Ecotechnology Buying Club

Ecotechnology Buying Club Product Development Funding Model

Basic Goals - OSE Product Cycle

OSE's Product Cycle is an open source physical product development process. The basic goal is to deploy Core Teams to work on a large parallel development of physical products, and to create an associated funding model. This process aims to develop: (1) open source ecotechnology; (2) mass production-scale production by the masses of these technologies; and (3) economic transformation towards abundance in the selected products. Sounds like a fairy tale, but here's a program in development.

Orgnanizational Strategy: Building on the Wikipedia Model

Theory: Goal is to develop a development process for physical open source ecotech products, based on the successful model of Wikipedia. Let’s examine how our model is similar- what we could learn and what we could build on.

Wikipedia takes and eats everything from everywhere. Wikipedia relies on a large number of contributions, in the millions, that is distilled by a core team of about 100 very active distillers. Thus, a large number of entries, on all topics, is collected and refined. If people write content, it is not difficult for the distillers to organize it. Indeed, if people add content, the distiller can be ignorant of a topic, yet learn from all the input, and put together an amazing article by riding on the coattails of the contributors.

Great acceleration of development occurs when others contribute to an effort. (I’ve seen this type of effect with the Boundary Layer Turbine and Dan Granett. All I had to do was to propose specifications. He designed the turbine, and provided beautiful drawings that captured all the design goals.) OSE Product Cycle (OSEPC) does physical products, which take more energy than information products. The difference between Wikipedia and what we want to do is that we do not want millions of contributions on random topics. This is because the information itself is not the endall in our work, whereas information is the endall in wikipedia. Wikipedia gathers information only. Our project takes the additional step of translating information into physical products. That requires much more energy: designs and their refinement, money for materials, physical fabrication, testing, and refinement cycles to improve products. In wikipedia, all those refinements are made on paper. In OSE Product Cycle, refinemens are made on paper and then every refinement is tested in physical manifestation.,

OSEPC does not want to eat everything from everywhere. Because it is much more difficult and expensive to do physical work than information work, OSEPC needs to be selective on what it takes in. Indeed, a rigorous process has been coined in our proposal for choosing which technology is selected – see Product Selection Metric in our 3 Year Proposal.

OSEPC is similar to Wikipedia in that once an entry (product) is selected, a general information structure can be proposed to complete the entry. Thus, OSEPC selects particular products, and then selects very particular things that it wants to know about each product. This we shall call the information structure. The formula for the information structure for a certain product may be defined, and in this sense, the OSEPC can model itself on Wikipedia. Like a news article – with its 5 Ws: Who-What-Why-Where-When – an OSEPC entry can have its own equivalent to the 5 Ws.

It is important to define to what the information structure is applied. It is important to define to what the information structure is applied. For OSEPC, the structure is applied to each cycle of a product. Then we must define cycle. Cycles refer to OSE’s distinct program for developing a product, for developing fabrication capacity of that product, and for replicating the production of that product. The cycles are:

1. Prototype
2. Prototype 2
3. Fabrication Facility
4. Optimization of Fabrication and Prototypes
5. Recruiting and training a fabricator
6. Production for external markets
7. Replication

These cycles may change with our experience.

Funding is a critical issue that must be resolved for open source physical product development. Metalevel issues include how the above development cycles are funded and how products are delivered. This has some limited parallel in the Wikipedia model, since Wikipedia does not need funding for physical products. The only place where funding enters in wikipedia is to support its key technical volunteer and pay for server space, which is on the order of $20k/year.

