Entrepreneur in Residence
EIRs are individuals who pursue enterprise development at Factor e Farm - though remote relationships can also be established as RIEs (Remote in Enterprise). The typical arrangement is a subsidy from running another Distributive Enterprise (DE) which has already been developed (currently, that is the 3D Printer Workshop enterprise, under development). This assumes that a certain distributive enterprise is already available and proven for the EIR to run. The intended outcome is that the EIR spends at least half of their time in developing a new distributive enterprise, while spending the remaining time in running an established DE. Because OSE is interested in systems-changing work, a subsidy is useful while a novel enterprise idea is being developed.
The strategy involved in selecting new DEs is to select open source products or enterprises with the highest level of product maturity and large markets. For machines - this means that working prototypes - typically with at least 100 hours of run time - are being taken to the product level - or productization. For other operations - the enterprise must be based on proven enterprises.
The time frame for EIR development should be around 6 month to develop a complete enterprise. For product development EIRs, the intent is that during the last 2 months of the EIR program, the technology is field-tested intensively to reach a minimum of 1000 hours of run time under demanding conditions. For agriculture enterprises, the time period may be 6-12 months, depending on the nature of the enterprise, where crop establishment can take the first 6 months in itself. The longer time period for agriculture is intended to take such establishment period into account.
Other enterprises may be considered, with the prerequisite that they contribute directly to an infrastructure or economy of a prosperous and regenerative civilization.
Process and Rationale
- Proposal and Selection. The EIR writes a proposal for developing a Distributive Enterprise (DE). The EIR presents a clear enterprise concept for a DE to OSE. Prospective candidates are chosen from individuals who have some form of existing working relationship with OSE, or are accepted by referral from trusted OSE contributors. We favor topics related to tools and materials development that helps to lower infrastructure startup costs, such as lumber production, CEBs, polycarbonate 3D printed glazing, charcoal, lime cement, locally rolled steel, and other materials and technologies related to infrastructure building using local materials.
- Rationale: 1. Proper expectation management is key to innovative work, and begins with clarity and basic feasibility analysis to determine whether an enterprise concept could be viable. At this level, back-of-the-envelope calculations are sufficient before a full proposal is outlined. 2. To help mitigate the risk inherent to establishing new relationships, OSE likes to work with people who already have a positive track record with OSE, and is a good initial filter because OSE has demanding selection criteria. 3. OSE is breaking new ground in terms of access to low cost infrastructure. Thus, enabling tools for this are most the most important contributions that one could make to the world.
- Bootstrapping. The EIR uses an existing enterprise (currently the 3D Printer enterprise, under development -MJ, Feb 2016) to fund the development of further enterprises.
- Rationale: enterprise development requires time and money. One persistent issue that OSE is trying to resolve is how to fund visionary work that requires significant development time, thereby allowing the work of OSE to scale to meet its current Roadmap goals. To this end, the EIR Program is creating a collection of openly accessible Distributive Enterprises which we test and use ourselves to fund development work. At the same time, we are encouraging any other social entrepreneurs to use the same enterprises for their own needs. There are no strings attached, and we welcome collaborations on developing new DEs. We are applying the open source concept not only to hardware, but also to the enterprise level, based on the concept of Economic Time-Binding, and all of our designs are Open Source For Ever. The bootstrapping approach is infinitely scalable, thus consistent with OSE's longer-term Roadmap.
- Revenue is King. An effort is not sustainable if it does not generate value. Exchange value is typically measured by revenue. Success of the EIR program can be met only when effective production is engaged to generate high productivity, based on industry standards that are modified to meet OSE's regenerative goals.
- Rationale: The challenge for OSE is to generate high productivity, while regenerating natural ecosystems.
- Revenue-Sharing. A revenue-sharing arrangement of net revenue is established between the EIR and OSE, based on the EIR's participation in a DE. The specific sharing arrangement will be determined based on the particular situation. The basic goals for OSE are to cover costs and generate additional revenue for further R&D. The basic goals for the EIR are to cover their living expenses and startup costs. Any new tools, materials, or infrastructure improvements are covered by the EIR, thus the EIR must operate with a lean startup strategy. Minimum monthly revenue goals are a share of $1000 going to each side.
