Value Networks, about commercializing their products

We take the example of a specific value network, SENSORICA.

The problem

One of SENSORICA’s main reason for existence is to provide for its members/affiliates the means of subsistence and well-being. This is to say that the surplus value that is created by the network must be exchanged on the market against other values, which are to be redistributed to participants based on their relative contribution. This redistribution is done according to the value accounting system, to which all members must adhere. The goal here is to establish a channel of distribution for SENSORICA’s products. The problem is that there are laws and regulations which makes it difficult for a non-legal entity like SENSORICA to sell certain products. Someone must take the blame if those products don't respect established standards, and our society doesn't know how to interface with things like SENSORICA.

Solution 

In the current situation, we need to create legally recognizable forms to channel products through them. This is actually the role Tactus Scientific Inc. plays for the Mosquito Scientific Instrument System, designed for the scientific instrument market segment.

About crowdsourcing

First published on June 14, 2011 last updated June 11, 2021. 

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See history of the term and concept on Wikipedia.

The practice first appeared as a participatory action that is mediated by the Internet: people got together online to collaborate on some project - ex. open source development.

The term crowdsourcing was first coined in 2005 by Jeff Howe and Mark Robinson, editors at Wired, in a business context, referring to an organization "outsourcing work to the crowd". Outsourcing is externalizing some processes that previously were part of an organization to another organization, which implies a clear boundary between in and out, us and them. Although the outsourcing relation is mutually beneficial, it is not symmetrical. The outsourcee has an information disadvantage and is economically dependent on the outsourcer, cut-off from the market or the customer. Outsourcing can be seen as inter-firm collaboration or synergy. This leads to the notion of supply chains. This form of collaboration has become a key success factor in the global capitalist economy; it has been said that the best companies are the ones that can manage the best supply chains. 

Towards 2008 this phenomena of Internet-mediated sourcing got the attention of academia and Daren C. Brabham wrote the first review paper on the subject. He identified three patterns of crowdsourcing:

• open collaboration crowdsourcing
• competition crowdsourcing
• virtual labor market crowdsourcing

Open and collaboration crowdsourcing is the pattern that stands on the high moral ground. This is what we see in open source software and hardware development, knowledge repositories like Wikipedia, or transaction networks like Bitcoin. Open, in this context, means access to participation as well as transparency. This pattern establishes symmetric relations between participants and a plain field for opportunities and potential development. This is also the pattern used in open value networks.

The other two patterns are at odds with the multitude philosophy, or with the edicts of the p2p economy. 

Competition crowdsourcing is mostly used by companies in need of new ideas. They create a contest between individuals (sometimes organized in groups) and the best idea(s) is rewarded. These contests are usually high adrenaline events that generate a few happy winders and lots of sore losers, while trying to provide a fun experience and enriching experience. I call this type of crowdsourcing "flock milking". Examples: Xprize and the Mio project.

This practice comes from the realization that companies (i.e. closed and hierarchical organizations) can use some of the tools and techniques developed by the open source culture to coordinate a very large number of individuals and extract value from the crowd. The relation remains asymmetrical between the company, a closed, intrinsically individualistic organization and the crowd. In the eyes of the company, the role of the crowd is similar to the role of an outsourcee, although the different nature of the crowd forces the company to modify its practices.

Virtual labor market crowdsourcing is about externalizing low-skills and repetitive tasks, often through an intermediary platform with a market functionality. There, tasks (demand) are matched with skills (offer) and the platform facilitates the transaction and mediates potential disputes. Example: TaskRabit.

In both last cases, the crowdsourcing concept supposes a powerful entity (the outsourcer or the labor market provider), which has some advantage (informational, transactional, logistical, financial, access to market, etc.) over the crowd. The crowd is considered disorganized but resourceful. It is implicitly assumed that this powerful entity is necessary to channel potential out of the crowd, which is seen as incapable of producing a coherent output. For that matter, and for others too, it seams justified for this powerful entity, acting as a center of analysis, coordination and production, to keep the biggest part of the reward/revenues and to reward the crowd just enough. Let's call that the candy economy.

When it comes to motivation, there is a fundamental difference between outsourcing and crowdsourcing. The outsourcer has more influence over the outsourcee than over each individual in the crowd. Moreover, negative incentive doesn't work on the crowd. The outsourcer must become seductive, attractive and must give something in return, something that the crowd likes, which can be a bundle of intangibles (fun, learning experience, networking, exposure, badges, etc.). In some cases the crowd can insist on opening the new information or knowledge that is created during this process, to make it public, which is a form of open innovation that companies have started to appreciate, but not for altruistic reasons. Open innovation unleashed by crowdsourcing, if well conducted, is hyper-innovation, which can better tactic in a very dynamic, innovation-dependent market, as opposed to a defensive tactic based on intellectual property protection.

Structurally speaking, a these two crowdsourcing patterns exhibit a high degree of centralization. 

