppose that they are now convinced of the economical viability of the open enterprise, it doesn't mean that they know how to behave in order to sustain good relations that foster creative and productive collaboration, within the context of a Discovery Network, of an open enterprise, of a decentralized community based on value relations, rather than power relations.

Working together requires social skills. Moreover, every environment has its specificity. We need to read the underlying norms and to adapt to them, to adjust our behavior in order to maintain the harmony within the group. An open collaborative group is built on a specific culture and work ethics, which members need to integrate in order to act accordingly, to stabilize the group, to make it functional. This becomes crucial as the mass of the group increases.

Let's put culture and work ethics in more concrete terms. It is better to talk about rules and norms, explicit or implicit, which people follow when engaging one another. In normal situations individuals join groups with some positive goals in their minds. To achieve these goals the individual must gain acceptance within the group and must act to preserve the group's integrity. Suppose you walk into a club and you join a bunch of friends, for the first few minutes you are in observation mode, you are trying to read everybody, and to understand the rules of engagement, these norms which regulate personal interaction. If your friends discuss about hockey and everyone is loud, even swearing from time to time, you will most probably adopt the same attitude. Your behavior would be very different in other circumstances, if you were joining an academic group for example, discussing politics and economics. We adapt to the group. We try hard to preserve its harmony. We mimic/pace others, we laugh when we are supposed to, we dose our criticism, we chose our jocks, we act accordingly to our position within the hierarchy of the group, etc.

We all possess the skills to adapt to different social environments. Our brains are wired for a social life. Some of us adapt faster, others can take more time. But our case now is a bit more complex. We don't have an established culture and work ethics. We are not just adapting to a new social environment, we are building one at the same time... I found a lot of literature prescribing rules and norms, but non of us have actually experienced them all at once.

I am already involved in different open collaborative projects and I can confidently say that I am the most experienced person in our group. I believe I should take the initiative to propose a way forward. I am going to take it baby steps. The first thing I am going to introduce is a concept proposed by the Coalition of the Willing, "open stewardship" (we are still refining it). I'll also try to cultivate what I believe are the two most important individual qualities in the open (new) economy, autonomy and initiative.

See an old article I wrote "The myth of autonomy debunked, what about the myth of initiative?"

Friday, March 11, 2011

The group: connecting at a deeper level and building consensus

The genesis of an open enterprise centered around a material product is somewhat different than that of an open source software project. Usually, the product idea emerges in a particular space, in a given context. The individuals around it are not always chosen, sometimes they are part of it from the beginning. These individuals have particular skills and they provide crucial resources that help to move the idea to the prototyping stage. Even before the proof of concept, before the working prototype is created, a groups is already formed. It is very possible that these people who first aligned their interests to concertize the idea diverge in their opinions on how to commercialize it. The group goes through a crisis during the transition from R&D to a commercial entity. This crisis becomes more serious if the plans for commercialization that are proposed are very different. This is what I am dealing with at this particular moment. What is the best way out?      

My own assumptions:
  1. The world is going through a major transformation
  2. The open model or something similar is a viable economical model 
Possible reactions:
  • My partner doesn't agree with 1. and doesn't understand why we need to wary about 2. 
  • My partner might agree with 1. but disagrees with 2.  
  • My partner might entirely agree with 1. and in principle with 2., but the time has not come yet for 2. to be true.  
  • My partner is in total agreement with me. 

Other possible sources of problems
  • Technological literacy: The open model requires the use of specific internet-based tools. Some people are not very comfortable with these tools, and that might act as a deterrent. 
  • Culture of work and work ethics: Evolving within an open collaborative group requires certain skills and an understanding of the underlying culture and ethics. Some people simply don't feel comfortable sharing, or don't understand the norms regulating social interaction within these types of groups. 
  • Emotional barriers: 
    • A feel of devaluation: Some people understand that the world is changing, and that despite their experience their skills don't match anymore with the new environment. This might feel as a devaluation and can be very frustrating.      
    • Finding comfort in the familiar: The person might unconscionably chose to stay in denial, taking comfort in the familiar old world.   
    • Fear of the new or of the unknown: The person might be uncomfortable with the idea of change.
    • To risky: The person prefers to let others open the way, being not very confident in her own abilities. 

I asked Paul T. Horan, a collaborator from CotW to advise me on how to proceed. I find the process he proposed very promising and worth summarizing here. It consists of an open discussion in 4 consecutive steps.

1. Discuss our ideals
2. Find a common ground
3. Define long-term objectives
4. Establish short term goals

Participation is key to this process. No judgments are made, sometimes people are confronted to their own fears and biases during these processes and become vulnerable. Empathy and compassionate listening is key. The goal is to eliminate the irrational and to converge towards a rational middle ground.

Stay tuned for the results...

Thursday, March 10, 2011

What is an Open Enterprise and why should we adopt it?

