The main difference between SENSORICA and a corporation is that members of SENSORICA are only remunerated if their input reaches the market. Corporations pay their employees per hour and are obliged to focus activities. In this context, passionate work that is not aligned with immediate business goals is restricted, which limits the creativity of the organization.
Google understood that passion is the source of innovation. They allow their employees to spend 20% of their time on personal projects. G-mail, Adsense, and Google News were initiated by self-motivated employees. 3M developed a 15% time rule in the 1950s. Other companies are trying it too, but not everyone can afford it. There needs to be a large profit margin to sustain this type of couture, taking into consideration that creativity and innovation are highly unpredictable.
On the other side, gift economies like Linux, Wipedia and other open projects are thriving on pure passion. The adverse side is that contributors are not remunerated directly and in a tangible way for their work.
SENSORICA situates itself somewhere in between. Everyone is free to engage in passionate activities, and everyone understands that not all activities will bear fruits in the form of successful products. In other words, not all activities will be remunerated in a tangible way; this is the gift economy part of it. The members that are more motivate by tangible revenue will adhere to collective activities that promise market success. That is their choice, and this choice is informed by internal systems of market analysis and strategy.
The value accounting system we are designing must be compatible with this idea. All activities are recorded in detail and are evaluated. The revenues form every product exchanged on the market are redistributed to SENSORICA's members according to their individual contributions to every particular product. These contributions are recovered from the database on logged activities. Some activities might be counted as part of a product a short time after their completion, for others it might take a longer time. Some input might never see the market.
The reputation and the role systems will also pick up data from the database of logged activities. For example, members that contribute to viable products on a regular bases will be recognized as being revenue oriented and major contributors to the tangible wealth of the community. Other members that are mostly driven by passion will be attributed other roles and will gain a different reputation. Non-tangible value is still value, and some of us are driven by it. And one cannot exclude the possibility that one day an individual passion-driven contribution can find itself at the core of a very successful product.
Revenue in SENSORICA is conditioned by market exchanges. This allows us to incorporate a gift economy within our model. Development can be market-driven or passion-driven. We get the best of both worlds.
See the first comment to this post for more clarification on the impact these new ideas have on our value accounting system.
References
Thoughts on Google’s 20% time
This comment brings more clarity to the post above, and was written as an answer to questions sent privately by Bayle. More precisely, it explores the impact of these new considerations on our value accounting system.
ReplyDeleteMOTIVATION: We want to allow members of SENSORICA to engage passionately. We want to include a gift economy in our model. We want revenue driven members as well as passion-driven members to be very active within SENSORICA, and to avoid conflict/tension between these two groups.
In a corporation, if you spend too much time exploring stuff which is not directly aligned with immediate business goals you may get criticized for slowing down the machine, which is detrimental for those who are there to crank out profits. I am a passionate person and I felt this tension while I was developing laser applications for Raydiance Inc. This tension between passionate engineers and the business contingent is well known.
Now, how can we reconcile this with our contribution-based compensation model?
Revenue is only generated whenever a product is exchanged on the market. But if we open the valve to passion a lot of activities will not be integrated into successful products (=those that reach the market). There will be two parallel innovation streams. One which will be market-driven, starting with a well identified need on the market and arranging activities to provide the solution. A second one which is purely driven by passion, which will look more like Brownian motion. These two streams are coupled. Passionate members have access to market-driven initiatives and can jump into the stream at any moment. On the other side, passionate work is recorded/visible, and market-driven members can get their inspiration from it.
Outcomes:
# Some work activities are already part of a stream that leads to a market exchange
# Some work activities are not part of a stream that leads to a market exchange, but they can be picked up later by such stream.
# Some work activities will never reach the market.
Valuation is not only subjective and contextual, but also relative. In other words, we can only valuate one contribution against others for one product or service to be exchanged on the market. So I think we need to uncouple activity recording and activity valuation. The valuation process must happen, in my opinion, at the moment when the product is assembled for the market, in that particular context. Activities are recorded as soon as they are completed, on a continuous bases. The information associated with activities must be sufficient to perform their valuation at a later time. Are there other alternatives?
There could be other valuation processes and many value accounting systems coexisting. From the database of recorded activities we can extract data and analyse it in different ways. There could be for example a mechanism to evaluate SENSORICA's wealth in practical ideas, taking into consideration all ideas explored and documented, marketed or not, and showing the relative input of every member. I guess that we need to leave that option open to the community. Every member should have access to the recorded work and to the PieTrust engine to create different ways to analyse data and to display information. Different metrics for different things will emerge.
I understand your argument that members of Sensorica are only remunerated if their inputs reach the market, in a way a somewhere in between a gift and a market economy. I have two questions (and perhaps sub-questions)on that:
ReplyDeletea) a member may develop something that does not have market success (for reasons that may even be beyond his direct control) but the technology he/she develops may still contribute to the organization in the sense that others can use it to develop new stuff that can be a great hit. Would this member be compensated in any way? If so, how would we measure that?
b) there seems to be an incentive here to be oriented towards the market. This makes me think of the cultural industry (more according to Adorno and Horkheimer's understanding). If the goal becomes reaching the market to be compensated for it in more instrumental terms, in this analogy a product would tend to be developed so that it is easily "digested"and "assimiliated" by the masses (or whatever makes more money) rather than to promote art as a greater good (something that, to me, in the "cultural scene" is only getting worse and worse). Would you see any relation of this in the context Sensorica? Couldn't there be the development of profitable products that would go against Sensorica's values? Wouldn't it in the end still be fostering immediate business goals (as in a corporation), but now shifting it from the organization to the individual?
We developed methods to finance projects, i.e. to get funding before a product reaches the market: grants, crowdfunding, peer-lending, financing and other alternative schemes. See the Revenues page http://www.sensorica.co/home/building-sensorica/revenues
Deletea) All contributions are recorded. All past contributions that are recovered for future projects are taken into consideration, and reevaluated within the new context. We still need to refine the method.
b) "there seems to be an incentive here to be oriented towards the market" No one is forced to contribute to projects that have a defined path to market (example - Mosquito path to market http://www.sensorica.co/home/projects/mosquito/mosquito-path-to-market). Some affiliates/members play the role to study the market and define products from projects and paths to markets. These members make their case within the network and contributors have the choice to adapt their approach to satisfy this case, if they respond to the incentives defined by the path to market (tangible gains, financial or material, or a social gain). There are only incentives, no obligation. Some members can decide to remain within the gift economy. Others will respond to tangible incentives. Others will probably do both... Until now, after one year of experience, almost all members are motivated by tangible incentives, and would like one day to be able to survive on contributions to SENSORICA projects. Perhaps once they are materially satisfied they will allocate a part of their resources to gifts only.
Thanks for the responses. As you mentioned (in talking about refining the methods), it seems important to me that it is clear for members to know how their contributions that do not reach the market will be compensated so that they can decide whether or not to engage in more, among many others possibilities they may have, experimental/uncertain-short-term-market-return projects. (This, it seems to me, would address both points a and b). From a pragmatic point of view, I see it as quite complex in doing this this assessment (how much of that creative spark should be compensated?), and I agree with you in the last paragraph of the first commment that it involves opening it up to the community and relying on the analysis of databases of recorded activity.
ReplyDeleteAt the same time I was thinking whether failure would be rewarded in some way. Someone who tried extremely hard and put a lot of time in doing something that would be great for the organization but it turns out to fail (and cannot/will not be used in any future project). I would suspect that either the risk becomes an individual endeavor or the community would decide to share it somehow and compensate that individual.
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