 

We cannot ignore the innovation potential of the crowd. Moreover, the crowd is building its production, transactional and distribution capacity. I believe that the last two patterns of crowdsourcing will fade away with the sunset of capitalism.

Sensorica is an example of an open network centered around the individual and its capacity to work in collaboration. Sensorica is not an entity exploiting the crowd, it is the crowd creating solutions for its own problems. It's mode of production is commons-based peer production (Yochai Benkler).

Open source communities don't "source" the crowd, they are the crowd working in collaboration to produce something, one entity, one system. They are not lead by any other entity. They are self-oriented and self-governed entities.

By t!b!   AllOfUs

The Discovery Network Back Office Catalog

A new component was added to the Discovery Network concept, the The Back Office Catalog. To participate, go to the FORUM.  

Click to open document 

Visit Multitude Innovation

By AllOfUs

Yochai Benkler: Open-source economics

This is why the multitude is taking over the economy...

Visit Multitude Innovation, read about the Discovery Network

By AllOfUs

The collapse of the patent system!

US Patent # 6,293,874

I predict a major war between corporations and the multitude over intellectual property rights similar to the copyright war between the multitude and new artists on one side, and the mainstream cultural establishment (Hollywood, Sony etc.) on the other. This war will destroy the patent system as we know it.




SCENARIO

1) We are moving towards a Knowhow Economy NOT towards a Knowledge Economy

• the Internet technology enhances communication, collaboration and coordination , which gives an economical advantage to open and social entities, which in turn means that sharing information and knowledge becomes a better strategy than controlling and going for it alone.
• knowledge becomes slippery, leaky, hard to control, it "wants to be free"
• the model to extract value from society will be primarily based on knowhow, but also on who you know and on how many people you know.

Having the recipe (knowledge) doesn't mean you are able to make (knowhow) the cake!
The world is NOT short on ideas, it is rather short on people who do stuff.

2) We already see the emergence of the open enterprise and of open collaborative communities of innovation. A good source of information is the P2P Fundation.

Creative Commons is on the raise. Creative Commons is a parallel system emerging out of the conflict between the multitude and the mainstream media/culture establishment. The multitude said: fine, keep your junk for yourself, we'll design our own framework for creation and distribution, and we'll create a separate pool of value which we'll exchange based on our new framework.

3) As more and more individuals move towards open standards and Creative Commons, sooner or later we'll have an open community pushing an open "something" on the market, for which there happens to be a patent. People part of open communities usually don't do the boring and painful patent searching to see if their ideas are already protected, they are too busy co-innovating! The company holding the patent in question will try to defend it, because the open community constitutes an economical threat. The conflict will be inevitable because the two practices of commercialization are incompatible.

3) The legal battle: They closed down Napster and they punished individuals caught downloading music for free. But everyone soon realized that it is easier to win the lottery than to be sued for having downloaded a song. They tried all sorts of fear tactics which in the end proved to be unsuccessful. Gradually, the artists themselves started to realize that the open model actually benefits them. New models of remuneration emerged, which were in tune with the new media. But let's go back to our problem, in our case, who is the company going to sue? Suppose that the open community is a diffuse entity with no head office; not registered as a legal entity. Suppose it is just a bunch of passionate scientists and engineers collaborating to find solutions to solve socially relevant problems; an ad hoc, fluid group based on a wiki (this one for example, or this one, or a million others). As a social entity it looks much like the file-sharing community. Moreover, once the open community launches an open "something" as Creative Commons, this thing will be picked up by hundreds if not thousands of other entities around the world, part of different jurisdictions. It will make no sense, economically speaking,  for the company owning the patent to defend it.

This is the flow... A new culture is emerging. Knowledge becomes free. The way we extract value from our knowledge is by our knowhow associated with it. Patents will die! We need to adapt.

See other reasons in this document "Why patenting doesn't make economical sense anymore"



Visit Multitude Innovation, read about the Discovery Network
See SENSORICA, an open enterprise making open hardware. 

By AllOfUs

Does the sun shine in your country?

Innovation worth spreading. Free energy (provided by the sun) melting.
Do you want to build a melting facility based on solar energy?
Multitude, go for it! It only takes a mirror... 

Create an enterprise based on open principles and collaboration, using the Discovery Network blueprint, and attract technical expertize from all over the world. Contact the Multitude Project for assistance. We even have a specialist in optics and light interaction with matter (contact Tiberius Brastaviceanu).

Visit Multitude Innovation, read about the Discovery Network

By AllOfUs

Symbionomics: Stories of a New Economy

Visit Economical Alternatives

By AllOfUs

OpenKollab Pooled Fund Intro

By AllOfUs

Reflections on Open Innovation

What is the big buzz about open innovation? What’s the big change? The subject was discussed at the Connecta 2010 Congress in São Paulo and at Stefan Lindegaard´s workshop (during The Hub SP Winter School). It´s been approached in books and web communities and accounts for more than 12 million links at google search. Here are some thoughts about the theme from the last few weeks. Read more... 