Two days ago we had our second group meeting (at this moment we are four individuals in the group). The initial goal was to agree on some very general principles for a value sharing mechanism for our enterprise. We had one week to write them down individually and the idea was to get together to reach a consensus. Everyone in the group was aware of the Discovery Network model and its Value Exchange Mechanism. Not everyone agrees with this model and at least one member finds it too radical or even non-realistic. So I thought that we needed to harmonize our opinions and explore alternatives to the DN Value Exchange Mechanism that would bind us together.

Right after we started I took the opportunity to frame the subject of the meeting as such:

Taking into consideration the vast outreach that the Internet provides us, and the collaboration tools we have at our disposal, we need to think of creating an enterprise capable of growing fast, encompassing a maximum amount of resources from around the planet, capable of managing very complex relationships, while remaining creative, productive, and very efficient.

In other words, I wanted to attract attention over the fact that the world today is not the same as the pre-Internet world. We now have the possibility to forge strong collaborative relations with individuals or small organizations from anywhere in the world. We also have the possibility to find potential partners, wherever they may be, very rapidly. On the distribution side, we can spread our technology a lot more effectively than before. Therefore, it would be a mistake to build our organization based on a classic model.

Very soon into the meeting I realized that our visions diverged at an even deeper level than I thought. I was the only one to communicate my list of basic principles before the meeting, and I realized that it was hard for my partners to do the same, probably because they didn't have a clear idea of their own of an organization that would be better suited for this new world. Perhaps some of them weren't even convinced that we need to change anything to the classic organizational model, which has been proven to be economically viable and still appears to be unmatched.  

Our discussion deviated from value exchange mechanism to what is an open enterprise, and why do we necessarily need to adopt it. I guess it's not so easy to sell the "open" idea...

At some point into the conversation we were talking about how to structure relations with our partners. Needless to say that the language used was heavily grounded within what I call the old economical paradigm (the one operating within the pre-Internet world), with clear-cut distinctions such as us/them, concepts like internal knowledge or trade secrets, references to legally binding transactions, etc. My position was to keep the barrier for collaboration very low, to open our knowledge base, and to operate on transparent processes. During this meeting, as many other times before, my position was qualified as idealistic and altruistic. In other words, one member thought that I was such a good guy, perhaps even a little bit naive, that I was ready to share our knowledge publicly and invite anyone out there to join our venture, hoping that something magic will come out of it, somehow, that karma will come back to us in one form or another.

I find this extremely evocative. But let me first say that these remarks had absolutely no emotional or egoistical effect on me, because I know my partners and because I understand the source of the problem. To answer to these remarks I first introduced the concept of enlightened self-interest, through the example of Richard Stallmen, a guy who gave big and who lives well as a result of that. Making the distinction between altruism and enlightened self-interest was the first step, after which I tried to explain how large scale effects can be reached by being open, transparent, and by lowering the barrier to entry. The essence of this idea is that the Internet provides us with widespread outreach and with the possibility to build vast collaborative networks, with no geographical constraints. Being open allows our technology to spread faster. Potential partners can find us, instead of us spending energy finding them. Making the group more fluid, by lowering barriers allows knowledge, know how, and resources to flow through the organization. Eliminating defensive mechanisms also helps to create a better collaborative environment. After reaching its critical mass the organization can enter a fast growth phase, network effects kick in, it becomes an attractor, the technology becomes ubiquitous, many applications are developed. 

I also want to thank Sebastien for attending our meeting and for giving us his views on open collaboration.

From Michel Bauwens on Quora

An open enterprise is:
- based on a commons of knowledge, software and design, to whom everybody can participate given certain rules pertaining to quality etc .. 
- is managed collective and transparently by all those who contribute, augmented with a role for those who are affected by its activities; it is based on open book accounting 
- does not restrict access to the commons on which it is based, but it sells any scarce goods and services it may produce at a fair price; the revenue is used both for its contributors and the maintainance of the wider commons on which it depends 
- as regarding its material infrastructure of production, it based on the shared ownership of its owners, eventually augmented and combined with other stakeholders 
- the enterprise is mission-oriented around its commons, and uses profit only in accordance with its mission 
- it takes account of all positive exernalities through revenue or benefit sharing, and of negative externalities 
- it acts in solidarity with the wider world, not just for its own members

Monday, March 7, 2011

Selling the "open" idea - part 2

See part 1

In the last post I identified three ways of being "open". All these three ways lead to something very new. As it starts to generate value, the open enterprise begins to act as an attractor, spreading the collaboration meme and making the idea of competition lose its sense. If you find a successful open enterprise commercializing a product similar to one that you want to develop, why in the world would you compete with it? The door is wide open for you to join the open enterprise, to add new features to the existing products, to take advantage of the already existing pool of resources. I think it is wiser to network with the open enterprise, to add to its economical activities and benefit in doing so. Remember, the Value Exchange Mechanism on which the DN is built rewards you in proportion to the value you put in. Imagine that you present a new car design to GM and that they grant you access to their facility to build it, and that they allow you to take a cut from the profits generated by selling your model, based on your contribution. Stop dreaming, this will never happen because GM is NOT an open enterprise. It is NOT designed to serve YOU the creator and the worker, but to exploit human capacity.

