Implement a Discovery Network

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Discovery Network, first proposed by Tiberius Brastaviceanu (in 2008), is licensed under a Creative Commons Attribution 3.0 Unported License. Based on a work at Multitude Project.

Read the Discovery Network blog written by Tiberius Brastaviceanu reporting on the development of SENSORICA, a DN in the making.

Conceptual Framework for Collaborative Design and Operations video by Peter Butala, Faculty of Mechanical Engineering, University of Ljubljana

General Considerations

Any type of enterprise involving two or more individuals requires some form of organizational structure. The formal aspect of the organization is crucial, as it dictates the way things are done. The Discovery Network (DN) concept is revolutionary in that it proposes a new form of organization for innovation, production and distribution of material goods. It is part of a new organizational and economical paradigm, largely dependent on the newly developed information and communication technologies. In The reason behind the Discovery Network we argue that this new form of organization provides significant economical advantages when applied to certain types of commercial endeavours. Before advancing some ideas on how to create a DN we will show how its implementation differs from a classical business organization.

In building a conventional corporation one follows a precise blueprint and progresses step by step according to a predefined plan. Let's take as an example a high tech corporation. At the base of such organizations lies a new technology. Usually an R&D team is initially created. As the first prototype takes shape, the organization expands by forming key departments to take forward manufacturing, sales, marketing, etc., along with supporting structures such as finances, operations, and HR. The growth of a corporation is similar to a tree, with R&D representing the trunk, which provides the new product-ideas that are vital for the company’s survival. It is important to realize that all the structural elements of the company are like the parts of an organic body. At a certain stage of its development, the company cannot function in the absence of any of them. The elements have become inter-dependent and can no longer exist as separate entities.During the growth process, key personnel are held responsible for implementing the initial blueprint. Managers are hired first for each new department, and charged with growing their specific branch of the organization. At this point it is worthwhile making the distinction between the company (which can be viewed as an abstract entity, a legal entity, a potential, a structure in the making, etc), and its employees (who are real individuals doing real work). During the hiring process, a defined employer-employee relationship is cemented between the company and every individual joining the company. Moreover, the structure of the company defines the relationship between the different employees. Thus, the most fundamental elements we need to consider when thinking about the growth of a corporation are the following: a pre-existing blueprint, the hiring process, the employer-employee relationship, and the employee-employee relationship.

Compared to a classical organization a DN is a fundamentally different entity. The final structure of a DN is not defined at the incipient stages and it is dependent on the type of resources that are needed, their availability within the immediate environment, how these resources are distributed within organizations that will eventually be part of the DN, etc. In other words, the evolving organization can be composed of any number of commercial and non-commercial entities , as long as all the necessary resources are assembled and activated. The way they interact with each other within the DN depends on how the key resources are distributed among them. In order to insure the stability of a DN, the “weight”, or power of influence of each member, must be distributed strategically across the entire network.

In addition, the nature of the DN is also different from a normal corporation in that every component member already existed as an independent entity prior to their incorporation into the DN. If a member decides to quit the network, the DN is deprived of a critical resource which can be replaced by the inclusion of one or more substitute organisations with the ability to provide the same resources or render the same services.

The growth of the DN is characterised by a matchmaking rather than a hiring process. The DN-core scans organizations or individuals with specific characteristics or matching a specific profile, seeking to put together the perfect blend. A partner relationship holds the DN together. The entity that joins the DN is not necessarily exclusively committed to the network; but can also continue it’s previous activities in parallel. Moreover, an entity can quit the network after fulfilling its contractual obligations. In a corporation the Marketing department cannot simply separate itself from the company as it is an integral part of it.

Only relations between DN members are regulated within the DN. Individuals active within the DN that are employed by organizations, themselves members of this DN, are subject to regulations within their own organization. These individuals are NOT considered as members of the DN, they act for their organization which is considered a member. Members of a DN can be organizations of all sorts and individuals.