OSEPC requires a refined funding machanism. Wikipedia uses online, voluntary funding to support its effort. This is a simple process, where a donation basket is utilized. It is not advertised, outside of a passive reminder on the Wikipedia site. OSEPC needs a much more evolved funding mechanism. Funding on the order of $15k is needed per product. We have on the order of 20 products to be developed, for a total budget on the order of $300k. The likely timescale for deploying these 30 projects is 2 years. Fundamental difficulty of OSEPC is credibility to motivate funding. OSEPC goes through a due diligence and design phase to specify product deliverables. Due diligence also has to address feasibility, ecological sense, and it must evaluate the benefit to making a prosperous society. Fundamentally, product development up to the definition of a clear deliverable must be rigorous enough, including a peer review process, to make it credible to the potential supporter. The presentation of facts must be clear enough, and comprehensive enough, to warrant credibility and motivate funding. We are relying on peoples’ desire for easier lives, better products, and desire to improve the world through improved economics. Is there a parallel to Wikipedia here? Wikipedia is now in a position that warrants funding on the order of $20k per year. Wikipedia has gained this credibility by its good work at producing a respectable encyclopedia.

Research by the Core Team and a track record addresses the credibility issue for OSEPC. To address the credibility issue, an extensive research process must take place, and that’s where the Core Team enters. The job of the Core team is to produce the research and validate it via review. The track record of the Core team, such as the existing CEB prototype, help with the credibility. Successful completion of projects guarantees credibility. OSEPC budget is specified from the development process itself, so long-term detailed budgeting is not possible. Monthy product cycles are utilized to maximize accountability. The challenge in OSEPC funding is that a detailed budget must be prepared, but this budget is created only as detailed prototype designs emerge. Thus, it is not possible to determine a long-term budget to any detail. To address this, we are pursuing monthly budget cycles. This addresses accountability, as people can see within a month whether promises have been delivered. Maximum collaboration is attained by identifying and soliciting stakeholders. Stakehlders are sought to be funders. If stakeholders are personally interested in a product, whether as DIY producers, buyers, or producers for external markets, then they are likely to contribute. The goal is to define who the stakeholder is, and if it is difficult to determine the stakeholder, the product presentation may have to be rephrased to attract stakeholders for other reasons. Stakeholders should be involved in the development as much as possible – at best by joining the Core Team for a particular project.

Internet Platform Design

We are developing an internet-based social enterprise platform to help organize the open source product development process. Here are some notes on the design of this interface. This is to be applied to all the products shown in the Overview.

A Projects button on top that takes you to all the projects. Organize Projects by particular Products. Have a Benevolent Dictator in charge of identifying Products and Core Teams. Proper product selection is verified by the ability to recruit a Core Team. The seven categories at the wiki Overview are the general categories, but presentation of the development is organized most practically by Products, since individual products are our goal. These products also combine to a product ecology, but the developers don’t need to be concerned with it for simplicity. (The detailed product ecologies are discussed in our [ http://openfarmtech.org/OSE_Proposal.doc 3-year proposal].

On the left hand side of the enterprise platform, have the following, in order of importance. Each of these should be on a wiki, so that they can be updated readily as new versions arise. Older versions should be archived, and only the freshest material should be visible.

PRELIMINARY WORK

1. Core team – this is a listing of all the people working on the central orgnazation team for developing a particular product. There interests and qualifications releveant to successful delivery of product are listed. Roles of the members on the particular project are listed. Contact information is given for people to ask questions.
2. Preliminary specifications – these are visionary, high-aiming, ecological, and integrated – and are altered if practical issues dictate lack of feasibility. These define the initial direction, and also are not airy, but backed by physics and engineering.
3. Feasibility analysis – analysis of what is possible as a motivational basis for pursuing the project. For example, we may start with the fact that each acre of land receives 4 MW of solar energy as a motivation for deploying solar concentrator electric projects. Because we are typically proposing better and new solutions, we need to prove to the audience that we are proposing improvements consistent with human and natural constraints.
4. Ecological review- while feasibility analysis focuses on the inherent qualities of a product being sought, the ecological review focused on comparison to other options: (1), various comparison to other products or means of achieving the same purpose, such as performance, cost, ecological features, etc.; (2) advantages and disadvantages; (3) ecological properties, (4) human factors, (5) localization potential, and others.
5. Design rationale – this is the preliminary design, such as simple diagrams. See the example of the design rationale for the swing-blade sawmill.
6. Development Log – this keeps track of discussions between Core Group members and posting of distillations, such as results of discussions with external contributors.
7. Discusssions – a separate category from the Development Log which keeps track of discussions with external information sources.
8. Design Drawings – isometric and other drawings that explain products, but lacking dimensions, thus falling short of technical drawings

REFINEMENT STAGE

This is where actual prototype designs start to take shape, in preparation for fabrication.

