The Economic Advantage of Open

What is Open

Since there has been a lot of confusion regarding the word 'open' since the dawn of the word in 1991 with respect to open source software - we start with a definition.

Open in the OSE sense refers to open, collaborative, and distributive - in terms of starting with open means to economic ends.

Open in the OSE sense means, as contrasted with industry standards:

1. Open design - as opposed to patented or proprietary design, we publish design guides and the resulting designs in open source, modular part libraries that can be remixed and reused in a construction set approach.
2. Open collaboration - using methods developed in open software, collaboration can now be global, permissionless, and effective - as opposed to in-house teams with limited resources
3. Open source software - the software that we use for design is open source, so that it is extensible, modifiable, and immortal - as opposed to at risk from vendor lock-in. For example, we can build custom design workbenches in FreeCAD to automate the designbuild CAD-CAM-BOM-instructionals process, readily.
4. Open enterprise - documenting the economic flywheel, operations, production engineering, business model and strategy - to allow for franchising and independent replication
5. Open education - given the multiple skill sets required for more sophisticated enterprise - and foundationally a high level of collaborative literacy - rapid-multimodal-interdisciplinary-applied-augmented learning is required. Instead, we get siloed, specialized, unapplied learning in college or tech school. See Integrated Education.
6. Abundance - the discipline of production that is both effective and humane, as opposed to the win-lose industry standard of dominant scarcity-based economic models. This connects to open in that know-how is the key to effective production. Open implies abundance, or the possibility of people pursuing their true purpose because survival in no longer in the way of their progress.
7. Level 6 Leaders - the state-of-art in the corporate world is the Level 5 Leader as proposed by Collins in Good to Great, marked by humility to do what it takes, beyond themselves, with indomitable will, for the sake of the organization. If we add openness and inclusivity to this, the Level 5 leader must transition to level 6 - an equal interest in pursuing the dissemination of their best practices to the rest of the world. Ie, leadership which takes their organization from proprietary to open, inclusive, and collaborative. This allows the company - and all companies - to build upon the sum of all human knowledge, as opposed to hoarding the best practice while enforcing general mediocrity on the rest of the world by not sharing best practices. This requires open design, collaboration, education, enterprise.
8. Product Ecosystems and Integrated Design - once products start becoming really good - because of open, collaborative design, they turn into modular, interoperable product ecologies with reduced barriers to entry. Hence, open-collaborative is nearly synonymous with such ecosystem evolution. This means Integrated Design feeding Integrated Enterprise with a purpose.

Open In Housing

Open in housing means:

1. Collaborative design of new house models
2. Import substituion of raw materials, feedstocks, components by introducing more advanced, open source machinery that enables the production of these on a more local scale
3. Open source contruction machines and tools - cost control of supporting builder tools
4. Open enterprise
5. Integrated Education - integrated rapid learning, hands on
6. Open culture - focus on the open, collaborative culture as a way of life towards the larger question of solving pressing world issues.
7. Open design ecosystem - software, design automation
8. Automation - robotic and AI assist in materials production, house building, and site preparation

Proving the Economic Advantage of Open: The Case of Housing

OSE proposes that open practice has significant advantages over the proprietary industry standard of scarcity-based business models.

Can we prove this?

First, what do we mean by prove? It means to show, unambiguosly, that the economic output and its quality of open is significantly better than the proprietary status quo.

In numbers, this can be summarized as 10x advantage.

Is it fair to compare the number of companies making $1B today (10000) [1] - and those after the OSE way is introduced?

Since we are about distribution of economic power, looking at large corporations (above $1B) seems inappropriate.

Appropriate, philosophically, would be the proportion of people who are entrepreneurs vs employees. And therefore, significant rise in productivity everywhere towards a prosperity. Perhaps the best comparison is Japan: [2]

However, rather that rise of GDP or billion dollar companies, OSE is interested in the type of company that is born: open or closed. OSE model implies concepts of critical mass, post-scarcity escape velocity, and Distributed Market Substitution. Simply: the market share in any given area - of open companies vs closed..

That is - is the market share of open companies - specifically defined above - at a certain point of escape velocity - simply tending to displace the proprietary companies, rapidly? It cannot be 'partially open' split-the-difference entities - as we need to go all in to succeed.

How rapidly?

OSE Seed Eco-Home says 24 person operation in one year after model is developed - meaning 50 homes or $5M per year. 'Model being developed' includes rapid learning materials for scalability - which enable a new entrepreneur - an average person - to establish a $5M operation in 4 years. And then get to the actual $5M in one year from graduation. This is based on manageable crews of 24. Thus, after the first 24 person operation is developed, 200 students can be taken to $5M in 5 years (200x is about 3x annual growth). That is $1B in collaborative, distributive revenue. In our model, the Distributive revenue means further funding for the product improvement flywheel, guaranteeing high probably of distributed market substitution.

In short - in a 5-10 year period, any entire industry (say housing, tractors, and up to semiconductors) is substituted with an open, collaborative counterpart.

Shortcoming: there is a significant difference between $1B net from 200 students each running their 24 person franchise - and an entire industry like housing - which is more like $100B net (million new homes in the USA [3]). So in the above case, we are still 100x from showing distributed market substitution. However, if we measure the number of housing startups at the 5-10 year point - and if they are all choosing open vs. proprietary - then we have proof.

How completely must Distributed Market Subtitution take place?

It seems to follow that if the open way is as good as proprietary, then half of all economic activity in a sector should be open. For housing, that would mean open enterprise combined takes about $50B net revenue.

However, the above is the 'just as good as' scenario. This means that either works - neither has a particular advantage. We are convinced however, that the open result is by far superior, say 10x. Thus, the market share of open should be about 80-90% open.

Summary

The advantage of open collaoboration in housing can be measured by:

• 80% of new housing production capture in 10 years from model integration including rapid-learning integrated education to demonstrate clear Distributed Market Substitution as a manifestation of the collaborative advantage.
  • Note however that this can also be stated as 51% of new entrants in the marketplace adopting open enterprise, then in time this results in domination.
• Shift of work pattern from employees to entrepreneurial producers. Even if one is hired as a builder, one also can manufacture parts or get involved in many other supporting productive enterprise within the ecosystem because the Integrated Education program with no glass ceiling is built into the Seed Eco-Home enterprise model. We thus achieve an 80% share of entrepreneurs compared to 20% employees in the field of house building.
• 80% reduction in patent filings related to construction materials, tools, machines, and techniqeus directly related to the housing industry