An enterprise type that OSE is developing is a sole proprietorship that uses proven and optimized techniques, to create a robust enterprise that can support a person with at most a 25% time commitment (2 hours per day). This is the OSE Founder's promise in the Open Source Philosophy video:
That is the desired case. For typical cases of enterprises started at Factor e Farm as part of EIR enterprise development, a replicable enterprise should:
- Be open source, otherwise, the next person is reinventing the wheel
- Have clear value proposition
- Be bootstrapped on very little capital.
- Have a clear product strategy, clear market definition, and clear marketability. Large markets help here, and the easiest way to marketability is product quality, reasonable cost, and a good experience.
- $15/hour absolute earning minimum. Compare to median wage of $25/hour in the USA . Minimum wage hourly earnings ($7.25-$10 for states in the USA , and up to $15 in certain cities like Seattle ) define the rock bottom on the wage scale and it can be assumed that this is largelyl unskilled labor. OSE enterprises are typically far from unskilled labor, and the hourly wage should in no case be lower than the highest minimum wage.
- Clear executive summary (concept)
- Low startup cost. Phasing should be such that further growth is financed with cash flow, not startup capital. This makes for a bootstrapping enterprise that can be started with little capital. $1000 is a good startup cost maximum, which would allow rapid capitalization from various sources.
- Time to breakeven should be manageable, and no more than 3 months. This means that the startup is gradual, and costs do not exceed revenue in any given month.
Rationale for Replicable Enterprise
We are developing open source enterprises. These by definition should be highly profitable, as they lower all costs by learning from best practice.
Nominally, an open source enterprise should be 2x quicker to breakeven: all experimentation and waste is eliminated by open source information. 2-10x more profitable than an average closed source enterprise due to elimination of all waste. Because we are assuming robustness, best practice, and efficiency, the revenue should be typically $25/hour as a good start, and should be $50/hour in an excellent case.