1. Technical Drawings – drawings of any type, in 2 or 3 dimensions, that also show dimensions, and thus enable the translation of the drawings into exact physical forms by some means of fabrication.
2. Bill of Materials (BOM) – an itemized list of parts necessary for building a prototype or product
3. Equipment requirements – any equipment that is needed to fabricate, test, or ther the prototype in-house
4. Bids – bids are solicited by the Core Team for fabrication, materials, or other purposes. Typically this is 3 bids, but it may be any number until the Core Team decides that a reasonable quote has been obtained.
5. Budget – based on the BOM, equipment requirements, bids, and any other overhead, a budget is proposed for presentation to funders
6. Peer Review – this is a critically important feature of our work, where we solicit all credible and helpful individuals and organizations for feedback on our designs, performance specifications, cost predictions, human factors, and other aspects. The goal is to have an unquestionably unbiased third party review our work to make a more convincing case to funders.

FUNDING STAGE

1. Funding team recruitment – about 25 people are recruited to point people to our development and funding website. This recruitment begins during the preliminary work stage, and continues until 25 people are aligned. The goal of the funding team is to send 1000 people to the website per week for 4 weeks, or until the desired sum is collected. Each week, the Funding team will regroup and reorganize, to refine outreach strategy. The key is to identify interested groups and work through networks, such that a large number of people could be reached. With the above formula, 100,000 people will hit the site, and if 1 percent of them donate, then we are successful. The strategy here is to find 25 people of high social ranking on the internet, so they could work through their respective networks. The people from Global Villages Yahoo group, Minciu Sodas Laboratory, Wikipedia, Appropedia, Worldchanging, P2P Foundation, How to Save the World blog, and others are prime candidates for the funding team.
2. Funding – Once the funding team is recruited, preliminary work has been done, and refinement stage have been completed, the Funding Team solicits their contacts and networks. This continues until funding is collected, but no longer than 4 weeks. Initially, we will be utilizing Fundable.org as a turnkey solution for project microfunding, with 7% overhead cost. We will replace this as soon as an open source solution is programmed into our social enterprise site.

PRODUCT DELIVERY AND TESTING STAGE

1. Delivery. Upon successful funding, the prototypes are built at Factor e Farm or outsourced and delivered.
2. Testing. Upon completion of the prototypes, they are tested. Once sufficient test data is available, the next development cycle is begun.

DEFINITIONS

• Contributors- people who contribute information
• Funders – these are stakeholders who contribute financial resources or in-kind materials. We are pursuing collaborative, voluntary micro-funding from distributed stakeholders, where we solicit a large number (such as 1000) of people for small amounts (such as $5) to distribute risk among a large group of interested people. The funding model may be compared to a buying club, where people chip in a small amount to get a product at better price.
• Stakeholders – people who are committed to the project, such as Funders and Core Team members.
• Core Team – those who sign up to be the core developers of each product, mainly by performing the due diligence to motivate Funders’ contributions, as describet at wiki Core Team.
• Distillation – any re-presentation of information that adds value towards developing products in the OSEPC. Re-presentation is emphasized because all knowledge already exists, it merely needs to be uncovered or presented again (re-presented).
• OSEPC – Open Source Ecology Product Cycle – the general name of the development process that leads to (1), products, (2), fabrication facilities, and (3) replicability of the former two.
• Outsourced –requiring expenditure to procure
• In-house- the opposite of outsourced, this refers to anything done with voluntary labor and donated machinery, such as fabrication done by volunteers or Core Team members
• Volunteer – anyone acting from their own will. This term, as used by OSE, has nothing to do with whether the person is receiving compensation or not. This is to distinguish such action from action that follows compensation for alienation. Our test for voluntary action is whether the action makes the actor happy, a demanding requirement.

