Seed Home 2 Business Plan

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Jan 2022

See also SEH Labor Strategy

Concepts:

  • Methodology: study and build upon industry standards. Worst case scenario can be built on industry standards, and we assume that there is little risk in OSE matching industry standards. However, we like 10x, and look for breakthrough performance. Minimum low-risk performance increase is 2x by simplification of design (2x), and process integration (modular design) (2x), and swarming should add (4x) build time compression based on standard crews of up to 6 compared to OSE standard of 24. Here, we get an advantage of 16x based on simplification (4x) and time compression (4x)
  • Individual value ratio (IVR) should be a minimum of 1 for a an entry level collaborator. This is defined as revenue generated to earnings per collaborator. Collaborator is anyone who works with OSE.
  • Net revenue generated per typical 1000 sf SEH 2 is $25k in a 500 hour + $50/hr model if material cost is $50k and OSE service fee is $50k. Service fee is the charge to the client, without land/legal/utility connection costs. This is at the industry standard rate. See Industry Standard Profit per House.
  • 500-2000 hours per house build depending on skill level
  • 2 houses per collaborator per year (1000 hours per house, or 1 hour/sf) at standard 40 hour workweek. This assumes 100% faster than the industry standard of 2 hours/sf - see Time to Build a House. We think that this is a safe and conservative estimate, given the higher complexity of the industry standard build.
  • In a simple full-time work scenario with a 40 hour work week - a construction worker makes $50k per year if they are paid $25/hr. Average in Missouri is $42k [1]. However, from a human development potential, such a wage leaves little room for self-development. OSE's paradigm innovation is that any work that we create must leave good room for personal development and lifelong learning. One route to such lifelong learning is Voluntary Complexity: living on the OSE campus (FeF or City Block) as part of a community association, with 25% time commitment to learning-by-doing in agriculture and technology to build one's world and to start businesses. OSE infrastructure for this would need to be created with off-grid energy, zero-energy housing, regenerative agriculture, water system, hydrogen as fuel, and other transformation of otherwise mundane infrastructures. This provides a living situation where access to advanced degrees of unschooling allows for high-tech self-providing, which challenges participants and makes them significant contributors to global integrity as a larger outcome.
  • How to incentivize the 'Voluntary Complexity' route of existence?
  • The above can be seen as 'the benefits' of working with OSE are access to additional growth opportunities through education, which qualifies people for more responsibility. This responsibility can be the management track.
  • The other route is higher pay for rising in management roles - beyond simple construction work.
  • In the simplest case - the $50k/year + the Voluntary Complexity route can provide for ample earnings, if one is not in debt and cost of living is low. This route allows for a low cost of living. This is one viable route to FIRE.
  • This could be a basis of an enterpise community - built upon providing essential needs to customers (both collaborators and house sale clients) - in the form of affordable housing. This need will never go away - it's a timeless enterprise. This enterprise community blends learning into it - in the form of Unschooling. But this unschooling is applied - therefore it is highly incentivized by a lifestyle choice of low cost living (Voluntary Complexity). What would be marketable as a lifestyle of cultural and scientific advancement? Good working question: Can average individuals enter on a path of lifelong learning typical of entrepreneurs and academics?
  • Build on 24 person crews.
  • Take scenarios that are highly likely. 1000 hr + $25/hr. This evolves to 500 hr + $50/hr.
  • In operation startup - 1000 hr means $25k revenue for OSE. IVR remains relatively constant - as we are guided by taking care of the worker by allowing lifelong learning for FIRE. Indeed, the interesting question here is whether average individuals perform as well here as individuals of high ability. If we can prove this for average individuals, then this becomes a trillion dollar enterprise in 5 years. Socially speaking, we will have developed an incentive structure for converting the entire world to lifelong learning - and thus Integrated Humans becoming the norm, shifting society to a new plane of existence! This can be a transition to wide replicability of homo deus (a very high performing individual).
    • Practical structuring would be 'optimize your task for unleashed productivity'. That is where engineering, applied computer science, automation, cv, ai, come in. At this level, with open hardware, open money and AI - the convergence is to distributed power because the underlying tech is distributed. But this relies on distributed materials, as without them, we can't do distributed power to society. So here we implement distributed steel, silicon, doping, rock-making, and hydrogen etc as the next economy in each facility.
  • Say we are in startup - we decide on 1 house per year, and rest towards infrastructure for bootstrapping a facility - as a highly replicable route to growing OSE Campuses. Here we can even charge for tuition - $10k - fundable via zero interest or low-cost loans. Say we get a loan of $10k, then generate net $25k revenue - build infrastructure - we repay the loan - we have paid $25k to the student - this seems like it works. We give scholarships. $10k addresses cash flow for producing infrastructure. If we build one house ($50k - 25k to student, 25k to OSE) - then OSE actually has $25k net revenue to allocate to growth. We are designing this to acquire students who want to change the world.
  • Work in groups of 24 students - which is also the prototype community. We iterate community rapidly. We innovate on lifelong learning transformation. Each cohort of 24 is $600k/year net, which is good startup money as a basic unit - with half of that time committed to other activit. If we frame around lifelong learning - of the 20 hour per week time allowance - we can do up to 1 day (8 hr) of infrastructure builds, and and 12 hours of Integrated Human curriculum.
  • In summary - the $600k is not a lot for infrastructure building and operations. But it's a decent start.

