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Value System

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This document explains the value system operating within Sensorica, an open, decentralized, and self-organizing value network, designing, producing and distributing optical fiber-based sensors.

This work is moving on github. Bob is using REA (for Resources, Events and Agents) designed by Bill McCarthy of Michigan State University (See more on Bill McCarthy’s website https://www.msu.edu/~mccarth4/). See a prototype HERE

Table of contents

Other important documents

Preliminary considerations

Important processes

About value

Contribution Accounting system

Layout of the contribution accounting system

The recording system

Categories of contributions

Contributions in time: activities/tasks database

See more contribution types HERE.

Current system for recording continuous contributions

Projects for improvements

The evaluation system

Back office catalog (for continuous contributions)

Contribution modulators - temporal aspects

Earliness Seniority

The Value Equation

Epistemological considerations

General theoretical framework

Dimensions of Value

Discussions

Project Management

Visualisation system

States of a value network

Integrating a gift economy within Sensorica

The pool of sharebles and the commons

Discrete Infusion of value

Large tangible contributions

Infusion of financial capital

On angel capital

Development funds

Value exchange

Value export

Other questions

Time in contribution accounting, individual members vs organization member

Value for the community or for self?

The super value network

Risk and the value equation

Link between governance and the value system

The founder/initiator problem

Definitions

Propositions

Tentative definitions

Discussions

Seniority or long-term commitment

On paid contributions

Salary [see email from Remi]

Other dimensions of Value

Reputation and the value equation

Boundary problem

Ideas as contributions

Other important documents

More stuff

Annex

Different types of value networks

Other important documents

• See value networks on Sensorica’s website
• Role System
• Reputation System
• Value Networks - moving forward

Preliminary considerations

Our open, decentralized and self-organizing value network requires sound contribution accounting and exchange systems, a fair reputation system, a role system, a feedback system, an incentive system... See the infrastructure.

• The contribution accounting system assists members in recording and evaluating contribution to projects. Some projects generate products which are exchanged on the market, generating revenue. The contribution accounting system calculates revenue for every contributor, in proportion to contributions. This system outputs a map of value sources, points of consumption and transformation, as well as the value flow distribution. ^[1]
• The value exchange system insures exchange of value among Sensorica members.

All these sub-systems are necessary to incentivize activity, to induce tight self-organization within Sensorica value network, to focus activities according to priorities, and to render the network creative and productive. These systems are designed for a fractal structure^[2].  

Another important aspect of value networks is the pool of shareables and the commons. See more on The pool of shareables and the commons section.

The value system interfaces with the individual profiles and has write access to them.

The architecture of the value system depends on the type of value network. See annex Different types of value networks.

Important characteristics

Our value system must be compatible with a contribution-based compensation model. It must account for tangible, as well as intangible value. The value system is able to capture economic events in context and to follow their effects on the economic system from their creation to the point of consumption of different products and services that have been influenced by these events. It must be capable of taking into consideration many small and sporadic contributions, and to incentivize such contributions, in parallel with long-term commitments.

The value system is designed to be scalable to global proportions and to operate in a swarm mode, i.e. to extract value from a long-tail distribution.

The value system is a fractal structure, a network of networks in which value flows uninhibited and individual contributions are tracked.

The value system manages flows.

Agents in the value system are individuals, any type of organization, even those organized as decentralized networks.

Examples of events are: time spent (doing R&D, manufacturing, office work...), a financial contribution to a project; sharing of a tool, equipment, space, etc.; giving access to a new market, an organization (that is using one’s social capital), etc.

The system takes into consideration many resources like time, materials, physical and virtual spaces, ...

Important processes

The value system must take into consideration the following processes:

• the creation of value within the Sensorica network through the creativity and the labor of its members, individually and/or in collaboration,
• the transformation of value, i.e. transposing value from one form into another form.
• the consumption of value, i.e. value used for sustaining the value network, including for creation and transformation of value.
• the destruction of value, as distinct from consumption, i.e. a process through which value simply vanishes without any positive effect on the value network.
• the infusion/injection of value from value pools not strongly connected with Sensorica network [ex. grants, donations, free participation/help, other networks’ assets],
• the exchange of value within the Sensorica network, among members, and
• the export of value to entities not strongly connected with the Sensorica network, in exchange of something else, i.e. exchange with the market.  

