Distributive Enterprise Experiments

We are switching gears more directly towards economic impact of the Open Source Ecology platform as we organize our first workshop of 2016. In the first workshop, you can build a 3D printer from scratch in 8 hours and take it home with you. More than that, we are giving the business model away for free. This means that we encourage others to replicate the enterprise, as we plan to provide enterprise training and certification as part of the package.

Yes, we understand that a 3D printer is not one as impressive as one of our larger machines like the Brick Press or Tractor – but the small 3D printer does make for a workshop accessible to a larger fraction of the population – while it allows us to test the final stages of open source product development – namely productization. This creates a good template for further productization efforts – where the various development steps as well as the protocols for accomplishing those steps become refined. Note that we have produced heavy machines for sale already, but we have not done so on any regular schedule, so we don’t claim to have a highly replicable process in place – yet.

Distributive Enterprise

We are experimenting whether open source enterprise – a Distributive Enterprise in particular – can provide the positive capital feedback loops that can sustain continuous product improvement in an Open Source Product Development (OSPD) framework. In my view, emergence of the OSPD paradigm appears to be the next most disruptive step in human economic history – the economic counterpart of technological singularity – since the creation of financial cartels in the 1700s. This is quite inspiring, in that the open source economy has the potential to shift gross disparities of economic power.

Value Proposition

Let’s start by clarifying our value proposition in our humble experiment. 3D printers are a mature open source technology, and you can buy a kit for $300. However, it takes time to build it and make it work. The Folgertech Prusa 3D printer kit that we bought did not work, nor did the bug fix to fix the original kit – so we spent about 30 hours building the printer up to the first print of a perfect calibration cube. Plus, we had to get a few extra parts: a height sensor, so we can offer automatic bed leveling for turnkey operation; some bolts were wrong; and a print surface does not come with the kit. This is why people buy turnkey printers at a higher price of $1-2k – our favorite is the Lulzbot Mini from a rapidly growing Colorado company that is fully open source up to the Respects Your Freedom certification.

Our value proposition is guaranteeing a successful build in 8 hours as opposed to 40 hours for a beginner. So if you don’t have the time, or if you don’t believe you can build a 3D printer at all – this workshop gets you there in a single day. The value in that is the you really own the machine: you can fix it if it breaks, and you can modify it as needed – it’s an effective lifetime warranty. You built it, you own it.

The second part of the value proposition is the enterprise model. We teach you that you can buy an almost-complete kit, and that people are willing to pay for an immersion education experience. We have documented rigorously that it is possible to do a complete build in 3.5 hours under ideal conditions – minus preparatory part layout and calibration – see the complete 40 page presentation and our modular breakdown for the build.

Enterprise Model

To run a workshop, you can charge $50-300 for the build experience in addition to the cost of parts. Thus, if we are charging $300 for the build, 12 participants showing up means that the gross revenue potential from a 12 client audience is $3600. While there is a lot of development cost associated with producing and documenting this model in the first place, the benefit is an open source model that can be replicated inexpensively anywhere in the world where industrial supply chains are available. Our goal is to achieve a model where workshop preparation takes not 3 human months of work, but more like 3 days to prepare. Including the event, this translates to $600-$3600 for a typical case of one week’s labor – which is a solid livelihood – if done on a full time basis – translating to a gross between $60k and $180k per year. It can be more or less than this depending on an individual’s entrepreneurial drive. There are also minor event costs, such as space rental, travel, publicity, food, tools, etc.

The costs to achieve such a model are significant: we are expecting to have put in over 500 hours of preparation to get to the first workshop, which adds up to less than minimum wage – and does not include any other costs such as materials for prototyping. Beyond that, there is still more work on the 3D printer distributive enterprise: developing a viable training and certification infrastructure – as well as developing other assets such as a CAD design workbench, design guides, and other infrastructure required for people to design, build, and produce a flexible, scalable, and modular 3D printer enterprise. Some of these steps are captured in the 3D Printer roadmap:

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In short, OSE is paying dearly for development, so we can give it away for free. We are effectively an open source product development organization – which we think is a model that can provide the most effective route to product development. We are not alone in this assessment. Seminal literature in the field of new product development indicates that modularity and a refined collaboration architecture – and effectively an Open Source Product Development (OSPD) effort – is the route to the best product development results. See our last blog post for more about the OSPD topic.

This makes perfect sense, because the more we give, the more comes back to us – such as development effort and workshop revenue if we run workshops. We intend to use the 3D printer enterprise to bootstrap fund other development projects.

Note that the bottom line is having a good product. Part of that product is a lifetime design machine that you can fix and modify. The more important part is that we are developing an open enterprise infrastructure and ecosystem – based on open source values – with intent of viral market substitution – away from proprietary products.

Is a lifetime-design product that you build yourself – at a markup of $50-300 for a one day intensive learning build immersion – worth it? Absolutely, unless you have 30+ hours that you don’t mind spending to achieve the same by yourself. Naturally, some people can do a build much quicker, and others will give up and never finish. We are selling enhanced access to skills, so we believe fundamentally that the value proposition is sound. in reality, we are not selling hardware – but rapid access to skills and experience.