Training Program Incentive Concept

  • The college student audience is one target market.
  • U Penn is the highest grad salary at $91k [2] compared to say Princeton at $74k.
  • OSE after 4 years of immersion training is designed to meet or exceed this.
  • Program is structured such that during the program, people set their pay for what they earn, based on competency.
  • The campus is an entity that continues itself, and then creates other campuses elsewhere, such as urban areas.
  • When going to the city, we blend in with the community and upgrade to off-grid agrihoods with open source microfactories.
  • We run an ecology of enterprise that does things more regeneratively. For example, hydrogen fuel vs batteries - what is the actual study of material intensity required?
  • Individuals are selected for desire to 'deconstruct societal systems and synthesizing new infrastructures from scratch.' So as a start we select for less ego and willingness to pursue high performance by audaciously challenging work.
  • If the Seed Eco-Home is the basis, we start first year with construction of affordable housing, we add aquaponics in year 2, city block in year 3, and final project it Year 4 where we build a village somewhere starting from scratch with a 1/2M budget. Practice is 50% of the time, and classroom based on the main OSE Promise of OSE_4_Year_Program#Narrative is the rest.
  • We have 1000 hours for productivity, of which we focus most on rapid learning to make best use of time, so we start building things immediately a la industrial productivity on a small scale. Afforded by digital design. Incentive Challenges are used to generate the IP.
  • Personally interesting activity such as building your own microhouse etc start the program off - a relatively easy project, designed to perfection.
  • There is one primary track of Movement Entrepreneurship, and Collaborative Design is the major concept taught.
  • Exams are practical builds, self-initiated and everything in a class contributes to that. To avoid conflict of interest with peak performance development, we require a minimum performance is internal skills development: thinking, feeling, mental modeling, learning, body intelligence, relational intelligence, communication. A highly refined program that can fit in a 4 year curriculum is defined. May include relevant elements of Outdoor Education, Ranger School, Summer X, Breath and Meditation Training, and Astronaut Training.
  • We guarantee partnership with OSE at the end of 4 years in terms of franchising operations elsewhere. Starting pay is $100 on the construction management track.
  • Needs work - how to reconcile uplifting non-elite students? Continuous pay increase from $25 to $100 per hour. This must be detailed for responsibility level and pay, based on a moving variable of 'time to build' - which is optimized via automation. Thus we collaborate on automation for removing toil.

Dec 2021

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Sep 2021 Planning

  • 12 apprentice model via GI Bill
  • Revenue - $750/person - $9000/month
  • Site manager - $4500/month
  • Site Manager Housing Revenue - $500/month
  • 120 hours/month payment at $15/hr - $21,600 payroll/month
  • Potential of 120*12=1440 hours per month, or 3 houses per month within this budget. Potential of $150k month net revenue after labor costs at $50k/house or $150k selling price with all in cost accounted. Payroll to revenue ratio of 15% in this scenario. Investment goes into development of open source production engineering
  • Gross costs - apprentices + site 26,100/month with 12 apprentices. 9500 revenue or about $16k/month cost. Runway of 4 months at $150k sale price with $50k in materials.
  • Runway - potential of $500k investment.
  • Production - 1 house/month initially - 50k material milestones. Sale price of 150k based on comps. Revenue of $75k to cover labor + profit.
  • What are comparable house prices for homes in the area?