FAQ

The claims made in responses to the questions posed here are several years out of date. While some have been met, others are still in progress.

1. The product that you are proposing is absolutely amazing. How do I know that it’s not a paper tiger?

Our core team has evaluated, researched, and designed the product thoroughly. You can see Core Team credentials on the development site, so you can judge for yourself. You can study the development process carefully and verify all our designs, data, and extrapolations. All of our work is based on prior art, and it can be found in the literature. Moreover, our conclusions are peer reviewed and validated, with any discrepancies discussed and resolved in the Peer Review. If you can refute any of our specific claims, we encourage you to contact the Core Team. We are not inventing anything new here, just repackaging what’s already been done.

2. If your predictions are as good as they are, why has no one done this before?

First of all, they have, as we said in question 1. We are just making breakthroughs in price.

3. How do you end up with your new efficiencies for cost reduction?

We are achieving breakthrough costs by collaborative, volunteer-based micro-funding of the entire production process. We are also using a collaborative, open source process to design the products, so our development costs are covered by volunteers. You’ve heard what open source does to reducing the price of software. We have accomplished the same for price reduction with physical products. It’s like a buying club of sorts: people got together and chipped in for a production facility, and they got a lower cost, higher quality product at the end. It sounds simple, is simple, and it works. It’s amazing that no one did this before, but I guess it takes time for the power of the internet to blossom.

4. The invisible hand of the market already organizes the economy for maximum efficiency. Your drastic reductions must be bogus.

The modern economy is far from efficient, if one takes an integrated perspective. The economy is efficient only in some aspects. It is efficient in causing upward flow of capital, but dismal in terms of creating prosperity for all. We are using this inefficiency as a business opportunity: we developed a process by which we can focus on products that promote a high quality of life, and are economically viable at the same time.

5. What is this business model of yours? You got a bunch of people to pay for your production facility?

Yes, a large group of people chipped in for the production facility, but there’s no free lunch in the deal. Our contract is to provide a product at an agreed-upon price. The cost is the price of materials plus labor at $50-100 per hour.

6. Let me get this straight. Others paid for your production facility and you’re ripping them off on top of that?

Just compare us to the competition to see that the funders really gained by supporting our development. Let me explain. The funding process produced a state of the art production facility with advanced equipment, and now we have a couple volunteers lined up to run the production. We also refined the process to the point that production is absolutely optimized. Combined with outstanding design in the first place, this means that buyers end up getting our product at about 8 times lower cost than the competition. We are charging just for materials and labor. Our labor sounds expensive: $50-100 per hour of production. But if you consider that our process is optimized, we still end up with a product much less than the competition. It’s amazing. It shows how much waste is out there: competive waste, development costs for reinventing the wheel, debt service, labor, overhead, you name it. You see, all the capitalization and development costs were eliminated for us, so now we run a lean and effective operation, and the buyer gets unsurpassed product. We use only lifetime designs, where maintenance is easy, and our service is unmatched: complete online documentation, availability of parts, etc. And if we ever go out of business, no problem for the buyer – all the parts can be sourced readily elsewhere.

7. This blows my mind. You organized a bunch of people to develop a product and fund a production facility, and you got volunteer labor out of the whole deal?

It’s better than that. The volunteers actually end up paying us. They are apprentices in training, and they will be running our facility until they learn enough to go on their own. We will still run the same production line, but it will be one of many products that we make in our flexible facility.

8. I still don’t believe it. How do you get a bunch of people to fund a real fabrication facility? It’s too much money and it takes too long, and the people never really know if you will deliver. This must be a hippie dream, not the hard stuff of today’s economies.