The product quality must be high. We have confidence in our ability to lead an Extreme Manufacturing process – and we are the only one day 3D printer build workshop offering in the world – please let us know if you know of any other 1 day build workshop offerings. I understand that organizing a 1 day guaranteed build is not easy – but I thought that more people would be doing it – so I’m not really sure why this is so – given the powerful outcomes of a 1 day build. The physical product is only at its beginning stage, as indicated by the Roadmap above. To get to widespread adoption, we need to achieve Viral Replicability Criteria, more on this below.

The Value of Reskilling Civilization Towards Integrated Skill Sets

Note that the OSE Enterprise Model centers around both production and training. A production-only enteprise appears to be incomplete as far as a sustained progress of civilization is concerned. Our mental model is that the farther that people are removed from understanding material production by being involved directly – the more disintegrated and meaningless society becomes – ie, society can be responsible only if people understand material production – the foundation upon which geopolitics are built. Virtual reality does not feed a certain core of human nature – for which reason immersion in some form of tangible production is key to a more balanced society. The factory model of production is a dead evolutionary end if it does not include public participation at a broader scale than today. Robots are not incompatible – as robots require a skilled human hand to operate them. I don’t believe that robots will ever achieve autonomy as Ray Kurzweil predicts – because the human-robot relationship is always a symbiosis, and should always be considered as such as we move forward with technology. There is more to a meaningful life than finance capital and virtual reality, which both run out of control when feedback loops back to reality are broken – as in today’s world.

Is Distributive Enterprise a New Idea?

We do not know of any single individual or group on earth who is developing Distributive Enterprise – a no-strings attached, open source business model that encourages people to replicate. You don’t have to pay a fee to access our business model, which we publish on the internet for free. As part of this model, we are creating training and certification infrastructure, and are aiming for independent replications as the growth model. We provide a service of developing regenerative enterprise – towards the mass creation of right livelihoods. Our intent is to create immersion training via our Entrepreneur-in-Residence program, and to create a more advanced program for Movement Entrepreneuers once we are a bit farther along on our Roadmap.

The innovation in Distributive Enterprise revolves around the central question of what is the minimum infrastructure that allows a distributed, lean organization to perform innovation that was formerly possible only in large corporations. The advent of the internet and the ability to organize a project in a modular architecture provides for new opportunities in lean-ness. This is important because effecient production is key – but an organization cannot be too big or it becomes inefficient and subject to corruption. Centralization is wrapped up with geopolitics and poor distribution of wealth – so it is worthwhile to develop small organizational structures that lead to self-determination – rather than to centralization.

As such we propose the concept of an open, distributive enterprise as the most efficient and productive form of economic organization possible. This is biomimicry, as this structure is consistent with the distributed nature of resources: rocks, sunlight, plants, soil, and water are found everywhere, and thus our social organization can be distributed just like nature. We believe that the highest level if innovation can occur from radically lean organizations which instead of having to grow larger, they share resorces openly and everyone wins.

Returning to the business models that we are developing – you are not allowed to use the OSE brand or logo to advertise. You are required to attribute that your business is based on OSE, but you cannot claim OSE as your brand. We are developing a mechanism, OSE Certified, which indicates that you are still a completely independent entity (OSE is not liable for your actions) – but you are following clearly-defined standards that comply with OSE’s philosophy, vision, and practice. This certification is intended to certify certain qualities of a product. We are setting this certification up for a secondary purpose of tracking the adoption of our work. Certification is intended to contribute to another entity’s reputation as well as to help their visibility. By providing such services, we intend to provide sufficient value that others would want to get certified – allowing the growth of OSE’s impact to be measured via the number of certifications provided. Further, we also intend to provide a registration service – where registration also allows for a higher level of visibility. In both cases, a sustainable revenue model for running these services must be created, such as a certification fee that can fund staff time of a certification manager.

The closest that we know of to the Distributive Enterprise concept is a proprietary franchise like McDonalds, where you pay a million dollar fee to access a business model and to use a brand name for a limited time.

There is one big difference between a model like McDonald’s vs. OSE: in the McDonald’s case, the net effect is the creation and growth of a large centralist corporation. In our case it is about distributing economic power far and wide, with full ownership belonging to the entrepreneur. OSE serves in the capacity of assisting the replication by startups – and serving as a standards organization for continuous product improvement.

Viral Replicability Criteria

We have defined a set of Viral Replicability Criteria that allow for viral replication of distributed, distributive enterprises to happen. Some of these include:

Distributive Enterprise Documentation. An open source business model and plan. Documentation for carrying out an enterprise including operations, strategy, marketing, training, supply chain management, service, and any other enterprise elements that help in the startup of new enterprises.