- Rationale: Enterprise startup is risky. Revenue share is a way to share risk in an enterprise. OSE is investing staff time and infrastructure for use by the EIR. Accommodations, working infrastructure, tools, and a workshop are provided in the EIR program. The EIR provides their R&D effort, and bootstrap funding from the EIR's efforts within an existing DE covers the EIR's startup costs and living expenses. The revenue also pays OSE for its investment of time and infrastructure.
- Continuity. In order for operations to continue once an existing EIR leaves the program, a new EIR will typically be recruited by OSE. For this reason, the EIR program has a well-defined duration, and clear goals and timelines must be set. The EIR's goal must be clear for their duration of stay, such that OSE has ample time and clarity in recruiting the next EIR.
- Mission Alignment. It is expected that the mission of the EIR and OSE is aligned - ie, that the EIR respects that OSE is doing work for the greater good of humankind by producing open source blueprints for the enterprises of civilization. The assumption is that OSE's work reduces barriers to entry significantly, and thus the EIR's reward is the same. For this to benefit the EIR, the EIR has to take responsibility for learning to be productive, such that the EIR can create any of the 9 Forms of Capital joyfully and with ease. As such, the EIR should feel both empowered and empowering to others.
- Rationale: The mission of OSE is to create the open source economy by producing enabling open source tools, enterprises, and collaboration methods of unleashed creativity and productivity. If any EIR questions what value they are getting from the program, then they probably do not understand the core mission of OSE, and the EIR program may not be right for them.
- EIR's Investment. The EIR has full control over their share of revenue, and can invest as much or as little into infrastructure as needed. The EIR is responsible for replacing or fixing any tools that break as a result of the EIR's efforts. The EIR can keep remaining tools or materials that they purchased, except for purchases that were made as replacements for broken OSE tools. Permanent fixtures such as buildings remain at OSE. Buildings and other infrastructure should typically built using local and recycled materials, including but not limited to CEBs, local lumber, insulation, lime concrete, stone, polycarobonate 3D printed glazing, and other resources that focus on import substitution and relocalization.
- Rationale: The EIR is accountable to the work plan in their proposal. The EIR can save as much of their revenue share as they like, while meeting proposal objectives and milestones. This helps the EIR establish sound financial management. A budget and plan are to be proposed by the EIR in their Proposal, and line items specified are expected to be purchased. The EIR has an incentive for improved fiscal performance of their DE, in that their take home share increases.
- Exit and Startup. One of the key benefits of participating in the EIR program is that the EIR reduces their barriers to entry significantly - for any of the distributive enterprises that they participated with. This happens by virtue of gaining knowledge via direct participation. EIRs can save as much of their earnings as they like, as the overhead for living is minimal at OSE facilities. To reduce barriers to entry further, OSE is offering capitalization assistance in terms of the ability to produce certain startup capital by using OSE resources. This may include building materials made from indigenous resources, 3D printed polycarbonate greenhouse glazing made from recycled material, fuel (charcoal), machines built in the OSE workshop (EIR covers materials costs), chickens incubated by an open source incubator, plant and animal stock from its genetic pool, and other resources.
- Rationale: OSE's goal is to demonstrate that people can run distributive enterprises outside of their involvement at OSE facilities. For this, we encourage an exit event. To help on the capital expenses of startup, OSE can offer some materials, but it's primarily the EIR's knowledge that enables them to start an enterprise effectively at low cost, by following the same blueprint that they used while at OSE.
Selection Criteria and Review
Distributive Enterprises are evaluated based on their replicability, including the assumption that they are a Regenerative Enteprise:
- Revenue potential of the enterprise - an enterprise must be designed from the start to have a robust financial outcome, measured in terms of startup cost, breakeven point, overhead, and stable revenue stream once the enterprise is developed. Ie, clear and measurable financial goals must be proposed in the initial application.