That’s right, there are no promises, but so far we have exceeded our expectations. The full time from the start of development to a product is about a year. Yet, we did manage to get support because the price was right. Our average contribution was $7! That means huge sharing of risk from many funders. We did thorough research, and we made the funding cycles monthly. The process is transparent, so people saw progress on a monthly and even daily basis. Getting so many people aligned wasn’t much of a problem because we are developing products that have huge markets. We’re not talking about personally-engraved back massagers from Shinto priests, we are talking about renewable energy systems and cars. We also heard repeated feedback that people heard about us from respected third parties and felt confident that the deal was for real. This economic model appears to be a hit, so we’re going with a whole set of products in parallel development.

9. Ok. Let me make believe for a second that all of this is true. If there were thousands of people who contributed to your effort, that means that you will have to produce thousands of machines to fill your orders?

Not everyone who contributed necessarily wants to buy our machine. Even if they do, we are ready to scale up. We have present capacity to take in five fabricators. Our optimized process takes 20 hours to fabricate a single unit. This means that we’ll be cranking out 10 machines per week. So if we have 1000 machines to produce, it would take about 2 years to fill all orders, without even expanding our present capacity. We really don’t know what to expect – it could be a few dozen or a few hundred - because we think that it’s easy enough for others to enter and capture some of the market. That’s fine for us, since we’d like to move on. We’re interested in using our proceeds to accelerate other product development. We are also interested primarily in serving our local bioregion.

10. But what about maintenance costs? Your advanced production facility surely has high maintenance costs, just like all advanced technologies. How do you control your maintenance costs?

Don’t confuse so-called advanced technologies with appropriate technologies. Our facility technologies happen to be both advanced and appropriate, by design. All the machines that we use in fabrication were developed and built in-house, as part of the product development. And, as will all of our products, we designed our equipment for the easiest maintenance, longest lifetime, and design for disassembly. We’ve thought long and hard about what makes technology truly useful and appropriate to people, as opposed to controlling the people by its maintenance requirements, complexities, and costs. We observed immediately that off-the-shelf equipment does an abysmally poor job at being transparent, easy to service, and low maintenance. This is inherently impossible if the machines are proprietary. That’s why we developed our open source versions, and it turns out, as it does over and over, that the open source versions beat the socks off their proprietary competition. Are maintenance costs are minimal, and when anything goes wrong, we are able to fix it immediately in-house.

Issues and Solutions Regarding the Ecotech Buying Club Funding Method

Here we present the challenges and solutions to our distributed funding effort:

Issue #1: Branding – We are an unknown effort without a track record.

Solution: Our farthest achievement so far is the CEB prototype. The P2P Foundation review of our method is our strongest third party review to date.

Key points to work on:

a. Create a brand logo for the ‘Ecotech Buying Club,’ neocommercialization model. It should portray both the serious and light nature of the work. The serious nature is the transformation into abundance economics. The light nature is poking fun at the system: mushroom clouds, armies of grunts, drug trade, government corruption, crap jobs, keeping up with the Joneses, etc.

b. Prepare and prioritize a list of networks that we should work with, and the contact people (leaders) of these networks, who have large audiences and are widely respected.

c. Recruit the support of widely respected, social network leaders: How to Save the World Blog, Worldchanging, P2P Foundation, peertopeereconomy.com, Social Synergy, Frithjof Bergmann New Work movement, Minciu Sodas, Global Villages, Catherine Austin Fitts ethical investing circles, Howard Rheingold, Wired Magazine, Mother Earth News articles, Team UK, etc.

d. Prepare a good introduction email to these people

Issue #2: Funding team will not be able to attract enough attention to make a sufficient number of people fund the effort.

Solution: Recruit social network leaders to be the funding team. Those leaders are suggested in 1b. above. The commitments that we must obtain from the leaders are: (1) read through the Ecotech Buying Club model, critique it, and ask any questions about things that don’t make sense. (2) Write a review of our work and publish either on their own media or on our social enterprise platform (Social Synergy). (3) Circulate an email to their audience asking them to contribute. (4) Have leaders do one funding request, or continue working towards the completion of the project with monthly funding requests.