About value

Working definition: value is what moves individuals to do something.

See document What is value? 

Contribution Accounting system

See the reduced form of this system.

ANNOUNCEMENT: At this moment we are running a case study on contribution accounting based on the Mosquito project. We are building a team around this issue to design the system. See pilot project document - Sensorica - Concrete study of a value system.  

Designing a system of contribution accounting is paramount, one that accounts for abundant things with abundant currency and scarce things with scarce currency. One that “understands” the creation, transformation and the flow of value.

This section describes how we account for the creation of value within the Sensorica value network. All sources of different types of value must be identified and a valuation mechanism must be put in place - see The value equation. Value created must be attributed to its creators.

The contribution accounting system is NOT a currency system, or a value exchange system. It manages the amalgamation of value during value creation processes, into products and services. It keeps a tab on who is doing what (role), how much (value) and how well (reputation) in a particular project. Its output is a distribution of equity for a particular project. Once value is created it is managed by the value exchange system, a currency.

Layout of the contribution accounting system

This architecture is now changing dramatically!!! This diagram is old stuff...

The recording system

This system assists members in recording/logging contributions.

Rewards (revenues) come some time after the value creation process, after efforts have been deployed. Faire redistribution of revenue, in proportion to everyone’s contribution, which arrives at a time in the future, requires information on past contributions, risks... This is why no matter how rewards will be redistributed among participants, it is always important to record enough information in the present.  

 Contributions can be time (which is complemented by a description of activities/tasks performed), money (spent on a particular project), a virtual or physical space (for a given activity within a given project), materials (including tools/instruments), access to resources or to the market (using social capital), etc.

Contributions have quantities AND qualities associated with them.

Categories of contributions

Contributions in time: activities/tasks database

Captures the amount of time spent by an active member. It is a quantitative measure of continuous contributions.

In the first version of the value system every member of Sensorica must log activities within a database. A future version will link the Back Office Catalog with project management and workflow tools. When a task is marked as completed it will automatically be transferred to the activities/tasks database.

This database is organized to map projects that have a direct path to market, i.e. resulting in products/services that will be exchanged on the market and generate revenues. This is also a source of incentives (revenue, acknowledgement, etc.). The database also contains other categories/projects which don’t have a traced path to a particular market. These are exploratory projects or passion-driven projects (see section on Integrating a gift economy within Sensorica).

See more contribution types HERE.

Current system for recording continuous contributions

We use Google spreadsheets in conjunction with their associated forms to record contributions. Three types of contributions are recorded: time, material and financial. This system requires active members to open a form (on a webpage or by opening the spreadsheet directly) and to input data.

In parallel, we are developing the second version of the value system. One simple example of data input form is HERE. This will evolve very fast.

Projects for improvements

Troy has setup a blank Drupal CMS system, here: http://performancedetail.co.za.

Bob is working on the second version of the value system.

The evaluation system

This system assists members in evaluating contributions. Contributions must be evaluated for every member, for every project.

The evaluation mechanism associates a quantity to the contribution. This quantity is about how much value has been created by a contribution. Qualities of contributions like seniority (connected to loyalty), commitment, regularity, etc. act as modulators.

The evaluation of continuous contributions usually takes place at a later time after an activity has been recorded. Passion-driven activities, that are not directly related to a product or to a market, can be evaluated at a later time, once they are integrated into a project that has a defined path to the market.

The evaluation process is very context sensitive and subjective. The value of a contribution has many dimensions, see The value equation for continuous contributions.

[See discussions with Kurt, Bayle and Ishan in our mailing list about valuation.]

Back office catalog (for continuous contributions)

The Back Office Catalog^[3] is an online collaborative tool used to assign value to deterministic, recurrent^[4] back office tasks. It contains all imaginable such tasks. Tasks are organized in categories. Each task is assigned a number of points (it is weighted), which reflects the effort needed to accomplish the task, the skills involved in it, the complexity of the task, the means used, etc. This database is searchable, users can add more tasks, and everyone is able to evaluate tasks, i.e. to allocate a number of points for every task (valuation process). All inputs for one particular task are averaged! As more and more users participate in the valuation process the value of each task reaches a (statistically) stable level, which reflects the average, popular evaluation. The Back Office Catalog is used as a reference by everyone who needs it, in any value network.

