Friday, April 15, 2011

The legal form of SENSORICA - what are your thoughts?

The legal form is not an easy question...

Sensorica, our open enterprise, can be understood as an infrastructure of communication, coordination and collaboration, as a tool, NOT as a legal entity. We can also talk about the Sensorica group, which is a decentralized, value-based collaborative network of individuals, private organizations and academic organizations.

Members of Sensorica ARE legal entities and tax payers.

This is important in order to allow Sensorica to spread across the globe, to be fluid, and also to allow it to interface with other similar networks (communities like open source software, open manufacturing and 3D printing), which, as we are starting to understand, are very important for Sensorica to reduce the costs of our products and to insure continuity for our clients, etc.

What is important for a venture is to grow its market value, not how that value grows. We have the technology to take input from a wide base of contributors, to filter it, and to add it up coherently. Even if the input is very small, worth one hour of work, we still want it, because thousands of people are willing to give us that, and we want it all. The classical model takes in only large portions of value from a limited number of individuals, which are supposed to produce at their maximum capacity. With the new model we want to cast the net wide, to collect as much as we can. This is why Wikipedia surpassed in volume Britanica in only a few years! This model has already been demonstrated to be viable. We cannot do that if we treat every member as an employee. Members, by the hundreds, need to be able to freely come in and out of the organization, adding value to the product a bit at the time.

The internal structure of the group must be maintained flexible. Sub-groups must form dynamically around projects and they can dissolve once the work is completed, to be recycled into other soub-groups within the larger network. Because there is no formal status within the organization, this reshuffling can take place spontaneously. The internal bureaucracy must be greatly diminished.

How is the compensation handled? An independent entity takes care of billing the customer on the market side, and of distributing the income to every member in proportion to their respective contributions. Members declare their revenue in the country of their residence. The independent entity is not part of Sensorica, it only offers a service to the members of Sensorica group. We can create a non-profit to fulfill that role. If Sensorica would be a legal classical form it would be harder to solve the income tax problem, and the logistics for paying contributors distributed all over the planet will become more complex.

This independent entity can be understood as a value accounting organization. Every concrete contribution to the value of the enterprise is registered/recorded and evaluated. When products are exchanged on the market their value is actualized. The revenues generated from that exchange is redistributed to members according to a specific and explicit value sharing scheme. We could also consider an open alternative currency being used within the network, used to exchange value among members. The independent value accounting organization manages the internal flow of value.  

Individuals can incorporate themselves. Corporations can become members of Sensorica network, as any other form of organization.

Can this be implemented? I believe that our technology today, all these tools of communication, coordination and automated logistics, allows such loose and flexible structures to maintain their coherence. The key concept is self-organization, set in motion by a powerful sent of incentives, which can be created by communicating effectively and in real time the sources of value (rewords) and the system of flow of value, in and within the group.

If we want to harvest the planet this is, in my opinion, the only way around. Otherwise we go back to large chunks of value contributions from a limited number of individuals, concentrated mostly locally, and we miss the technological revolution boat.

We need legal agreements between members of some sort, firstly to grantee to contributors that they WILL BE paid (that’s where the main insensitives are) and secondly, to secure our tangible assets. Members will have to disclose their full identity.

Products would be produced and handled by member organizations, by licensed manufacturers, which can take any legal form. They would take responsibility for quality and guaranty. These manufacturers would not be partners of Sensorica, they would be PART OF Sensorica.

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