Product Development towards a Construction Set. Modularity and scalability are key to our work, in that we develop construction sets for machine systems, not individual machines. In the case of a 3D printer, that means that we develop a design guide for a scalable and flexible 3D printer. This means that we design a set of 3D printer library parts in FreeCAD consisting of the various modules, components, and parts of a 3D printer that can be dragged-and-dropped to make a machine of any size, shape, or particular function. The inent is to put design and modification capacity into ready grasp of average people.

Open Source Supply Chain. The Design Guide and Library are based on specific parts that can be sourced from an approved vendor list as defined by an Open Source Supply Chain (see our working document and contribute). Supply chain issues are one of the greatest challenges of building hardware in a reliable fashion: suppliers come and go, their parts change, stock gets depleted, quality control issues arise, prices fluctuate, etc. A build can come to a stop when even one of hundreds of parts is unavailable. Thus, an open source supply chain is intended to identify the most reliable, cost-effective, and high quality parts. Supply chains are typically proprietary information in the business world, as it may take a company years to develop a workable supply chain. Having an open source supply chain is critical for build-on-demand, flexible fabrication operations.

Developer Toolkit. For continuous product development, which is a natural part of any evolving enterprise – capacity for further development has to be built, and this capacity should be readily accessible to any developer. The importance of a dedicated Linux operating system that contains all the necessary software, part libraries, and other resources becomes clear. For a person to become involved in development, they must download, install, find, and otherwise aquire the infrastructure for development. Different computer operating systems, version, and other variations make it very difficult for a large distributed team to get on the same page. A dedicated Linux distribution download makes this easy, and this could be done with either a dedicated install or a Live USB distribution. We are using the latter to provide all the software and firmware for the 3D printer in our 1 day build workshop – which is part of our strategy to guarantee build success in a single day.

Product Roadmap

The Prusa i3 is not an industrial grade machine – but it’s our humble start and involving ourselves with this at the start makes sense. It gives immediate experience and good results froma a proven design. It was a suggestion from the RepRap forum as a good entry level printer from a known USA company.

From this design, we can take 5 modules: controller, x axis carriage, power supply, and extruder – and use them in our next immediate iteration.
The OSE Specification compliant machine needs 4 main improvements: automatic bed leveling for turnkey operation; a stationary print bed to improve print quality, as tall objects tend to wobble if they are on a rapidly moving platform; full scalability to a machine of any size; and an enclosure for improving print quality and layer adhesion by keeping the print warm. We are addressing the first one in the first workshop, and from there, we aim to build the next iteration for an additional $75 in material costs ($20 for 1/8″ steel frame, 1 more stepper motor, 6 more chromed rods, 3D printed parts). The conceptual diagram that encludes the enclosure, full scalability, and a stationary build platform is:

This is a hypermodular design: it uses a frame module, and all the axes are belt driven and based on an identical design. Moreover, the frame cutout from the larger side serves as the frame pane for the shorter side. The design can be scaled for larger or smaller size (intensive scalability) or modules can be multiplied (extensive scalability),as shown on page 2 of the above presentation.

There is a long way to go to meet Viral Replicability Criteria. We are doing the detailed, module-based build videos. The remaining criteria for viral replicability include:

Conclusion and Invitation
Our 3D printer project is called D3D Fusion – D for Distributive – and Fusion – for a spontaneous chain reaction where enterprise teaching and production explodes in number. All of this is in its initial stages, where we make the road by walking. If you want to contribute, copy our D3D Development Spreadsheet and do a pull request if you have a contribution. Register on our wiki to contribute.

We move forward in inviting all the world’s social entrepreneurs to create a viral enterprise that is responsible for a significant market share of all future 3D printer production. To clarify the scope and potential: what does it mean that a 3D printer was based on this work? Clearly, identical clones qualify. But also, there will be other designs generated via our construction set assets and approach, and it may not be clear if something is a derivative of our work. The potential is viral market substitution, which we define nominally as the domination of a certain global market on a 5 year time scale.

A clear indication of success of the above musings would be achieving a majority market share in fused filament deposition 3D printing. I speculate that if this happens, it will happen within 5 years (Google rose to power in 5 years). The experimental question is formulated thus: if Google can achieve domination in 5 years in an artificial economy (ie, pumped up artificially by investors) – can authentic self-determination of unprecendented power be provided within the framework of a distributive model, where the primary concern is empowering people to the full of their abilities? Can such a model provide a powerful and unprecedented motivation to people? A case can be made that such an ethical incentive may be sufficient to provide energy to new economic agents in an exponentially growing field of 3D printing – and attain distributive economic results that are more powerful than command-and-control capitalism. Ie, does the distributive enterprise dominate centralization of power? That is an extremely exciting question. Perhaps the better question is to ask, under what conditions is such domination possible? Or, the real metric to shoot for is not domination (>50% market share), but just a visible market share, such as 10%?

For clarity, the above scenario doesn’t mean that OSE will capture the value – it means spawning activity primarily in other independent players. This may be difficult to measure, but if we see a visible number of D3D Fusion products, we will know that the Distributive Enterprise effort was able to achieve fusion.

To join, put your name and offer in the Team Charter, and continue the discussion there or on the OSE Workshops FB page.