Creative Commons (BY NC SA) licence granted by the authors. First published on Aug 04, 2014

Last Modified on April 09, 2017. Please keep us updated if you adopt this model and make improvements.

By Tiberius Brastaviceanu,,  add your name here

ouishare

Content on this document is Creative Commons (BY NC SA). Only SENSORICA logo is copyright

Dealing with companies interested in SENSORICA’s services

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This document explains the normative system of SENSORICA


Table of contents

General considerations

The case of material products

Rationale

Introduction

Framing

Licensing

The p2p license case

The CC share alike license

Links

Discussions

The case of services [NEW]

Consultancy services

Concrete cases

Background

Agreement templates


General considerations

The overarching concern here is to be able to establish economic relationships with traditional organizations that are beneficial for them and for the network. Only mutually beneficial relations are healthy. In order to achieve that, we need to put in place a transparent process that takes into consideration all the eventualities, and that exposes all costs and potential benefits for all the parties involved.

Traditional companies always try to minimize their costs. This is in their DNA. One manifestation of this is a negotiation for lower development costs, or lower royalties, or lower price of products and services. Sensoricans need to evaluate their needs in order to complete the project in an open context (open project management). Traditional organizations need to understand these needs and how they are linked to the probability of success of the project.

From our experience, mainstream people have a distorted idea about open source, and open and collaborative communities. To simplify, the myth is that open source is free and that in open and collaborative communities people do pro bono work. There is this general perception that open communities are like magic gardens, one can propose a project and it will be realized by magic, people doing all the good work for fun. These misperceptions do have a justification, they do come from somewhere. They are generated by large collaborative projects like Wikipedia or Linux, which  are very special cases of generic “products” that touch millions of individuals in various ways. These projects function at a very large scale, where they generate large scale effects. They become statistically stable and predictable, even in a pro bono contributory regime. In other words, at these scales of millions of users, there is 100% probability that someone out there will make a positive contribution in effective time, for various reasons. This is not the case in open projects that function at a smaller scale. The statistics are simply not there to insure 100% response probability from a small group of contributors. In order to improve the chances, other incentives must be added around contributions, and some of them are tangible rewards.

Small scale open and collaborative projects, even if they exist in a larger ecosystem of open projects and developers, are not magical gardens. In order to get things done in a predictable manner, a proper set of incentives must be put in place, which requires a new set of skills for overseeing open projects. When negotiating a relationship with a traditional organization some knowledgeable peers from the network should work with the representative of the organization in order to communicate the dynamic of open projects and the conditions for their success.

We now have data that shows that working with the SENSORICA OVN on innovation leads to at least 30% in development costs savings. Some projects have been delivered with 60% cost savings, on the threshold of project stability. Therefore, SENSORICA is very competitive on the market for supplying innovation.

ATTENTION: if a project is not set up well, with the proper set of incentives that can ensure its success, responding to pressure put by a traditional organization to cut costs, the project can fail. In this case, the organization that doesn’t understand open projects will put the blame on the SENSORICA network, undermining its reputation. It is important to align the company’s cost saving tendencies with its needs for project success, and reach an agreement that will work.  

The case of material products

Rationale

Introduction

This document is about formalization of relations between SENSORICA affiliates and companies that are interested in our projects or technology for commercial purposes. It describes the process to establish these relations, based on different cases.

Framing

How do we handle our technology in order to benefit from it?

Everything that SENSORICA develops is open source and anyone can use it for commercial purposes. Someone can find our R&D documents online and decide to do something with the technology without asking us anything and without us knowing anything about it. That is fine, this process doesn’t require any additional resources form the network. Our strategy for sustainability relies on speed of innovation, not on protection.

Here we are concerned with the eventuality of a company being interested in the technology that we develop, that contacts us to establish some type of economic relationship, which require additional resources to be deployed by the network. How can we establish relationships in such a way that the outcomes benefit both, the company and the network. Any relation that is not mutually beneficial is not a healthy relationship, and can lead to disappointment on either side, or can lead to a project that doesn’t advance well.

Licensing

The first thought that comes to mind is licensing, which is a protective measure. In other words, the company that is interested in a development relation with sensoricans will sign a licensing agreement with the Custodian, guaranteeing that those who are contributing to the development project will get returns in the future from the company’s commercial activities.

We have had many discussions in the past on this subject and we haven't really reach a consensus. That is because this problem doesn't have a single solution. Not even the experts in p2p agree on it. The question of licensing boils down to a compromise. The more protection we put in place, the less participation we get, which can slow down the speed of innovation. The p2p license is seen by some as a good compromise.

It essentially gives free commercial rights to community members, but asks royalties for those who are not part of the community. It's like a patent that is shared by community members, assuming that there is a mechanism to distinguish between members and nonmembers, which is not evident with long tail organizations.

To implement this, all technology under this regime would need to be transferred to the Custodian as an I.P. - type asset.

