About Revenue Share
OSE History
OSE is a nonprofit 501(c)3 organization that relies on programmatic revenue for funding. As the core of our funding policy, we promote programmatic revenue from education programs and machine sales. We do this intentionally - so that we do not rely on foundation grants - which can disappear as fast as they appear - forcing orgnaizations to cut programs. OSE wants to put itself in a financially autonomous position, for reasons of continuity. As such, it operates more like a business - via its eearned, program revenue - as opposed to outside foundation funding. We are not opposed to foundation funding - that is just not where we put our energy. Instead, we spend our time on developing products - se that we create a viable funding model that would allow many organizations such as ourselves to bootstrap fund their operations.
We have achieved certain innovation on bootsrap funding. Early on (2007), we started crowdfunding and our True Fans program - 6 years before Patreon was founded. We ran kickstarter campaigns, posted funding baskets for individual projects, and eventually reached the world stage with the TED Talk. Within 3 years, we received about $1M in foundation funding, and things were great until that money went as fast as it came. This is what reinforced our notion of programmatic revenue being a stable way to fund projects - as no foundation will fund the revolution. They can help - but not to get OSE to the next trillion dollar economy with thousands of OSE campuses around the world. Our ambitions for regenerative solutions at scale are high - and a scalable enterprise model needs to be innovated to match that need.
To date - we have reversed the funding model in production, by innovating on the Extreme Manufacturing revenue model. In this model, the customer pays for an immersion learning experience - and there is also the possibility of a product sale - such as our Compressed Earth Block Press, a Power Cube, Tractor, 3D printer, or even a house. In our model - we don't only produce an immersion education experience - we produce a real product as we have developed ways that make this possible even with unskilled participant. We have lowered the barriers to entry to the point that even inexperienced participants can participate meaningfully in an immersion education/production experience that yields a real, functional product. Such a product can be sold in the marketplace, and in our model - we invite the customer to the actual build. This allows the customer to understand the machine to the point that they could even rebuild or fix the artifact - if they want to do it themselves. We produce transparent designs that are easy to fix and maintain for a lifetime.
As we teach people how to build machines or other products, there is the possibility of machine sales. Historically, some participants have asked about profit sharing, and misconceptions arise as people are not familiar with OSE's operations and funding. There are several aspects to this explanation. A savvy entrepreneur understands that a sustainable business must bring in more money than it spends. However - this point is very confusing to those unfamiliar with business - and it's even not clear to established entepreneurs. For example, as of this writing, this point is not clear even to a company like Uber, which as of today (May 2021) has yet to bring in more money than it spends. This page aims to clarify the issue of OSE's nonprofit operation, and the related concept of 'profit sharing'.
The first thing to point out is that an enterprise has operating costs. Whenever OSE makes a product sale - it operates like a business that sells products, not a non-profit that gets donor funding. With the business nature of any deal - there are operating costs, risks, years of product development behind the product, marketing costs, operating costs, staff, and facility operations. Whenever we produce something within an immersion workshop or education experience, there are significant costs involved. First, to develop and deliver an Extreme Manufacturing requires a lot of effort and cost. When OSE brings in revenue as such, there is no profit to speak of. All revenue goes back into the operation and covers costs. While it may seem that we brought in easy money - the truth is that a lot of cost and effort went into an Extreme Manufacturing public event.
Let's give a specific example. The current cost projection for the 7 month period from June 1 to December 22, 2021 - surrounding the Summer of Extreme Design-Build 2021 and the related OSE Apprenticeship program - is around $450k - and also our most expensive program to date. Typically, we have operated on an average of a $100k/year shoestring budget over the last decade, 80% of which went to infrastructure and materials. To date, most staff time is volunteer.
The 2021 budget is 90% materials and infrastructure construction costs. The budget includes materials for dozens of machines that participants will build, facility improvements such as a new workshop to provide space for the larger program and audience that we will have this year, additional housing for participants on site, a site manager, and other operating costs. To reduce costs, we will be using our own machines - such as tractors, 3D printers, and sawmill- in construction - as well as our own materias such as CEB Block from our brick press. The cost figure for 2021 is an extremely efficient value- it would likely cost millions without our open source machines and techniques. But it's important that we continue to reduce barriers to entry - such that regenerative solutions at scale become a reality in terms of a livelihood option that anyone can take on.
Workshop revenue and tuition fees must cover these costs. OSE is further taking on additional risks by taking our a loan to cover preparation costs. The above illustrates some of the costs, prior development effort, risks, and opportunities involved. Getting back to profit share - let's address this question clearly for participants so that this is not an issue to some who may perceive that 'their labor is being used so someone else can make money.' That is so far from the truth. It should be clear that all revenue goes to cover costs - and there is no such thing as profit. Our first goal is to cover costs - so we remain a sustainable business - and second - we put all excess into improving our programs and growth, so that anyone can benefit from the open knowhow that we create. We are creating significant value: whether it is the design of the Seed Eco-Home that anyone can build at a fraction of the cost of any alternative to address housing - or our lifetime design Lifetrac that can be used for construction or agriculture to lower barriers to entry - or our 3D printers - all published openly - each worth billions of dollars of potential market share. We know that we are creating signficant value - and we have no qualms about what we are charging for our workshops and programs. And no, participants in our workshops, immersive builds, in the OSE Mentorship, or in the OSE Apprenticeship do not get a revenue share.
So does that mean that nobody can work with OSE - that OSE isn't hiring? Absolutely not. We are open to working with or hiring graduates from our programs- with the OSE Apprenticeship designed specifically for that purpose. This is where specific work contracts and agreements can take place - as we are enabling others to collaborte on open product development, and to replicate our operations, all over the world. Contractual agreements are spelled out black and white, and these come after people finish our programs and get various certifications. But not during the programs, unless specific agreements are made in writing to the contrary.
What about the Seed Eco-Home, which we envision as a solid revenue model for growth? Our goal is building one in 1000 hours and charging $50k for that. We may achieve an even faster build as we optimize the design and build process further - until full automation. For OSE sustainability, the basic ratio must be about 50/50 - 50% goes to staff and workers who do the build, and 50% goes to OSE for operations to deliver such builds. This is just an industry standard for what a company needs to make - and how much it can pay its workers - if it is to stay afloat. We are reifying all these numbers as we develop the revenue model of the Seed Eco-Home so everyone can gain access to the highest quality build at the lowest possible cost.