Enterprise Modeling Summary

  • Revenue - housing - $9500/month pays for housing and site management
  • 2 houses per month built at 720 hour time budget per house. Gross revenue after materials - price structure of $50k above costs. $100k/month
  • Payroll - $26.1k/month. Utilities - $500/month utilities not included. $27k.
  • Basic ratio on gross revenue to basic payroll ~ 4:1. Allows for 25% operations and 25% annual growth
  • Projections - Year 1 startup - payroll to house revenue runway allows for 2 month runway for first house to achieve sustainability.

June 2021 Planning - Baselines and Ratios

  • 600 hour build time max. $15k at $25/hr. Average construction worker is $33k/year. $37k for a welder.
  • Irresistable starting offer could be $25/hour starting. The catch is, we train people - this is for the next generation. How do we raise the pay of others?
  • The training part means that we start with people who are trainable, and we are selective. But can we uplift the down-and-out people, or do we ableist? The ideal situation would be uplifting the down and out by providing possibility and opportunity. Do we operate as uplifters? How do we raise the bar for everybody?
  • One way is to provide opportunity where opportunity would be respected.
  • Real solution is long-term - stopping to create more and more crap jobs. Rebuild infrastructure for higher skill. Everyone wants to learn. Start with not producing menial jobs, but ones where possibility for advancement is high and real.
  • The way to think about it is that we require more than others. Not in terms of physical demands, which will still exist - but in terms of restructuring jobs for higher skill levels. Yes, everyone 'cleans latrines' like Gandhi. They have the opportunity to gain wisdom by continuing education. The benefits of the job are continuing education, which must be by one's complete initiative where the incentives produce more enriched people and the people are cultivated, or at least given an opportunity for learning to continue growing and achieving new things. Ideally, we take anyone, and give them an opportunity to become more than they thought was possible. And people will change. It is about providing the right task queue - unless people create their own positive narratives already. One could learn competence or incompetence.
  • We start by providing more, and demanding more.
  • Starting pay would be how much more than average?

Revenue Projections

Narrative

  1. Apprenticeship - 3 months - hands-on training for 50 people, over 3 months. Each person does 3 months of a full build, helping every step of the build process. This is builder training, and it can include technicians, designers, and entrepreneurs. People are selected for their willingness to learn all areas, with backup being just being a builder. Continuing track moves on to the design aspect for modifying blueprints, and then enterprise track. OSE's roles is to provide training, leads, and more. The full track is a 1-year immersion, where a person decides to take on a serious stab at starting an OSE-franchise, and 2 year for an OSE Campus. Perhaps the delivery model is that we do several houses at a time. If we are on the road, the added cost is $33/person easy for double room, adding $1000 per month. If build is 800 hours, that is 12*8=96 - 8 days for a crew of 12. We offer management track as well - construction management.
  2. Trade school builder. $25-50/hr. We simply hire them to deliver housing for us. Pay them at a good rate. Retention? We offer continuing education on new areas of build, such as PV or aquaponics. We offer them a clear advancement and growth track. If the net is $50k/house, we can pay trade school builders anywhere between $15/hr - 50/hr. Details depend on overall cost efficiency, and skill efficiency of builder. We can offer a sliding range depending on what tasks a person does. Training must provide gradual qualification, to match skill set to pay, and provide solid incentives for advancement.
  3. Trade school designer - $75/hr.
  4. Trade school - entrepreneur - they go independent, but we could send leads to them.
  5. Packages - DIY build after our training. Need complete cost structure.
  6. Packages - turnkey build, complete armchair builder. We ask them to do 4 weekends, just so they can enrich their experience.
  7. OSE Chapter - 2 years time - Bootstrapped by you getting jobs after 3 months. Pay $10k for training, we offer you higher pay upon 3 months of training. For OSE, we stay within apprenticeship territory as an education org.

Spreadsheet

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Marketing Model

Tue, Dec 8, 2020

  • One useful model is to recruit collaborators for a state-wide operating area. Then we can target individuals from specific areas in a distributed way, to meet distributed development goals while gathering critical mass.
  • High school counselors esp from disadvantaged areas (lower economic class from all ethnicities) recommend candidates. We offer 3 month training for their area. They may have to travel to the job site. All depends on detailed analysis of ergonomics.