If something in the last statement feels even slightly repugnant for you, that's because you see another important thing: the future massive transfer of talent from closed, hierarchical and monopolistic institutions of exploitation to the open enterprise. If we build an economically viable open enterprise it WILL spread, because it makes people feel better, empowered, respected for what they are and valued for what they can provide; because it offers a  fair deal to everyone. This is why I want to launch our invention in this new way, even before the paradigm shifts in the mainstream, knowing that I need to swim against the current, because I think we are in tune with the future. In my opinion, the "open" idea is a big idea, it is the way of the future. So I tell my partners to look around and see everything opening up, software, the media, education, governance, etc. There is already a clear pattern emerging. 

Usually, when I reach this stage in my discussions I get the following reaction: "You can't make competition disappear, this is what drives innovation and production". I agree that competition has its role to play. It actually doesn't disappear, it is displaced and somewhat hidden. The DN's Value Exchange Mechanism doesn't allow free riding or parasitizing. Your reward is proportional to the value you put in. Hence there is a race within the DN to get your ideas accepted by the rest of the group and to contribute as much as you can. Our goal is to enable large scale collaboration and I think the best way to do that is through openness. I also think that the DN's Value Exchange Mechanism preserves powerful incentives for individuals to innovate and to work hard.  

See also

Thursday, March 3, 2011

Selling the "open" idea - part 1

Building an open enterprise is building an organization, is forming a group. Some individuals and some organizations that I think can bring some value into the venture don't necessarily value the "open". How do I convince them about the economical viability of the concept.

The world is changing. If you read this blog I assume we agree on this, I don't think I need to provide an explanation. But not everyone sees it. Openness, sharing, collaboration, empowerment are the new buzzwords. But not everyone understands their true meaning. I believe that the open enterprise can be justified on purely economic bases. For me, openness is not just a trend. It does NOT stem from a sterile ideology. It is a new way of engaging innovation, production and distribution, which takes advantage of the new possibilities introduced by the new technology. It is the most effective way to tap into the creativity, resources and production capacity of the entire planet. It is the only way I know to cope with the increased complexity of our interconnected world. It is the most effective way to reach large scale effects and to benefit from them. But not everyone get's it...

What do we mean by "open"? In this context of an open enterprise "open" means different things.
  1. Full discloser of knowledge. The technology behind the products is open, there is no secret, and it is not protected by patents (or by the mafia). Moreover, everything is built on open standards. 
  2. Transparent processes. The open enterprise if a glass wall factory with glass wall offices. Anyone from the outside can take a look inside to see what's happening and how things are done.
  3. Easy access to contribute/collaborate. The open enterprise is not only a glass wall factory, but its doors are also open. There are some processes in place which give access to the manufacturing floor, and gives permissions to take part it innovation, production and/or distribution, but these selection processes are only based on value. In fact, going back to the previous point, there is no clear cut between inside and outside.      
From my experience, the most feared "open" is the first one. Telling your partner that you don't care about intellectual property is really destabilizing. The idea that you can only extract value from knowledge by controlling it seams to be very deeply ingrained in people's minds. I found that starting by telling my partner that the patent system is doomed (The collapse of the patent system) helps a little, but it doesn't solve the entire problem. Agreeing on the idea that the prevalent system is collapsing doesn't fix the best replacement solution among many other possible ones. I still need to make my partner believe that being entirely open is economically viable. But an explanation only goes so far, it would be much better if I could point to an example. The problem is that they are hard to come by. Existing (semi)open enterprises are mostly experimental or under development.

The second "open", referring to making processes transparent, is also a new and strange concept. It just doesn't fit with the idea of competition. I believe that competition works, i.e. it gives good economical results within an ecosystem lacking efficient means of communication, collaboration and coordination. The new technology favors social entities, individuals and organizations that are keen on collaborating and able to build and evolve within collaborative groups. Once we introduce this technology into the system we bias it in favor of social entities. Collaboration becomes a more suitable strategy within a world enhanced with this kind of technology. Humans are capable of both, killing each others like animals and cooperating and loving each other. So there is no problem with the substrate, the world can shift from being predominantly competitive (the western world) to being predominantly collaborative. Once we agree on this we are just a step away from accepting transparency. If I don't have enemies why would I hide behind a wall of bricks? But there is more than that. Being open enables me to get access to large scale effects, by allowing the enterprise to grow fast. Because we are transparent, potential partners can come to us instead of us spending energy to find them. Transparency also allows us to forge more stable and more productive relations with our customers and with the local community.

I found that "open" in the sense of easy access is more easily accepted, especially in the case where resources are scarce. It becomes a value proposition for my partners. If we don't have any funding and we cannot pay employees or for some essential services, or tools, or whatever, it makes sense to expand our venture by partnership. If we cannot buy value in we can still get it by sharing ownership, by leveraging our potential as a group. There is nothing new or strange in this idea, so it passes well.

See part 2.