It is advised to have a Back Office Catalog of relative values instead of absolute values. In other words, one particular task can be chosen as a reference task, to be compared with all other tasks. This would make the Back Office Catalog easily adaptable to different contexts.

The Back Office Catalog avoids tedious peer-evaluation of every task for every member. Members provide relative evaluations to tasks from time to time. The catalog is automatically applied to all contributions, reducing the load for evaluation on the community.  

Contribution modulators - temporal aspects

The database of contributions contains information about the type of the contribution (time, financial, material, space), the type of activities involved in a time contribution (experimental work, office work, sales, meetings...), the project for which the contribution was made, the mane of the member who made the contribution, the date when the contribution was made, etc.

The idea here is to understand how different aspects of time, extracted from the temporal distribution of contributions, can influence value creation within the value network.

The question we need to ask is how can a given aspect of time affect value? If a given aspect of time can indeed affect value, we then need to design a set of positive and negative incentives in order to influence the proper behaviour.

On Mars 23, 2012 Tibi sent an email to Sensorica (members access only) proposing to extract 3 parameters from the temporal distribution of contributions, and add them as modulators of the value equation: seniority, regularity and commitment. This proposition generated a discussion and we realized that further analysis was needed.

Earliness Seniority

Kurt proposed to change the name of seniority, we’ll render the concept more explicit and chose a different name [Tibi August 26, 2012]. Kurt proposed to define this parameter as continuous “membership” and maintained that seniority is not the proper term to use. He also pointed to a problem:  “...people contributing early then taking off being credited with “seniority” Tibi changed “seniority” it in the table to “earliness” on Jan 1th, 2014

The earliness seniority factor was first advocated by Francois. Ivan was also in favor of it. Tibi was against it in the beginning, advancing the argument that earliness seniority is naturally favorable to members (no need to formally take it into consideration), because the more time on spends within the network the higher the reputation, the greater the influence, which translates into a greater ability to generate and extract value. The concepts of periodicity regularity and frequency commitment were introduced into the discussion by Kurt, I think.

Periodicity Regularity

Tibi modified “regularity” to “periodicity” as proposed by Kurt

Dimension of attention.

Frequency Commitment

Tibi modified “commitment” to “frequency” as proposed by Kurt

Dimension of attention.

The Value Equation

This value equation will be used to calculate a % of total revenue taking into consideration all the parameters/indices below (still under development...). It’s a dimension reduction problem (as Bayle pointed out). The % of total revenue is calculated based on past contributions. We can associate quantities and qualities to contributions.

We are now building a sand square where we can explore different forms of the value equation. ATTENTION this is still very experimental!!!

Epistemological considerations

The value equation doesn't represent a law of nature, like equations in physics. It does NOT describe a physical phenomena. It is designed with a purpose, to sustain value creation. It is linked to human behavior, to social dynamics. The empirical verification of such equation is a measure of its effects in terms of value creation, well-being of members and good management of resources, as it affects social dynamics.

General theoretical framework

We use dynamical systems theory as a general theoretical framework. We model value networks as living systems (see Sensorica as a living system document).

The states of a value network are understood as sets of characteristics of collective human behaviour. The emphasis is put on sharing, collaboration, creativity, production, ethics, thrivability…  

Value is seen as one of the most important factor determining human behaviour. The sources of value, the points of consumption, the nodes of transformation, the value exchange system, and the exchange with the environment (with the market) define a topology that influences collective behaviour.

The design of a value system is validated in terms of its outcomes; in terms of the stable dynamical patterns of human behaviour it generates, it terms of its associated attractors in the state space of the value network.

See also Sensorica metrics

[See discussions with Kurt, Bayle and Ishan in our mailing list about valuation]

Dimensions of Value

The equation contain different dimensions^[5]. Some candidate dimensions to consider can be found here: Value Mind Map^[6].

Principles of good dimension^[7]:

1. They are meaningful

1. their meaning is conveyed to non initiates reasonably accurately

2. They are composable

1. Some dimensions are functions of other dimensions

3. They are orthogonal

1. Their meanings do not overlap at a given level of composition

4. They are measurable

1. This may be directly measurable (in a mediated environment), or resolve to a measure based on human evaluation processes
2. Ideally they require no effort to track beyond doing the thing that is being measured

5. …?

