SEH Revenue Model Development
Apprenticeship Promise
$33k apprentice carpenter, MO. [1]. Average USA rate is $32k/year [2]. Carpenter apprentice salaries in Missouri can vary between $17,500 to $60,500. Standard carpenter apprentice is paid up to $30/hr. That is tops. Paying $30/hr would be acceptable for OSE with high likelihood that we would be the preferred workplace in construction. Standard carpentry apprenticeships are 3-5 years. We offer 6 month training, with earning as soon as you qualify for all the tasks. We start in the middle, you rise immediately to the top as soon as you test out.
But, if you look at Zip Recruiter - $63-67k is the top 2% pay range - considered 'outliers'. This translates to $32.8 per hour. For OSE purposes, let's start at the outlier pay scale - $32.8 [3]
OSE milestones - perhaps starting not at $25/hr, but $35/hr taking one from average to top tier? [4]
Commments
MJ sez -
Do we have specifics? I think the guarantee to her right now, pending December results, is that we have a '6 month apprenticeship program from which graduates are guaranteed top 2 percent pay in the industry'. I'm going by this - https://wiki.opensourceecology.org/wiki/SEH_Revenue_Model_Development#Apprenticeship_Promise
1. You have to 'pass the test' or test out - showing you can do all the build efficiently. Evidence for is our optimized designs, which simply produce more value in less time.2. December build proves the economics of $32.80 per hour when successful.3. That is only the beginning - continuous learning options exist to management and leadership roles
Jonathan Miller Oct 20, 2022, 2:02 PM (21 hours ago) to me
Something like that—I would just add that the 6 month apprenticeship establishes the revenue and foundation to create a 2-year DoL registered apprenticeship that is more expansive. The ARPA grant is designed to fund us as we get this off the ground. By specifics, I’m referring to the fact that she has only really seen your TED talk. So you don’t need to get too detailed. We’re trying to train the workforce while producing open-source hardware at the local level. Hopefully the conversation springs from that. Otherwise, we can postpone until you feel more comfortable. I know time is short.
Narrative
We have a different type of operation, as we are a digital, Truly Replicable Enterprise. Thus, we compress the training period 3-10x, we 10x the top percentile. Ie, we _start at_ the top pay.
Digital design allows for efficiency.
A typical homebuilder hires out all the trades, and their efficiency is likely 2-4x lower in the build. Thus, the labor cost in the OSE model is likely 2-4x lower. By design, we have a simpler house, which is say 2x efficiency. Integrated design may be 2x efficiency. 4x efficiencies should be achievable on the build.
But everyone works with the same materials. Producing materials is a game changer - likely 2x in cost. Block, concrete, lumber, 3D prints from trash, and steel.
Once our 1000 sf model is stabilized - we expect to achieve a price point that will be a clear winner in most cases, for DMS.
What is a realistic cost of build? $30/hr is high end of carpenter apprentice pay.
We can do corporate training, edutainment, and volunteer work to generate publicity.
But the main way has to be scalable.
The scalable route is one of paying real workers. The disadvantage is that there may be a division between worker and manager. The resolution of this is simple: you have an option to move up in management. Thus, we expect lower but highly comepetitive pay for those who don't assume much responsibility, but higher pay for anyone who chooses more responsibility. And there is no glass ceiling in our game - it is all performance and merit. Can that really be true?
Construction Manager
For us, we have an in-house Construction Manager, and a track for their training. They may be hired staff. If they are paid $100/hr, that is $192k/yr. Very competitive - can get experienced managers in, or train them.
Thus, if we are taking 1000 hours with 24 people in 4 days, the cost per build is $4k.
Our construction manager would be multiskilled - including working with real estate due diligence process, sales team, and designers. They most fundamentally have to schedule, source, work with crew leaders. Crew leaders get higher pay. Construction Manager is the highest role on execution, and likely a role of highest flight risk.
To mitigate flight risk, we must consider a team based on continuous skills development, where the role is divided between multiple builder-collaborators. No specialized roles, but people get good at their respective role. To the point that each build crew is self-managing. Proper incentives here would be 50/50 revenue share between build crew and OSE. Each side's improvements are beneficial for both sides. Both sides receive the upside of improvement.
Thus, the revenue model should look like this:
