IGNITER

In taking a peer-produced approach to building the Social Venture Commons and shldlss (the for-profit offshoot), I’m seeing the power of individual contributions. Peer-production is driven by interest and passion – truly personal things, and in doing things in a peer-produced manner, financial and intellectual capital aren’t as all-powerful. All this has me thinking about organizational partnerships differently and paying more attention to the fact that organizations generally have a lot of individuals working for them – the real resource that seems to make peer-production thrive.

So while specific agreements around financial and intellectual capital can still be extraordinarily valuable – I’m interested right now in organizational partnerships that free their people to peer-produce, to some level, the things they are truly interested in and passionate about.

Here’s how this might look:
- Partner identifies as a supporter of the Social Venture Commons (badge, blog, announcement etc.)
- Partner allows for employees to take some of their time for peer-production (e.g. 30% of certain staff and/or 1 hour per week of all staff)
- Partner frees employees to participate and benefit as individuals

What I think might happen:
- Partner organizations get first hand experience in peer-production
- Employees inspired by the opportunity to follow their interests and passions
- People outside the Partner Organization start making meaningful contributions to the Partner

There are also countless ‘negative’ things that might happen and I expect the results will come down to the spirit with which this is implemented. In my experience so-far the benefits far outweigh the risks. Regardless, the value of the experiment alone should be enough to have some innovative organizations give it a go.

I’m looking forward to seeing who steps up to give this a try and seeing how it goes. It may seem there is a lot to lose, but I think we’ll find we all have a lot more to give and that together we’ll have a lot more to gain.

Owning equity in a for-profit venture is a powerful motivator – particularly in the early stages.  It’s also one of the most contentious, negotiated parts of building a high-growth venture. This comes from our organizational conventions of control and scarcity – we need to control and amass resources to control and weild power and get things done.

In taking a peer-produced approach to building Shldlss, the for-profit offshoot of the Social Venture Commons, I found we needed a new model to fairly attribute the economic value to those who actually created it. After many conversations, including on this post, here’s where I’m at with what has now become our “Kudos Model” for economic value distribution.

1. Phase: Set the phase of value creation ending with a valuation event or economic value distribution
   For shdlss this is the founding phase extending through to Series A investment. At this point we should have a reasonable grip on the value of what’s been created and what others think it’s worth.
2. Proportion: Set the estimated proportion of enterprise value that will be newly created during this phase.
   For founding phase this would be 100%. Over time, the new value created will likely be proportionately less each time – though not always. A basic benchmark for where to set the proportion might be what a comparable venture might issue in option pool.
3. Appointment: Appoint key people to allocate Kudos.
   For shdlss we will go probably go to 4-6 people who have been and are committed to being involved for the whole phase.  This appointment is happening essentially half-way through the phase and will be done shortly.These are people who are closely involved in the project for the entire phase and will have a reasonable sense of the relative value of contributions made during the phase.
4. Allocation: Have a KudoFest at the end of the phase.
   All appointed people will gather to review the stream of all contributions made during the phase. We will use the twitter and VenTwit streams as the core history. Each appointed person will then be able to allocate 100 Kudos to those who made meaningful contributions. They must allocate all Kudos and cannot allocate any to themselves. The 100 limit means the smallest contribution they can recognize (1 Kudo) represents 1% of the value they have to distribute. After each person does their allocations, we will aggregate the allocations and have an initial allocation. The group will then review and discuss and can make any changes provided their is unanimous consent.
5. Distribution: Distribute financial value rights according to Kudos allocation.
   During the founding phase, this could be in common or preferred shares, in subsequent phases this could be through options or other forms of financial value sharing.

This will no doubt evolve as we work our way through the process. As the lead founder, I’ve been asked why I would do it and even told that I’m crazy for trying it. With where I’m at now, I can only see us all as having a much more to gain. Without the spirit of this in play we wouldn’t be where we are at – and that’s what it’s all about – getting it done – together.

I’ve been head-down these last 2 weeks and we’re making great progress toward first launch.  For the latest action on the Social Venture Commons – feel free to track the twitter stream.

