Business Plan

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Executive Summary[edit]

  1. The problem and your solution. Equipment for building the infrastructures of communities is expensive, is designed for obsolescence, and relies on external inputs of energy and resources. We are bulding open source, low-cost, lifetime design equipment that is easy to maintain and modify using local resources. We are building a Lego set for real infrastructures - to cater to the needs of Cultural Disruptives.
  2. Market size and growth opportunity. The population size of customers is about 0.1% of the developed world population - the Cultural Disruptives - approximately 1M people in the developed world. This is a small subset of the 2.5% population of Innovators in Roger's graph of Innovation Diffusion. The product market values for the 50 GVCS technologies is significantly more than $1T per year, as seen in GVCS Market Size for established industries. Thus, the market value of production from product sales only is $1B/year, and this is not to mention derivative value generated from products related to the GVCS (such as consrtruction services, agricultural products, energy and fuel production, etc.)
  3. Your competitive advantage. Our competitive advantage is open source, continuing innovation - which is endorsed by crowd support. We produce low cost (4-8x cheaper than industry standards) and we typically have 1-year primacy as developers of products before we train our competitors. Training competitors increases our social capital with foundations and other supporters. Our positioning as a disruptive market force provides us with Social Capital, such as True Fans ($6k/month currently), unsolicited donations from foundations, and visibility in the media. Our competition includes established industries for the 50 GVCS machines. Another competitive advantage is lifetime, modular design - which adds a factor of 10 value in longevity, and adds value by allowing the user to maintain and fix the machines without expensive repairmen.
  4. Business model. Our customers are small entrepreneurs - such as builders, farmers, or others who are interested in DIY productio of their living and working environments. Our development collaborators are Replicators. The sale price of the CEB Press is $9k, and the build cost is $4-5k in a Collaborative Production business model. We demonstrated economic feasibility in 2011 by clearing $25k in product sales, and we have several product requests per month without having begun advertising. Our sales strategy is leveraging our Social Capital such as the TED Talk, publishing through our social media and networks, speaking engagements, and media channels. Our current development program revolves around streamlining production to producing one machine per day with 8 people, with 4 production runs per month, to net $16-20k per month to fund staff. The other part of the business model training competitors (Distributive Enterprise) and securing non-profit sector funding from foundations and individuals. To do this, we are setting up a hybrid for-profit/non-profit organization. We will transition to replication focus after the 50 technologies are developed by 2016.
  5. Executive team. Marcin Jakubowski, Ph.D., Executive Director and Founder, TED Fellow, Shuttleworth Fellow; Aaron Makaruk, Director of Development, Co-Founder of Youth on Record before joining OSE full time in in Nov. 2011; Cameron Colby Thompson, Board of Directors, OSE Treasurer. Serial entrepreneur, founder of Honest Policy.
  6. Financial projections and funding.
    • 2012 - $500k in funding; Developing Collaborative Production funding of $20k/month by December;
    • 2013 - $80k/month Collaborative Production funding goal, mid-year. 2013 goal: $18k/month from True Fans; total 2013 earnings of $500k + $1M in foundation funding; 2013 milestone of full establishment of organizational infrastructure (24 staff) supported fully by Collaborative Production. Needs Education Curriculum for cross training + Master Fabricator.
    • 2014 - Continuing bootstrap funding; full parallel development of 6 prototypes per month; organizational stabilization towards education and replication program development if budget above $1M. $1M in production/True Fans + $4M in foundation funding. Accelerated quality of documentation, prototyping, testing with budget over $1M bare minimum.
    • 2015 - Continuing funding along similar lines - extension of 2014. Addition of replication/branding/training program development. Total $5M funding.

Body[edit]

Do at least first 7 of these

Value proposition.

Industrial machinery is typically expensive and value-engineered (planned for obsolescence) – as part of a paradigm of short-term profit on both the side of the machine producer and machine user. This has a centralizing, get-big-or-get-out effect where it is difficult for communities to operate as resilient economies. Our solution is producing low cost, lifetime design machinery that meets or exceeds industry standards, and to provide enterprise support for local economic production of essential goods (food, energy, housing, technology). Our solution is like Lego blocks but for life-size machines - retaining simplicity of design, transparency, scalability, modularity, and user-serviceability to reduce operating and maintenance costs. This reduces barriers to entry to productive enterprise, enabling economic autonomy on the scale of communities.

The target customers are twofold. First is the buyer of our equipment, who is typically an entrepreneur or DIY producer. The benefit to the entrepreneur/DIY producer is lowered barriers to entry to enterprise, as well as reduced operating and maintenance costs because the machines are designed to be user-serviceable and they typically operate on local fuel or feedstocks, such as biomass pellet fuels with the modern steam engine.