The argument for, is that it can insure some benefits for the community. Some arguments against are summarized in Tibi’s essay.

In the past, we have reached a loose agreement to let project initiators choose the level of protection and have projects compete for resources. See Project types. So let's consider two cases.

The p2p license case

In this case, there is a legal obligation for the company to pay royalties. If a company is interested in one of our technology they need to sign a licensing agreement with SENSORICA’s Custodian, for all those involved in the project, assuming that the project has a p2p license. This agreement would contain items such as royalties and conditions to cooperate, among other things. The redistribution of royalties would be governed by an Access to benefits agreement (signed by the Custodian) and algorithm (implemented in the NRP-VAS). We don't have such agreements already written, and no project has been labeled with the p2p license.

ToDo: Those who are interested in this case can develop what's needed.

The interested company takes care of production and distribution.

If the company needs help for implementation or requires transfer of know how, sensoricans should ask for payment. Those who have the skills within the network can benefit from it, and the transactions need to be transparent and dues need to be paid to SENSORICA (the 5% we are using now). Non transparency should raise red flags and if issues are not resolved in a friendly manner it should affect reputation, related to the respect of other people's contributions to the same project.

In any case, I think there should be an obligation to contribute to the documentation of the project if new information or new knowledge are generated. Failing to do so will most probably obfuscate those who have contributed to the project and can generate conflict, which might results in reputation costs for lack of respect for other participants and for not following good collaborative practices.

The CC share alike license

This case is different from the previous one, in that there is no legal obligation for the interested company to pay any royalties. There is absolutely no legal protection for commercial rights. The only protection is that no one can patent the technology, and that if the company copies and improves we can copy back, saving the costs for the improvements that the company made.

The reality is that the recipe doesn't make the cake. Know how is needed in order to implement something efficiently and effectively.

  1. The company might need some guidance for implementation, or it might need transfer of knowhow, and therefore it might be willing to pay for all that in order to save development costs and time.
  2. Moreover, the company might recognize in SENSORICA a potential for further innovation, and might want to establish a repetitive game (i.e. an ongoing relation of collaboration) with us. They might be willing to share with us some revenue, to buy our loyalty (to make sure that we respond, and jump to solve their technical problems). We can also see it as a form of outsourcing innovation for the company. All this assumes that SENSORICA establishes a good reputation for itself for rapid innovation through funnelling and remixing open source, through established relations with open source communities.
  3. Furthermore, the company might want us to become a supplier, which is a very simple case to treat, the company pays for parts.
  4. The trivial case is when the company doesn't find value in any of that, so they can just copy and sell without even calling us, which is fine.

#2 seems to be a good outcome. It can be treated by negotiating a % of sales for as long as sensoricans cooperate with them. This % can also be preset for every project, as part of the project's Governance and Access to benefits (used to be called Value Equation), to make it easier for everyone later, that's the price, take it or leave it.

 

ToDo: shoot a % if you agree with the idea.

[Frederic believes this can be anywhere from 0.5 to 5%]

#3 is easy to deal with, we manufacture the parts, sell them to the company and we share that revenue according to the value equation.

ATTENTION we had calls from companies, telling us to produce a prototype for them, absorbing all the development cost, promising that later they will order larger volumes, without providing any guarantee for that. This is very risky, unless the development work can lead to something else to offset a potential loss. In other words, some companies will erect a large potential in front of us, in order to stimulate sensoricans to deploy their own resources hoping to generate revenues from larger volume sales in the future, but the endgame for them is to have the development done for low costs and manufacture it somewhere else.

#4 is trivial, nothing needs to be done, other than individuals deciding not to cooperate with such entities.

#1 resembles the case discussed for the p2p license, if the company needs guidance.

In all these cases, there should be an obligation to contribute to the documentation if new information or new knowledge are generated. Failing to do so will most probably obfuscate those who have contributed to the project and can generate conflict, which might results in reputation costs for lack of respect for other participants and for not following good collaborative practices.

Links

Steve’s doc for managing relations between sensorica and Ohio

Normative system main doc

Product Licensing

SENSORICA service system

Discussions

From an email by Tibi - case of a manufacturer

As Abran mentioned, we are very busy with a few important projects, and everyone needs to understand what to expect in order to judge how much effort we need to deploy for your request. I am going back to our initial exchange in order to start formalizing our relationship.

I asked

We do have the capability to customize a piezo pump for your application. It also depends on the collaboration arrangement. I suppose that you have a commercial application in mind, therefore the community will require some form of compensation.

You answered

As we said, this pump we will be used for commercial application, we are quite okay to pay you the money for same. Once trails becomes successful, we would require same in bulk qty for commercial application

If this is your website, I read

Microbiz Network India has embarked with innovative technologies; it is a manufacturer and developer of such creative and innovative products and services.

I think we have a few options in front of us, that would benefit everyone involved. What I don't know, is the amount of investment your company can afford for the development of these new products, which would make your business viable.