References can be used, such as the market hourly salary for a given type of contribution. See also the Back office catalog section.

[this equation is just a proposition/starting point...please propose other forms] 

• F is the frequency
• P is the periodicity factor
• Ea(t) is the earliness factor, how early in the project the contribution is made, it is a dimension of risk.
• overall reputation factor Re(t), can be a function of time

• C represents measurable contributions (in any type of assets), its quantity is the result of a peer-evaluation process.
• role factor Ro, a constant associated with a role or a combination or roles played
• D represents measurable damage, a form of penalty, its quantity is the result of a peer-evaluation process.

Other factors can be taken into consideration: risk (see discussion on risk), founder or initiator, seniority and long-term commitment, add other potential factors...

See value accounting system simulations (work in progress). 

Discussions

Kurt July 2012

value equation (dimVals include attention (observers would earn in this dimension) participation (with dim of regularity == active inactive scalar) contribution (contributor) and delivery (highest form, have provided an asset to the network)

dimensions with respect to communication

Kurt [24 March 2013]: There is significant value in *capture.  Simply capturing all interactions is a foundational activity and needs to be rewarded explicitly.  Further *structuring this information so that it is useful is also important.  Finally another aspect is *referral (connecting the right people) or *surfacing (people to information) are also value dimensions, some of these are performed by systems and the value should accrue to the system by way of sustaining demonstratively valuable infrastructure.

A direct outcome of 'paying' for these activities a portion of the value described is that there is now a race to register value added and structure it in ways it can be discovered and to promote it.  I expect a certain cultural deference to be given to allow the originator to file themselves but no such function need be provided in the system.  This is using the land grab mentality of humans to beneficial effect.

Project Management

The project management system also informs the reputation and the role systems.

Accountability is an important quality of a member, and it is extracted from the project management system. It describes how well an active member keeps its promises with respect to temporal self-imposed limitations (or other limitations like budgets). It is important to reward reliability because some processes are time sensitive, or have strong temporal interdependencies.

Quality is another dimension of reputation, and it is related to how well a task is executed, a peer-evaluation process, which is part of the project management system.

A large number of tasks successfully completed show a greater commitment, another dimension of reputation.

A distribution of tasks undertaken by a member over the tasks map will present a picture of the roles^[10] played by the member within Sensorica value network. For example, if a member undertakes more engineering tasks, this member is recognized by the community to play a technical role, in a given area of expertise.  

Projects are also prioritised within a project management system. Some projects are rated higher than others in terms of importance and become higher priorities. There should be incentives for important projects. Members who participate in projects deemed important by the community, in an effective time, should be rewarded more. We can call this quality of active members sense of priority. Within the value equation this is linked to the importance factor.

Visualisation system

Different types of visualization tools are needed.

• Project pie: Every project has a value pie, which is an estimation of the value that went in, distributed over all contributors to this particular project.
• Product pie: Every product/service exchanged on the market has a value pie representing % of reward to be distributed to every member contributor, according to the Project pie associated with this product. The market value of the product is set by the market.  
• Member chart: Every member has a number of charts, which represent value deposited by this member within Sensorica, distributed over the entire array of projects, and other qualities of this member’s contributions.
• Sensorica charts: These charts represents the distribution of value over different projects of the value network. This is important to give a general picture of where value goes. In fact, some charts only map the distribution of effort, number of hours recorded per project and number of active participants per project. Other charts can map revenue generated per project.
• Propose other...

States of a value network

Description of different dimensions and metrics...

Identification of attractors...

Integrating a gift economy within Sensorica

We want to allow members of Sensorica to engage passionately. We want to include a gift economy in our model. We want revenue driven members as well as passion-driven members to be very active within Sensorica, and to avoid conflict/tension between these two groups.

In a corporation, if you spend too much time exploring stuff which is not directly aligned with immediate business goals you may get criticized for slowing down the machine, which is detrimental for those who are there to crank out profits. This tension between passionate engineers and the business contingent is well known.

If we want to allow passion within Sensorica, how can we reconcile that with the revenue-driven ambitions of some of our members?

Revenue is only generated whenever a product is exchanged on the market. But if we open the valve to passion a lot of activities will not be integrated into successful products (=those that reach the market). There will be two parallel innovation streams. One which will be market-driven, starting with a well identified need on the market and arranging activities to provide the solution. A second one which is purely driven by passion, which will look more like Brownian motion. These two streams are coupled. Passionate members have access to market-driven initiatives and can jump into the stream at any moment. On the other side, passionate work is recorded/visible, and market-driven members can get their inspiration from it.

Outcomes

• Some work activities are already part of a stream that leads to a market exchange
• Some work activities are not part of a stream that leads to a market exchange, but they can be picked up later by such stream.
• Some work activities will never reach the market.

Valuation is not only subjective and contextual, but also relative. In other words, we can only evaluate one contribution against others for one product or service to be exchanged on the market. So I think we need to uncouple activity recording and activity valuation. The valuation process must happen, in my opinion, at the moment when the product is assembled for the market, in that particular context. Activities are recorded as soon as they are completed, on a continuous basis. The information associated with activities must be sufficient to perform their valuation at a later time. Are there other alternatives?

There could be other valuation processes and many contribution accounting systems coexisting. From the database of recorded activities we can extract data and analyse it in different ways. There could be for example a mechanism to evaluate Sensorica's wealth in practical ideas, taking into consideration all ideas explored and documented, marketed or not, and showing the relative input of every member. I guess that we need to leave that option open to the community. Every member should have access to the recorded work and to the valuation engine to create different ways to analyse data and to display information. Different metrics for different things will emerge.

The pool of sharebles and the commons

Definitions

• Commons
• Pool of shareables 

Members can decide to donate a material (part, tool/instrument, consumable, space...) as part of the pool of sharebles or to keep it for themselves. For example, one member can transfer a given instrument to the pool of shareables, in which case it becomes accessible rent free for all members. In that case, every time this instrument is used by another active member it will not count as a contribution of value. If the same member decides to keep ownership of the instrument, every time it is used by anyone for a Sensorica project it will count as a contribution provided by this same member. Individually owned expensive built capital will most probably not go into the pool of sharebles, unless it is acquired with shared resources (with things from the pool of shareables). Individually owned small assets have a greater change to end up into the pool of shareables.

All tangibles acquired using the name of Sensorica, through crowdfunding for example, will automatically go into the pool of shareables.

All new knowledge developed will automatically go into the commons. There is no intellectual property within Sensorica.  

Members using items from the pool of tangible for Sensorica projects must take care the items they use, if they are destructible. Careless usage of destructible items can affect reputation. Careless damage can be deducted from revenue.

Discrete Infusion of value

Large tangible contributions

Large chunks of value that are brought into Sensorica should respect the principles behind the Value Exchange Mechanism document for a Discovery Network.

See precedent with Frederic (the handheld laser driver).

Infusion of financial capital

Investment (angel capital), grants and crowdfunding are very different things.

Investment: Scarce money (i.e. our standard fiat money) MUST chase a return.  That is the rule of the game.  Any non interest bearing abundant money we create to exchange and account for value with will not have such a requirement. That said time and attention are fundamentally scarce so people will still be looking for a 'return', but these returns will not be commoditized. Return on investment entails control, because the expectation of a return asks for accountability. With the current form of finance is that equity == control.  While there are voting and non-voting shares, if you need money, the guy with the money is going to expect voting shares, and likely, control.

The goal is NOT to eliminate scarce money, but rather to use it for what it is good at, and that is things requiring a concentration of wealth to succeed. Sensorica will not be building a nuclear reactor, or a bridge, or a pyramid any time soon. Initial funding in the form of investment is a more difficult starting point for a value network than Sensorica's current business model.  They require two different approaches.

The only problem with the current money system is that it is seen by almost everyone as the only practical system, and this is what Sensorica and others must prove is NOT true.

Grants are "free" in some sense, they only require the venture to stay on track. So they have no impact on how revenue is shared. They can be considered almost like revenue.  

Crowdfunding is a little different, it requires some value to flow back to the funding community, in most cases in nature. So it can be treated almost in the same manner as grants, knowing that some products or services will be donated or sold at cost price to the community, or that the knowledge produced will be shared with the community or widely.