By AllOfUs

Stafan's good reads on Innovation

Stefan is a specialist on open innovation. He blogs on 15inno.com. He shares with us a short list of good reads for the week Good Reads on Innovation

By AllOfUs

Moving Beyond Open Innovation

"Opening up R&D organizations to outside ideas has become a powerful weapon in the strategic arsenal of research managers. As Henry Chesbrough writes, “[O]pen innovation is a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology.” This strategy has been associated with notable commercial successes, such as Procter & Gamble’s SpinBrush, sourced not from internal R&D but rather a group of inventors in Cleveland." Read more from Moving Beyond Open Innovation

By AllOfUs

Open Source engineering approach to build a car?

These people must be crazy! Haha, this is what people form GM and Ford must say. And this is exactly the reason why those dinosaurs will disappear in the near future. The economy will repopulate with economical entities like riversimple.

From riversimple's website:

Open source design and development. By licensing designs to an independent open source foundation, the 40 Fires Foundation, engineers and designers from around the world can help develop the vehicles and any manufacturer around the world can make them.

Have broader company ownership. The corporate structure of Riversimple is designed to ensure that all stakeholders in the enterprise have a voice in the governance of the business and share in the benefits of its success.

Go the riversimple homepage.

By AllOfUs

The myth of autonomy debunked, what about the myth of initiative?

photo by r8r
We've all been conditioned into believing that only a small percentage of all people are able to work autonomously. The machine/control paradigm of management is founded in this belief. In order to make people productive apparently you need to tell them what to do and how to do it.

Classical hierarchical organizations work that way. The executive sets up goals and directions, managers translate them into concrete directives and actions and pass them to their employees. Employees execute these orders. The employee is seen as a mechanical piece, part of a complex mechanical system. The machine metaphor is clearly apparent here. He/she needs to execute the given tasks within the imposed constraints. Yes, there is feedback going from the employee to the manager, and up to the executive, but there is very little autonomy.

It turns out that human organizations behave quite differently from mechanical automata, especially when creativity is the goal of the game. First, an organization needs to win the cooperation of it's members. A mechanical piece has no consciousness, no free will. You put it into its place within the system and it turns the way it is supposed to. A human being has the choice to do a great job, or a crappy job. In order to gain the full cooperation, organizations must satisfy for the individual some fundamental psychological and material needs. The individual needs to perceive that his/her contribution is important, that he/she is part of something bigger-a form of spirituality. The individual needs to perceive that he/she is respected, valued, appreciated. The individual must also believe that his/her contribution is justly rewarded, etc. etc. Second, it is now well understood that the working environment and all the psychological needs of the individual affect creativity in a major way. Even if you gain the full cooperation of your employees, you are still not sure that the creative juices are flowing to the optimal capacity.

Google understood all this! Among all the successful companies, their employees have the greatest autonomy. On Google's campus you find cafes, bars, swimming pools, game rooms, parks, you name it. You can take your laptop and work from the swimming pool, and your boss is not going to be there to pass you the sunscreen. Google understood that they can get more from their employees if they only emphasize on the job that has to get done, and let the employee decide how to do it. And it works! The myth of autonomy was debunked.

But there is another myth. We are told that the great majority of us have no initiative. If we are not given directions we don't know what to do. We might be autonomous, i.e. able to organize ourselves once we know what has to be done, but the majority of us are apparently incapable of setting goals and directions. What about Linux? Who tells developers which directions they should take? This myth is about to be debunked as well.

I am not advocating that all human beings are autonomous and show initiative. But what is the real percentage? The opposition to my argument brings up statistics, scientific studies made on our actual society, showing only a very small percentage of driven individuals with initiative. But wait a second! There is something scientifically wrong here, the method could be good, but the conclusions are false. The logic used is flawed. We are talking about what us humans are capable of, about our potential, we are NOT describing our actual society. We've seen that before. A scientific study on black slaves on a plantation in South Carolina USA, at the beginning of the century, would most probably reveal that the majority of these individuals were submissive and dependent. Can we conclude that it is in the nature of a black person to be submissive and dependent? Of course NOT! We know that humans are malleable. Put a child into slavery and he/she will adopt a slave mentality. It is a matter of adaptation! You don't comply you die! It is about adaptation, it is a force rather than a weakness. This shows the capacity of all humans to thrive in harsh situations. But once slavery was abolished these same people rapidly acquired the skills to live in society. They become teachers, business man, scientists, doctors, and even presidents.

Our actual system has made us dependent! Our masters only need us to produce, not to be autonomous, not to show too much initiative. We have bee conditioned into being docile and dependent. The scientific data describing individuals only describe the actual system, NOT the our potential.

What is the percentage of autonomous individuals with initiative, potentially speaking, within a culture of freedom and self-determination? If YOU are not a such person you may want be become one, YOU CAN. 

By AllOfUs