Issue #3: The stakeholders have enough bills already. They will not squeeze their wallets for the effort. Solution: We are asking for donations of a few dollars each, such as $5, and it could be more or less. That constitutes wide sharing of risk. Moreover, the benefit to the funder upon successful completion of the project – in the low price of the product - is much greater than what they paid. This is an example of a twist on the Buying Club concept. Issue #4: Funders have no guarantee that the product will ever arrive. Solution: We proceed to request funding only after significant research was performed, such that funders can be confident. Moreover, in the later cycles of funding, it becomes obvious whether the Core Team delivered what they were promising. The feedback cycles are monthly, as the funding cycles are monthly. The hardest part is to simply get the ball rolling in the first funding cycle. The first cycle must be motivated by some visible results.. We believe we got the ball rolling by contributing several thousands of dollars of value to create the first CEB prototype.

Issue #5: You cannot grab peoples attention sufficiently to invite them to fund. Solution: Use reputable 3rd party invitations, as discussed in Issue 1.

Issue #6: We are a fly-by-night effort. Solution: Not if we can succeed in motivating a number of reputable authorities to endorse our effort by reviewing and critiquing our work and economic model.

Issue #7: Overhead of fundraising is greater than the resources collected. Solution: The effort is done entirely by volunteers. We are leveraging the help of supportive social network leaders. The collection mechanism is online, with a 7% fee if we use Fundable.org, but this cost may be reduced or substituted so that we manage the fundraising mechanism in-house. Moreover, we are beginning with products of universal appeal – such as renewable energy systems, affordable building methods, etc – such that the good nature of our work plus wide appeal facilitate the funding process.

Issue #8: We are competing for attention from a large number of sources. Solution: Our product propositions are attractive – not speaking from self-glorification – but from a wide, expert, peer-review process. If we find that a proposition does not have significant merit, then we will drop it. We believe that there is a core set of eco-technologies that are in wide demand, but no one has managed to bring them to market because of costs and other sociopolitical reasons. We are confident that we have identified this set of technologies, or at least some of them. We also have our Product Selection Metric - see Section III of our 3 Year Proposal- for review by the leaders. We are bringing a high-level discussion and program to the table, and we believe that the leaders will be able to understand it. We do agree that the concepts we are proposing are radical and hard to grasp at first. That is our greatest challenge – to simplify the explanation of the program. We still believe that we will have the support of a wide range of leaders, since those leaders typically have enough perspective to determine whether an argument is sensible. The same leaders will help us to simplify the message to supporters. If we can grab the attention of leaders, then we can grab the attention of their audiences. The more leaders we enlist, the more different approaches they can provide to explain our work.

Issue #9: The facts seem to line up, but this still looks like an exaggerated fairy tale promise. Solution: The concept here transcends economics of scarcity, recorded and instilled in written history for thousands of years. It is difficult to even imagine that a different program is possible, without looking deeply into oneself to understand the limits of physical resources, the limits of human psychology, and new evidence from the information age. To believe our story requires an open mind initially, what some may call spiritual evolution, but in a few years, we believe that these concepts will be commonplace as sheeple begin to follow the trailblazers of this movement.

NEXT STEPS 1. Present the Buying Club of Ecotechnology economic model. 2. Gather and prioritize a list of social networks to help us fund development 3. Contact network leaders. 4. Begin with recruitment of Core Teams 5. Continue to funding and deployment steps 6. Do parallel development on CEB, Torch table, and Sawmill, recruiting core team members as we go along. 7. Get the social enterprise website set up.

Other Steps: 1. Develop a better internet working platform, design started below. a. Produce an introduction page on the enterprise platform 2. Recruit people for core teams on each of the products. 3. Start development of Ecotech Buying Club , and fund it via collaborative microfunding 4. Deploy fabrication facilities 5. Replicate by training others

See Also

• Distributive Enterprise
• Contract