In essence the formation of a DN is more closely aligned with the deveopment of a community than of a company. As a result, much more can be learned from community organizers than from corporate executives. Only the goals of the organization are clear from the beginning, and the entire process is goal driven. These goals have a clear influence on the structure of the organization. The environment and the available means and resources are also important factors. However the members of the DN who pursue individual goals but simultaneously embrace (to a certain extent) the goals of the community should not be neglected. They can also exert positive influence on the emerging structure.

A corporation is a value+power-based structure. The DN is a value-based structure, minimizing the power component. A corporation is based on the command-control paradigm, the DN is based on synergistic collaboration, voluntary involvement. The goal of corporations is profit driven. The DN is a multi-value system with multidimensional goals. Member entities are motivated by a variety of reasons: profit, market share, reputation, scientific recognition, social involvement, etc.

Distinction between principal goals and collateral goals

It is important to discuss the primary goals of every entity joining the DN. Moreover, it is important not to neglect the collateral benefits that naturally arise in a social environment. Therefore the DN core must identify and evaluate collateral benefits for everyone. This will make the network stronger!

Building a community

We mentioned before that the DN can be composed of various types of entities, small and large organizations, for/non-profit organizations, academic entities, individuals, consumer representatives, etc. These entities work in concert to develop new products. We can consider the DN as a community. Creating a strong and productive community requires a shared vision, common interest, as well as strong built-in incentives. The interest in the DN can emerge from different sources, among which the most important is the possibility to create successful products and to generate revenue, to gain recognition (applicable to academicians), and to find solutions to problems that affect our society in a positive way. But in order to make all these things happen, the community needs stewardship, structure, resources, and a culture. In the beginning, the main driving force is the DN core. In the long run, once the critical mass is exceeded and the goal becomes realistic and evident incentives will naturally emerge from the whole network.

Theoretical background of organization

Steps to follow

The DN core

The person/organization with a more or less clear product-idea sets up a collaborative infrastructure, composed of different tools for communication, collaboration, coordination and logistics - see bellow. The product idea is clearly described. Some information about the potential market is also provided. A system of values and norms, a value exchange mechanism, and legal tools are also provided. A knowledge base and a map of needed resources are built - see bellow. The originator starts to look for members/collaborators. Every important member organization delegates an individual to be part of the DN core. The DN core grows as the DN grows.

It is advised to first seek a person/organization on the market end of the venture. If a real market is factually established and if channels to this market are somewhat guaranteed, the growth of the DN will be greatly facilitated. It is easier to convince other parties to join the venture when you have a great idea and a promised market for it. The next step is to go after technical resources. You want to make sure that your product-idea is realizable, and to estimate its market value. The initiator of the DN can be at the same time a technical resource individual/organization.

See the other sections bellow for all the other important components of the DN organization.

Market Study

A market for the initial product-idea must be outlined first and be established based on factual information. The promise for a market has great potential to stimulate the growth of the DN and to energize the entire organization. A new member specialized in market/marketing can refine the market study.

The DN is a multi-value system, therefore the market study should go beyond just profits. Other things must be taken into consideration like social benefits, environmental impact, etc. Don't forget that some important collaborators are not motivated by profit alone!

Outline the road from idea to market

For a material good this road map will include the following important stages:

Map the knowledge base and all resources needed

For every step in the life-cycle of a product you need knowledge/skills and resources. Primarily, the DN is a knowledge and a logistical organization. It processes information and knowledge, plans and coordinates. Individual tasks are carried out within member organizations.

You are not putting together a classical startup company. Every organization that will adhere to the DN will participate with human resources to tackle specific tasks and with its own resources. At this stage we need to know what type of knowledge/know-how and resources are needed in order to identify sources or potential partners. Try to envision what it will take in terms of facilities and instrumentation to complete the path from the idea to the market. You can concentrate more on the R&D, prototyping and design, leaving the details for manufacturing and distribution for later.