Sat Oct 24, 2020

Based on Enterprise Scaling for Solving Pressing World Issues

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Thu Oct 22, 2020

Based on Enterprise Scaling for Solving Pressing World Issues

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Business Models - Oct 21, 2020

  • Regenerative Solutions at Scale model implies teaching and kits, not houses. We distribute the production of housing.
  • Regenerative - entrepreneurs are created in communities, especially communities with disadvantage
  • Solutions - a new house that costs $50k + foundation, that immediately jumps up in value to $130k. This one says $154k [3]. Point: lot cost is 20-25%, and house build cost is 50% [4]. Rest is extraneous costs including 10% profit. Furthermore, foundations are 10% of construction cost, at $25k for 2500 sf, or $10/sf. But this is for normal homes, so the Seed Home cost should be lower. However, this lower foundation cost may be due to bulk - contractors developing entire neighbohoods, so lower per house.
  • Model 1: reach out to all major cities - to Community Economic Development (CED) organizations. Work with them. Not! Do a startup approach. Work with CED orgs only in so far as references, but regeneration Fund local entrepreneurs to become House Builders.
    • Partner with Chamber of Commerce Everywhere, World, for all cities with around 100k populations
    • Partner with City Government - for land.
    • Startup of OSE Chapter in a given city. Fast track training for local entrepreneurs.
    • Hippies cross subsidize the nonprofit work. But the scalability comes from upskilling locals, where any low-income house builder is required to learn entrepreneurship as part of the package. This is our innovative sweat equity funding - both for building the house, and paying for it so the low-income people stop working at MacDonalds.
    • Start with an Extreme Build in that City - gathers attention and Earned Media
    • Move on to start a chapter or Campus on a parcel of land, as a site of future human heritage: education, production, nature. Build homes, 3d printers, machines. Train the new generation of farmer scientists.
    • Ties to OSE International - these are all allied, coordinated efforts for regenerative solutions at scale.
    • OSE buys land as land trust, and allows only owner-builders. This keeps price of house from escalating.
  • First question for regenerative solutions at scale: what is the cost of a building lot in the USA which can be obtained in bulk?

Cash Flow Planning

Source Budget - [5]

Source Cash Flow - [6]

Source Cash Flow - [7]

Development Budget

The tasks before the Extreme Enterprise Hackathon, in order of priority, are:

  1. [1] New website. Website for $8k. Website Cost. Catarina can potentially do it.
  2. [2] Model Homes - careful documentation of build ergonomics for each module. 2 builds on site, 2 models - basic and souped up. 2 story - allowing also for a raised stage on flat rooftop. $40k + $10k labor each. $100k total
  3. [1] Critical to marketing effort - Tractor + Printer Story - with 3D printer photo shoot emphasizing scalability. Need one full time fabricator, covered already in equipment budget. CNC Torch + Filament Making + 3D Printing. This requires another videographer at $10k for a full month.
  4. One house replication in fully zoned jurisdiction - $50k. Can be after January.
  5. [2] Careful video production - $10k each, during the complete build cycle. $10k ea for $20k. THs is for house documenation video.
  6. [2] product managers - one for each house, one month each. $8k each. $16k total.
  7. [7] machines - $1k each labor + $1k materials each - $14k. Crowd Supply -> HeroX -> Marketing strategy.
  8. MJ for product ownew: machines, houses, Fundraising Package with videos
  9. [1] engineer - to do foundation detail documentation for the build - $1k
  10. [2] Resource Developers/Marketing - combine the videos and production into marketing copy - to get sponsorships for the entrepreneurship track, and to recruit the entrepreneurs. $10k each, 1 month full time each - $20k. Until we generate revenue to sustain them in recruiting for 6 months in 2021.
  11. Product Launch - Ben Kellogg
  12. Nat Geo film - Chris Vivion - Spacestation film studio.
  13. Later phases involve the Book Publisher, which should generate revenue.

What is a compelling product package that allows for the recruiting of Fellows?