- Revenue projections for the duration of the EIR period - These must demonstrate bootstrapping ability with no more than $2k of startup capital. At the minimum, sufficient revenue must be generated to break even by the end of the EIR. Rationale: the developments must be sufficiently productive to pay for themselves in 6 months (or 12 months for agriculture), assuming low overhead (work and living environment is available at low cost)
- Replicability. The application must include a replicability plan: meaning the plan to document, provide outreach, generate funding, leverage crowdfunding and other public development channels, develop a community of users and developers, provide ongoing publishing of progress on at least a quarterly basis; provision of assets such as templates for developmnent and for enterprise. This assumes that the enterprise is financially sustainable, and financially robust in terms of ability to produce a solid product while growing a solid customer base. General revenue goals are $50/hour net revenue from a developed enterprise. A minimum of $25/hour would be the minimum replicable value - though it should be higher from the assumption of lean optimization and efficiency that is afforded by the open source economic development method. For example, Toyota net profitability per car is 8x higher than any other manufacturer (see The Lean Farm). Likewise, OSE is pursuing radically efficient enterprise models via open source product development. By these measures, doubling or tripling the minimum wage of $15/hr should be easily within reach for optimized enterprises.
Monthly and quarterly reviews will be part of the enterprise. Each month, the 3 questions above will be updated in the person's work log.
Upon commencement of the EIR program, an initial Business Plan is proposed. At the end of the EIR period - either 6 or 12 months - 2 documentation prouucts are required. (1) - an updated business plan is proposed to reflect the learnings. (2) - an Operations Manual including ergonomic analysis (time requirements for various tasks) - detailing all operational aspects that are useful for another person replicating the Enterprise.
Distributive Enterprise Business Model Brief
The prospective EIR is required to propose a clear value proposition, summarized in this template:
Based on Business Model Canvas -
Basic Program and Positioning
The EIR program is the "home of open enterprise", and "home of distributive enterprise." When people work on Distributive Enterprise in general - they are called Distributive Enterpise Fellows - and they can be remote or on-site at the global headquarters of OSE - in which case they are called Entrepreneurs-in-Residence.
EIRs develop a distributive enterprise every 6 months via a focused effort, at which point, new EIRs may be recruited for replication testing. If infrastructure for the EIR's program is lacking, such infrastructure may be built as part of the EIR program - consistent with our 'civilization under construction' approach. The infrastructure is used for further training purposes, such that the EIR receives an immersion, lifestyle investment experience that fosters responsibility and authenticity of their development. The first three months are in training, and infrastructure building, time-binding the previous EIR's learnings.
Values and Expectations
- Focus. The single and unequivocal focus of the EIR Program is to create Distributive Enterprises.
- Topics. Distributive Enterprises should focus on the 50 GVCS Machines and related enterprises. Related enterprises should cover topics that help OSE move forward on the OSE Roadmap.
- Values and Goals. OSE expects that a candidate's values are aligned with the greater goal of OSE, as painted most broadly at the Roadmap page.
- Priorities and Sequencing. OSE expects that EIRs plug into the program of OSE, and that they apply only if their interests overlap with those of OSE. As such, EIRs are expected to piggyback on the current work of OSE which is enabled by OSE's infrastructure. This is also a strategic approach that allows startup costs to be lowered by using the infrastructure that already exists. EIRs who would like choose projects that are not current priorities or which are not on the Roadmap would be able to do so only if they have a compelling case for how their work strengthens the current priorities, sequencing, and overall roadmap of OSE.
- Bootstrapping. The baseline expectation is that EIRs architect a program that can be supported by an existing DE until revenue begins flowing from the new enterprise that is being created. As such, the EIRs can phase out the initial DE, and replace their financial sustainability with the new DE. The EIR should attain profitability on the new DE that is being developed within 6 months (or 12 months), with reference to all the startup costs incurred by the EIR and by OSE. A replicable revenue model should published after 6 months. We are assuming that the EIR is able to function in a lean environment, where infrastructure and results are improved gradually. This further implies that the candidate understand the concept of Economic Time Binding. The rationale for this is that such a bootstrapping model is infinitely scalable, pending proper management - thus being consistent with the creation of a new economic system worldwide.