Note: Financial resources are NOT needed for the DN. Every member of the DN assumes all the costs involved in the completion of their specific task. This is an important feature of the DN, there are no financial transaction within the organization during development. See bellow.

Identify key players that could be part of the network

This is where you start to put together the DN. The results form the last two sections become very important here. Start by completing the knowledge base first by making a complete list of all organizations you know that posses the knowledge and skills to cover this base. The DN is a knowledge organization, therefore knowledge is the most important parameter, you should consider it first. Make an exhaustive list. You will reduce it later by considering other parameters. It is not easy to come up with a final optimal list of potential partners. There are many parameters that you should take into consideration, and you will face a whole variety of complications.

Criteria of choice or discrimination

- Knowledge and skills
- Processes
- Interest of the organization in the project

Degree of proximity you have with an organization (do you know somebody there?)
Resources possessed by the organization: all identified above
Size of the organization
"Health" of the organization
Location
Access to market
Culture
- Other...

Engage the potential partners

After you have constructed your list of potential partners it is now time to present the idea and the DN implementation plan to all of them. Engage initial potential partners one-on-one first, in a strategic order. Keep in mind that you can use the results from previous encounters in future encounters. We advice to start on the market(ing) side. Once a critical mass is reached, the organization can grow through the general offer process -see bellow. Use the General Offer Form and the Collaboration and the Collaboration and Transfer of Ownership Agreement to cement relations.

See Collaboration Principles from OpenKolab.

Member-organizations types and the DN economy

The DN must reward every member according to its primary motivations. This is crucial for the subsistence of the DN! It is important to realize that in order for the DN to exist and to be productive (or to generate some economical or social value) different types of values and exchange structures must be identified and be implemented. The DN is an organic structure held together only by interest (the adherence is at-will, which means that any entity can leave the DN anytime for no reasons). The following is a temporary table of potential DN member types, their primary motivations, and their specific contributions.

Value exchange mechanisms

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Discovery Network Value Exchange Mechanism

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Discovery Network Back Office Catalog

Infrastructure

The infrastructure is a coherent system of tools (all of those listed bellow) that allow the DN to function. In our opinion, the best infrastructure is a mashup. Its advantages are:

Use free tools already available, freeing resources, avoiding creating redundancy, ...
Delegate development to external entities: these tools are continuously improved by their developers
Adopt open standards to insure interoperability and continuity

The number of free services available on the Internet increases with time. These services are constantly improving. Interoperability is a main concern of service providers, as it increases the value of their products, which makes interoperability to naturally increase with time (example: Twitter talks to Facebook, to Blog, to ...). Service providers offer open API, inviting external entities to build value around their core products. Open API is the mechanism by which one can build a mashup infrastructure, integrating all needed tools/services. The only work involved is to maintain communication between different free services available, to constantly improve the infrastructure by adopting new and better tools/services, and to insure the security of the created network. A powerful DN can also influence new development of tools to its own needs. The costs of developing and maintaining a mashup infrastructure represents a infinitesimal fraction of the costs for developing the entire infrastructure.

For simple cases the infrastructure is already there! For example, one can find all needed services within Google's constellation of free products. These products are already integrated, and can be accessed with a single account. See example of a LEGO-type infrastructure here

Potential problems

Make sure that data is easily transferable to other service providers, if one service is no longer available or becomes obsolete. This problem might become insignificant as interoperability increases.
Security.

Legal form

The legal form is not an easy question...

An open enterprise, can be understood as an infrastructure of communication, coordination and collaboration, as a tool, NOT as a legal entity. We can also talk about a DN, which is a decentralized, value-based collaborative network of individuals, private organizations and academic organizations.

Members of a DN ARE legal entities and tax payers.

This is important in order to allow the DN to spread across the globe, to be fluid, and also to allow it to interface with other similar networks (communities like open source software, open manufacturing and 3D printing), which, as we are starting to understand, are very important for DN to reduce the costs of our products and to insure continuity for our clients, etc.