  1. Excellent renderings of product
  2. Promo videos - Excellent time lapses and promo video with 2 model homes - simple and more complex. Killer Storytelling with the tractor/printer/cnc torch/plastic recycling. We are solving both for plastic trash and housing.
  3. Product Brochure
  4. Website
  5. Fundraising Package - Entrepreneurs
  6. Marketing Package - Owner Builders


Total Cost

  1. $189k

Product Manager-Based Budget

450 people works as defined by cash flow addressed first year without safety margin (0%), and 16% safety margin over 2nd year.

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Cash Flow

Enterprise Scaling

House

  1. Radical attention to ergonomics detail to optimize build hours.
  2. Ex - cam-locking panels for the walls, and other mechanisms for speed.
  3. CNC router for 4x8 panels to help with window cutouts etc, and for making indoor furniture from the cutouts, which are otherwise construction waste.

Fellows

  1. Scaling plan for OSE Fellows - go global, and still teach support for the USA for cash flow. Starting with Lesego.

Video

  1. Is there a point for recruiting other video companies?

Equipment

10x is easier than 2x. 100x is easier than 10x.

  • CNC Router addition - house panels made easy, by new Fellows who have even more motivation to do this because of integrated product ecology.
  • WAAM addition - spiral staircase, stove, etc.
  • This is a direct derivative of 1" universal axis.
  • Expected budget: $8k * 3 = $24k + materials.

Training

Fulfillment

  • Custom design - for $5k? Less if we have more 'standard models' developed fully, so you pick from a menu.
  • Invest in custom design software where every single option is defined in FreeCAD, and BOMs are generated automatically through a script.
  • Automation of updated design - can reduce customization cost to zero.
  • Develop a training module for students - Custom Design of Seed Home in FreeCAD. Add that to the book.


Critical Cost Items

Minimal Participant Scenario

  1. Success is a balancing act between number of participants - and revenue to fund development. Development costs are only around $1-2M.
  2. With a low turnout (200 OBs) - the program can still be carried out by hiring 100 SMEs. However, 100 SMEs are a low number for the amount of work that needs to be done. I think we need 200 or so technical writers/graphic artists/book publishing people - so we don't have enough cash for this.
  3. We should engage in robust planning. Budget uncertainty of 100%.

Cost Narrative and Rationale

The innovation in the Extreme Enterprise Development Model revolves around collaborative funding and development which allows one to bypass third party funding sources such as venture capitalists or banks. The essence is the direct way to involve stakeholders, in which the stakeholders receive maximum value in return for their commitment. Because this model optimizes stakeholder value - and in an integrated sense - meaning not in a zero-sum game fashion - this model is likely to succeed in the funding of transformative projects. Since today, the system does not like to fund its transformation - only in small piecewise steps - the Extreme Enterprise model allows for otherwise unfungible projects to come to life. Our goal is to create a crowdfunding mechanism - albeit one that produces sufficient resources to actually get substantial work done without resource-scarcity based limitations. For significant impact, the amount of value involved must be in the millions of dollars for a viable effort - the equivalent of decade-years of individual human effort. Specifically - a 2000 person Extreme Enterprise event would yield, if properly executed, the equivalent of 24 human years of work product in 3 days.

In the Seed Home case, our initial goal is 2000 Owner Builders (OBs), 200 entrepreneurs, and a dozen OSE Fellows in Training (FTs).

The OBs fund the effort, the entrepreneurs execute, and FTs scale the effort by training more entrepreneurs.

The OBs typically have a need to meet, and most of them will not be subject matter experts in building. However, they are critical to the crowd-development phase of the Extreme Enterprise. We will have to provide the support and training to OBs. The key there is sufficient support to guarantee success. This support is embodied most in the OBs ability to participate in as many training sessions as they need until they are absolutely capable and prepared.

Entrepreneurs are the key to execution. They can learn as much or as little as they need - depending on their existing knowledge base and how closelyl they want to collaborate with OSE. They will have to learn, at the minimum:

  1. Understanding of modular design and how buildings can be reconfigured. Conditions to be met to modify buildings successfully.
  2. Making small and large custom changes, and generating Bills of Materials accordingly.
  3. Seed Home Design in detail - to support the OB at every step of the build - to provide customer service in the form of consulting to unblock any block regarding actual construction. This involves the ability to build and troubleshoot any of the modules (foundation, floor, skirt, walls, roof, patio, trellis, overhangs, landscaping, PV, biodigester, Utility Panel, Exterior Utility Panel, Kitchen, Bathroom, Aquaponic Greenhouse module. Proficiency is marked by ability to make modifications in FreeCAD and Sweet Home 3D.
  4. Remote Quality Control Procedures - oversight and feedback with pictures and checklists for an Owner-Builder's build.
  5. Details of admissible materials - if substitutions have to be made.
  6. Structural design - how to make sure that the house configuration used will be structurally sound?
  7. How to make modifications in Sweet Home 3D.
  8. Understanding the process of submitting materials to obtain a permit
  9. How to lead a crew. To do this, the Enterpreneur will have a chance to do this at a training workshop at OSE headquarters.
  10. How to organize and manage a swarm build. Publicity, recruting, coordinating, documenting (for distributed quality control), and building.
  11. How to use construction tools such as a cutoff saw and drills
  12. How to lead a swarm build event, with practice at the OSE headquarters.

Extras:

  1. How to build a tractor for earth works and pile driving
  2. How to get a pile driver built
  3. How to get helical piles manufactured
  4. How to contribute to part libraries
  5. How to engage in OSE's large scale collaborative design.

Main outstanding question: how closely do we want entrepreneurs to work with us? Close, or MVP to get houses built? Ideally, we get people sponsored - such as young people to bring the info back to their communities - and they are hungry to build.

Challenges

CM brings forth 2 misalignment issues to be addressed:

  1. Most people don't want to build. Solution: find someone to hire- a buidler, student, family member, etc - hire someone else to do the training. And build for you. There will be additional cost: as much money as you like. Our goal is $10k extra based on refined ergonomics - complete transparency. The Entrepreneur still supports this. OSE does not find a builder for the Owner Builder - so that we eliminate the liability of the builder not performing. If a OB client doesn't even want to find a builder - they may be a bad customer.
  2. For enterprise track: contractors will not want to learn. They just want a cheap house to build to make money. The young and interested student - will not have the money. Best bet: find sponsorships for the enterprise track. Prepare a funding package to Community Economic Dev orgs, Chambers of Commerce, foundations, etc.

If the person doesn't want to 'go through the hoops' of being a collaborative house builder - then it's not a good fit.

Extra House Features

Base program is owner-builder - but if one wants to hire or outsource, they can do that:

  1. Out of the box, the OB does the actual build, personally or with friends/family.
  2. Out of the box, the OB has a choice to send their agent to the OSE Build Training, and pay their agent for construction. In this case, labor costs are additional - but can be quite favorable as expensive contractors can be avoided this way. And any contractor will need to get onboarded to the build process as well. Same applies as to the OB doing the work personally: agent can attend as many times as they need to master the techniques. OB is responsible for the hire in the standard case.
  3. If they want full hands-off, and only approve a design and write checks - we can do that - but there the extra costs involved. Thus, the owner controls the cost on a granular basis based on estimates that are provided up front. This means that the house can be as large or complex as needed. Extra costs are:
    1. Covering OSE libility - an insurance policy. Whatever the going rate is for full coverage.
    2. Additional service fee. This is for design and execution. This completely depends on the complexity/quantity of work done, so pricing can best be done on an hourly basis, based on an hour estimate up front. This is done for any work above the 1000 sf heated space quoted.
    3. Materials costs. Costs are approved by owner.
    4. Os service fee is $10k per any additional $50k of actual costs. But hourly is more accountable and granular - and work commences upon fee being paid, at 50% up front and 50% at completion, or 100% up front.


If we are the actual general contractor - then that is a different game. We get liability insurance then. Price is $50k more for the service fee, and any labor is outsourced. This is a different case with built-in conflict of interest: owner wants the lowest cost, builder (OSE) wants the most effective build. The only solution is absolute transparency. The limiting case here is that we still provide very simple construction methods. This may be more for down the road - but for immediate satisfaction - we can negotiate by saying that we provide a basic package now - and expand later. For this, we have the capacity to build larger structures as part of our core technique set. If there is large demand, then we include the extras - but just charge more accordingly - at market rates.

To price a house

Try 3 - Whole Program

See Extreme_Enterprise_Event_Design#Financial_Model

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Try 2 - Revenue Projections

See Extreme_Enterprise_Event_Design#Financial_Model

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Try 1

  • Initial work doc:

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Links

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