The second target customer is the Cultural Disruptive. There is a number of such people who view the GVCS as a potent solution, while refusing to take on just any standard job. (should do a market survey to gauge interest - based on economics of a training model.) The benefit to the Disruptive is a lifestyle investment in a viable career path as a disruptor within a dedicated community that is highly aligned with a lifestyle of Intrinsic Motivation.

Target market.

The target market includes product sales, organizational development, and trainees. Because of our significant cost advantage of 4x lower price than industry standards, we aim to sell a number of brick presses - to village builders and other entrepreneurs. The demographics are typically adults 20+ in age - startup individuals and seasoned professionals(50+) who appreciates the need for low-cost, lifetime-design, human-serviceable machines.

The recruting part is more difficult. We are looking for a team of lifestyle investors. As stated in the Strategic Plan.

The trainees will be those people who upon completion of the GVCS by 2016 can begin their 2-year, crash-training curriculum for Civilization Construction. This demographic is undetermined, and we will need to take a survey to assess the parameters by which individuals would be willing to participate - cost, duration, skill set, training method, resource access.

Sales/Marketing.

We need 4 product sales per month in 2012 and 16 in 2013. Our social networks and media presence should cover this. Otherwise, recruiting of our team should be performed through standard recruiting channels - but focusing on cultural creative internet media.

Production

We are engaging in Collaborative Production in our 4000 square foot, off-grid Workshop under the guidance of a Master Fabricator. We will work half wwith apprentices and half with staff during production runs. We use off-shelf parts initially, and later melt steel from scrap to generate virgin stock. The time to market is 1 day in our streamlined production method, with crystal-clear fabrication process diagrams, augmented reality fabrication assist, and CNC automation. The cost is that of the Master Fabricator's time. If staff work, the net earnings are used to pay $2k stipends to the participants, each according to specific participation contracts.

In order to enable production by unskilled apprentices or staff, we will be investing in cross-training infrastructure including master fabricator curriculum with augmented reality training assist using the Aurasma platform.

Distribution

We will provide global distribution to any location with a supporting industrial infrastructure to accommodate fixing and maintenance needs. We will ship directly to customers, with an administrative person taking care of orders. As other producers begin in other areas, we will shift to local customers.

Revenue model

We are a hybrid organization where funding goes back into the operation to ceate 3000 OSE Campuses by 2028. The basic model is Collaborative Production, expansion of the True Fans program to $20k/month earnings, and foundation funding to cover education/training/replication development. Product development itself will be bootstrap funded completely through product sales regardless of foundation funding level fluctuations. We are not accepting traditional investors as a nonprofit organization, as we have already got enough infrastructure in place to carry on effective production. Speaking fees are also expected to bring in $5k/month starting in 2014.

Cost structure

  • Overhead - $900/month electricity for 1 year
  • Infrastructure maintenance - $10k/year
  • Staff - $60k/month
  • Recruiting - $5k/year
  • Marketing - $5k/year
  • Materials - $30k/month
  • Accounting - $5k/year
  • Insurance - $5k/year
  • Food - $3k/month for 2 years
  • Office supplies - $200/month
  • Additional housing infrastructure - $75k/year for 2 years
  • Agriculture investments - $10k/year for 2 years
  • Travel - covered by speaking engagements.

Summary:

  • $450k in 2012 - see 10_Month_Development_Roadmap.
  • ~ $1.2M per year projected for 2013,
  • Food, fuel, electricity, and housing costs will go to near 0 after 2015 as we are able to build all the required machinery at low cost.

What are published industry standards for the above?

Competition.

There is a large number of competitors. About 50 of these are shown here.

Unique selling proposition. Our unique features are is 4-8 lower cost, lifetime design. modular design, design-for-disassembly, user serviceability, ready interchangeability of parts via Lego-like design.

Market size, growth, and share. We aim to capture 0.1% of the market share. The market is over $1T. It is growing proportionally with population increase.

Barriers to Success

We face a number of significant challenges.

  1. Finding the one in a million (literally) Cultural Disruptives entrepreneurs for a total of 3000.
  2. Ability to recruit talent for our synergistic team if we pay only a $2-4k/month stipend and cover living expenses.
  3. Foundation funding is not reliable, and it may slow our curriculum development/replication strategy by 2 years.
  4. Ability to cross-train people effectively over the long term - what are the limits to human learning.
  5. Synergizing the team with a large number of moving parts by swarming on problems when necessary.
  6. Huge risk lies in the assumption that we will have customers for the machines.
  7. Infrastructure upgrades are still in need of completion.
  8. Recruiting and stabilizing the core team will be a challenge.
  9. Proving the social sustainability of a group of people who work and live together.
  10. Peoples' unwillingness to learn radically new things.
  11. Ability of people to cross train effectively to enable a 2 hour work day. That requires significant learning on the part of the community members.

The highest risk is people: will they get along? Will they be willing to learn?