The model for distributing founding equity among those that contribute is essentially set, and I’ve begun receiving investor commitments on both the charitable and for-profit side. Development has been greatly augmented with the code-mastery of Dan Williams.

Will post some more fulsome reports next week.

Thanks all for your support so far!

Image via Wikipedia

My focus heading into 2009 is micro-messaging based collaboration. From where I sit I think it will have a profound effect on the way we organize resources to get things done and will mark a fundamental shift in shape of the organizations and systems of our future.

Some key features of this are:

• Broadly accessibile: easy (web-based), distributed (available in any site), portable (sms compatible)
• Action oriented: every interaction is a contribution, every contribution builds relationship
• Interest driven: fluidly find, follow, and do things that *are* interesting at every moment

I’m tackling this through two tracks:

• The Social Venture Commons (SVC): open-source micro-messaging based collaboration platform (non-profit/charitable)
• 3P Launch Co (3PL): SVC based tool and property developer (for-profit)

Within those there are 4 core components that I already see emerging from the SVC platform:

• application to formal organizations that are incorporating a degree of peer-production (VenTwits)
• application to groups as a lightweight rapid action support system (GroupTwits)
• application to tasks for seamless real-time management
• personal context engine (semantic history)

The core platform is currently in development and I’m working on some founding partnerships for the SVC to support innovation integration, social tech incubation and organizational capacity. For the for-profit arm we are working to launch our first property (beta) by February.

In January I am seeking a seed round of up to $250,000 invested as either charitable donation (into SVC) or as a convertible debenture into 3PL (also need a new name). The structure being resolved for 3PL will include substantial equity participation for SVC and for founding collaborators in 3PL. Further equity/revenue participation will  be designed into each tool/property created in 3PL to further support peer-production.

At the core of all of this is this notion of peer-produced organizations. We’re off to a great start thanks to huge contributions by Joseph Dee and Matt Nish-Lapidus and there are already a handful of others starting to make their mark in this to. While I’m not stupid enough to think this is going to be easy or that there is any guarantee of success by conventional measures, everything in my experience and my body tells me that we are hitting on something that has the potential to make profound change and we’re going to have a heck of a great ride trying.

There’s never been a better time to make change – and never been a time where we as global citizens are as much in need. Giddyup!

photo by: Ryan Coleman

A few weeks ago a few loosely connected people gathered for a conversation – the #convo (tweetstream). Most I hadn’t met before – except through twitter – but the conversation is still with me seems to have woven into some really great places in Toronto’s twittersphere like #thmvmnt #changecamp #tsTO etc.

Here’s a quick recap of what my memory and chicken-scratch allow and I’m hoping some more fulsome records emerge in addition to the great tweetstream and photos.

The group was drawn to the idea that there is a big shift underway and a feeling that we’re dancing around some simple threads that run through the core of this for all of us. What came out were 4 areas:

• Approach -> organic order
• Character -> enlightenment
• Context -> global locality
• Intent -> care to shift – shift to care

The character topic was one that I spent some time on in the convo. We named the cluster ‘character’ because we thought it was trying to describe a way of being — for individuals and for organizations. When asked to describe the concrete action/ultimate realization of that topic what came out was ‘non-denominational enlightenment or self-actualization’ and so whatever things help people and organizations on their own journeys toward ‘enlightenment’ are practical and helpful in developing character. And in the context of an increasingly fluid and transparent world character is ever more clearly a core determinant of outcome.

While I’m at it, there were some other aha’s for me in working up to the convo – the practical disciplines that are/will be most helpful through the shift. Through a series of contributions and conversations those ended up for me as the creative (emphasis on the create part) disciplines of:

• Inquiry
• Design
• Facilitation

There are a few other follow-ups on the wiki. Feel free to jump in. These are exciting times where the creative discplines will rule and participation by doing makes the world we want.

PS… huge thanks again to Joseph Dee for suggesting we do it, Ryan Coleman for bringing his vizthink skills and facilitating, and MaRS for hosting.