What is important for a venture is to grow its market value, not how that value grows. We have the technology to take input from a wide base of contributors, to filter it, and to add it up coherently. Even if the input is very small, worth one hour of work, we still want it, because thousands of people are willing to give us that, and we want it all. The classical model takes in only large portions of value from a limited number of individuals, which are supposed to produce at their maximum capacity. With the new model we want to cast the net wide, to collect as much as we can. This is why Wikipedia surpassed in volume Britanica in only a few years! This model has already been demonstrated to be viable. We cannot do that if we treat every member as an employee. Members, by the hundreds, need to be able to freely come in and out of the organization, adding value to the product a bit at the time.

The internal structure of the group must be maintained flexible. Sub-groups must form dynamically around projects and they can dissolve once the work is completed, to be recycled into other soub-groups within the larger network. Because there is no formal status within the organization, this reshuffling can take place spontaneously. The internal bureaucracy must be greatly diminished.

How is the compensation handled? An independent entity takes care of billing the customer on the market side, and of distributing the income to every member in proportion to their respective contributions. Members declare their revenue in the country of their residence. The independent entity is not part of the DN, it only offers a service to the members of the DN group. We can create a non-profit to fulfill that role. If the DN would be a legal classical form it would be harder to solve the income tax problem, and the logistics for paying contributors distributed all over the planet will become more complex.

This independent entity can be understood as a value accounting organization. Every concrete contribution to the value of the enterprise is registered/recorded and evaluated. When products are exchanged on the market their value is actualized. The revenues generated from that exchange is redistributed to members according to a specific and explicit value sharing scheme. We could also consider an open alternative currency being used within the network, used to exchange value among members. The independent value accounting organization manages the internal flow of value.

Individuals can incorporate themselves. Corporations can become members of the network, as any other form of organization.

Can this be implemented? I believe that our technology today, all these tools of communication, coordination and automated logistics, allows such loose and flexible structures to maintain their coherence. The key concept is self-organization, set in motion by a powerful sent of incentives, which can be created by communicating effectively and in real time the sources of value (rewords) and the system of flow of value, in and within the group.

If we want to harvest the planet this is, in my opinion, the only way around. Otherwise we go back to large chunks of value contributions from a limited number of individuals, concentrated mostly locally, and we miss the technological revolution boat.

We need legal agreements between members of some sort, firstly to grantee to contributors that they WILL BE paid (that’s where the main insensitives are) and secondly, to secure our tangible assets. Members will have to disclose their full identity.

Products would be produced and handled by member organizations, by licensed manufacturers, which can take any legal form. They would take responsibility for quality and guaranty. These manufacturers would not be partners of the DN, they would be PART OF the DN.

Tools

Communication, collaboration and coordination

For a relatively small DN there is only a need for common communication tools: teleconference, webinar or video-conference (examples: Webex, Dimdim), email. A simple online content management tool is also needed. This includes communication, sharing, collaboration, database, and search capability. The complexity of content management within a network grows as n!, where n is the number of entities in collaboration. For a larger network knowledge management tools become crucial.

Logistical tools

Logistical tools are needed to carry out complex actions.

Project management

Because the DN is a knowledge organization, content is really what is processed by this organization. Therefore a project management system can be directly grafted on a content management system, for a better integration between planning, action and their matter.

Tools:

List and comparison of project management software. Project Management Training (open source)

See more on:

Project management
AACE International website
- Total cost management (TCM)
- Download the TCM General Overview PowerPoint presentation
Project Management Institute (PMI)
- A Guide to the Project Management Body of Knowledge (PMBOK Guide)
International Project Management Association (IPMA)
- IPMA Competence Baseline (ICB)

Knowledge management (KM)

The DN is a knowledge organization. Processes that are not related to top level information and knowledge related to the product idea around which the DN was formed, or related to the technology on which the applications are built, are dealt with at lower levels, within member-organizations. At the DN level the concern is to develop ideas and to orchestrate the process of their embodiment. This requires a fine interaction between knowledge bearers, as well as very effective methods to import new information and knowledge from external sources, to codify it, and to communicate it.