You can correct me if I am wrong, but I am starting with the following assumptions:

If your primary intention at this point is to reduce your R&D costs, I think SENSORICA is the best place for you. Based on my assumptions, the options would be

  1. Become an affiliate of the network and develop your project as a SENSORICA project. Make the SENSORICA network your distributed R&D facility, or use SENSORICA as your innovation pipeline.
  2. Become a sponsor for a project conducted by SENSORICA. Crowdsource innovation through SENSORICA, without getting involved in too much in the process, let sensoricans drive it for you. Projects are open source, can be less transparent, but open.
  3. Become a client of the SENSORICA network for innovation and R&D services

In terms of monetary ($) costs for you, 1 is the least expensive option, 3 is the most expensive. Our history shows that we option 2 is at least 50% less expensive then normal market prices.

In terms of your involvement in the project, option 1 is the one that requires your presence, attention, as well as in kind contributions. In other words, you drive the project within the SENSORICA environment, benefiting from the network's ability to crowdsource innovation efficiently.

Feel free to ask questions if you don't understand some of the above language.

 

Here's an option that I find difficult in this situation: Since your company is a manufacturer, it would be very difficult to obtain a partnership with sensoricans where they take a risk to build a working prototype without a fair immediate compensation for these design and prototyping phases. In other words, going back to your phrase, and please correct me if I am wrong

we are quite okay to pay you the money for same.

The price for a few of these devices that would be made by SENSORICA would include R&D costs, that your company would need to pay as we progress through the design and prototyping phase. It is simply not possible to do it otherwise, because sensoricans only contribute to projects if they find an interest in it.

Once trails becomes successful, we would require same in bulk qty for commercial application

 

I don't think sensoricans would take a risk to produce a few units at low cost for your company now, hopping to sell a larger volume later, because they know that your company is a manufacturer, so it can produce these products at a lower cost in India. Again, this is not my own wish or decision, I am only informing you about how I think sensoricans would react to such a proposition. Nothing stops you from trying anyway  : )

Having said all that, I think that SENSORICA is the best thing you could find while searching for R&D support for your piezo-based product. Network-type organizations are dominating the innovation landscape nowadays. All the recent and most disruptive technologies, like 3D printing, drones, and the blockchain came out of networks. Deciding to go with the SENSORICA network, one way or another, is, in my opinion, a very important strategic decision for your company.  

Thank you for spending the time to go through this long email.

Feel free to send me your questions.

The case of services [NEW]

SENSORICA offers a variety of services - see Services section, from educational to consultancy.  

Consultancy services

Proposed Rules - still a draft, please help improve

If a SENSORICA affiliate uses the SENSORICA brand or represents himself/herself as a SENSORICA affiliate to acquire a paid consultancy contract, he or she must act transparently and announce the opportunity to the network using the main communication channel, with the starting subject mention ‘’New consultancy contract’’. The price of the contract must be exposed and a detailed description of the contract must be shared with the network.

See more on Governance associated with using the Sensorica brand.

The affiliate must give back to the Sensorica network 5% of the price received from the client, which is the fee applied across the board for all the network’s commercial activities. It is strongly recommended that the affiliate uses other affiliates as collaborators if the project requires. It is also strongly recommended that the affiliates who seek consultancy services factors the 5% in the price.

In some particular cases, the affiliate might be able to pay 5% and they will not be held morally accountable from not doing it. Examples: the remuneration is only sufficient for subsistence and the affiliate providing the service cannot negotiate the price. In these cases, all of the above applies, and the affiliate must make the case that the funds are only sufficient for subsistence and cannot negotiate the price.

Any SENSORICA affiliate can report to the network cases that don’t respect these rules. The network has the rules and the 5% figure to judge the actions of the affiliate in cause. The affiliate in cause uncovered by this process will suffer a loss of credibility and reputation within the network. Any affiliate will be able to write a Reputation case and link it to the Background section of this set of rules, which exposes the individual and facts about the practice and becomes part of SENSORICA’s governance development history. In some cases, exclusion from various network processes might be considered.

Concrete cases

Tibi has been approached by the European Commission to review funding proposals in the realm of the new economy. Tibi has obtained this opportunity because of his activities within the SENSORICA OVN. Since the European Commission’s rates are above the required amounts for subsistence, Tibi will pay 5% to SENSORICA’s Custodian, even though he cannot negotiate the price.  

Background

Over the years, the OuiShare Paris network developed problems related to the perception of fairness and fair play, as trust in some of the pillars and co-funders of the network eroded in the context of paid consultancy services/contracts. In short, some of the most visible OuiShare Paris members / connectors were solicited by different organizations for consultancy services. In some cases, the deals were transparent, in others less transparent. Some of these members were giving a portion of their earnings back to the network, others were not. The lack of structure in OuiShare lead to the development of a sentiment of unfairness.

Agreement templates

The partner / company cannot hire a sensorican from one of the projects within 6 months. There is a 20% contingency fee on first year salary. [proposed by Lai]