Read: Developing a Model of Next Generation Knowledge Management.pdf

Management of proprietary knowledge

Usually people use the confusing term "intellectual property" to talk about this issue. Let's use the term "patentable ideas" to emphasize on the fact that in most cases ideas and knowledge can be more profitable to a group or to the entire society if they are shared. The contributions to the product which lies at the hart of a DN must be rewarded proportionally. There must exist a proper way to account for knowledge, know-how, and clever solutions to problems. We suggest to adopt a loose politic for patentable ideas, to count on speed not on defense, and to maximize collaboration/exchange. Some might find it difficult to go against the actual culture, in this case we suggest a smooth transition.

Legal tools

Insuring the existence of the DN: General partnership status, partnership agreement, others...
Needed to engage potential members of the network: Business Plan, Confidentiality Agreement, others...
Needed to establish relations: Multiparty covenant not to compete (CNC), Multiparty mutual nondisclosure agreement, others...
Needed to engage in common projects: sharing resources, participation, redistributions of profits, distribution of risks, others...
Others

Get the Collaboration and Transfer of Ownership Agreement - still under construction

Some of these tools were conceived to be used in a classical business environment. New legal tools must be tailored for this new type of association.

Conflict management tools

We need to distinguish two different sources of conflict within large open collaborative systems. One is systematic and can be systematically avoided by design. The solution can be be part of, or embedded in the platform. The other one is the human factor, crating random conflicts for different reasons.

Going back to the systematic one, conflicts might come from diversity of opinions, values, visions, goals, etc. that must be narrowed down, aligned one way or another in a free environment, in which no one can control no one. I would give it priority, because of its systematic nature and because it is specific to this sort of creative/productive organizations. We really need to overcome these problems in order to increase the survival rate of collaborative systems. The remedy is this case is not a conflict resolution mechanism, applied after the conflict arises, but rather a way to prevent conflict from arising, to diffuse problems before they even emerge. See this article created by Suresh Fernando.

The second type might come from misunderstanding, non-respect of rules, abuse of power (if some relations of power are still allowed within the system), etc. Because of their unpredictable nature, these cases generally cannot be dealt with before they develop into observable patterns of conflict. So the approach is to design/borrow tools to deal with the conflict after it manifests itself.

Get involved in a collaborative project to design these tools and methods.

Financial tools

In general, the project itself does't need financing, because every participant brings in resources and assumes all costs incurred for his involvement. This is different from classical ventures. The Discovery Network doesn't necessarily need a formal financial infrastructure while a product is designed, built and marketed. But eventually profits will be generated, and these profits must be redistributed to all participants in proportion with their input. A financial service must be designed for this purpose.

The elimination of financial transactions during development makes the structure more dynamic. Most of DN-s will not reach fruition, as it is the case with any venture, and when a DN fails there will be nothing to share/salvage. All resources brought within the DN have probably not even left their original place, and can be reassigned other tasks within the organizations where they belong. For example, if someone puts a lab/shop at the disposal of the group, this lab/shop still belongs to the individual/organization who provides it.

Value accounting, reputation and role

Our open and decentralized value network requires a sound value accounting system, a fair reputation system and an accurate role assigning system.

- The value accounting system records and evaluates every member's input. Revenues are calculated in terms of member's contributions. This system outputs a map of value sources and the value flow system within and outside of the network. See more on our Value system document.
- The reputation system incentivizes good behavior within our community and helps to focus attention. It plays an important role in the creation and the flow of value within the network.
- The role assigning system incites voluntary subordination; it plays an important role in self-organization.

All these systems are necessary to induce tight self-organization within an open and decentralized value network like SENSORICA, and to render the network creative and productive.