From Ian: What better way to win consumer/customer support and commitment than by offering an opportunity to the crowd to literally buy-into the venture they are supporting? Imagine 50,000 supporters collaborating to provide $20 each to capitalize a new venture: Everyone of them is AUTOMATICALLY a disciple and salesman for the project ... and a potential customer.

On angel capital

At this point we don't see a simple way for someone to invest in Sensorica. First, Sensorica is not a legal entity. Second, we could broaden the definition of participation in projects to include only an infusion of financial capital. If we do this, how can we avoid the danger of being taken over by financiers?

The philosophy behind value networks is to put the economical power in the hands of individuals who are CREATING value. Should an individual who only contributes with money be considered an active member of Sensorica? In a sense this individual enables creation of value. But value networks are designed to enable creation and distribution of value by sharing other forms of capital, reducing the dependence on financial capital, on mainstream currencies

On the other side, corporate members of Sensorica are free to do whatever they want, they are independent entities with a life outside the network. They are free to seek financial capital.  

Members of Sensorica contribute to projects with materials, necessary for development. As long as these materials are only attainable with financial capital, by buying them on the market from other companies, this type of contribution can be seen as an injection of financial capital. To be coherent, we should accept similar contributions from a financier and count him/her in as an active member. If we do this, we need to make sure that other types of contributions are considered on the same level as financial contributions, in order to avoid giving more importance to those who only contribute with money.

Moreover, financial contributions should not be used to pay active members their work within Sensorica, because that would create a relation of dependence between members, outside of their actual and direct contribution to the network (value, role and reputation), which translates into political power bought with money. To circumvent this problem, we can suggest that the financier creates a classical company, highers all the active members he wants to pay for their work, absorbing them into a single entity, which becomes one (a single) active member of Sensorica, having only one vote in democratic decision making processes.

If we accept funding from a financier for general development (of new products), other than infrastructure, we face the allocation problem (going towards central top-down planning and decision making). In other words, having funds to be allocated for research and development requires a body to decide where the funds should go. This is in fact going back towards central planning. The ideal situation, the one we are trying to create, is to have all resources in the hands of contributors, active members, and to let every member decide where to spend, what risk to take. The ideal situation is a bottom up, distributed resource allocation system, a distributed planning. This is possible if we put in place a sound infrastructure for our value network, with a good system of incentives and a good analysis and feedback system, to allow every individual to make rational decisions based on real-time information about the entire ecosystem.

In conclusion, there are two ways to use venture capital

1. If it is treated as a loan to active members, who take the risk to return it back with interest, in exchange of a larger share of revenue, an increase that would result from injecting these funds in the value network under different forms.
2. If the financier becomes a member of Sensorica and turns his financial contribution into an equity share, like any other contribution, understanding that this share is dynamic, that it will diminish in size as other active members continue to contribute with value, according to our value system.

One thing is certain, a financier cannot buy a “static” share in Sensorica, like one buys shares in a corporation. Equity in Sensorica is fluid, it adjusts in real time according to everyone’s contribution.

Development funds

Should out-of-pocket expenses be reimbursed first? We are still on this question.

[Kurt] Expenses should always be reimbursed, but as in public life, only if appropriately authorized - again this is an exception, my vote, if I had one, would be to reimburse - the future state of this would be that you have a governance equation (based on some accounting - possibly the same as the value accounting (meritocracy) or based on showing up, and a time based nurture value (democracy without the citizenship by birth/process bit).

The point of a value network is not to centralize and concentrate wealth.

Funds so centralized should be the exception and deliberately done for an agreed upon common purpose.

The resource allocation problem

[Tibi] I think that having a common pool of funds for development is, in some sense, incompatible with the value network idea. If these funds are used for the pool of shareable, like building infrastructure, that's fine. BUT as soon as you talk about common funds for projects, for designing new products, you generate allocations problems, which leads to politics, and even to centralization. The philosophy behind value networks, as I see it, is to create a Darwinian environment for ideas/projects (NOT for individuals!). There should be no need for group decision (as a democratic voting event or other) on new initiatives, as long as these initiatives don't affect the entire network, like for example a change to Sensorica's infrastructure, or a change to the value equation. In other words, any member has total freedom to propose new projects (with or without a clear path to the market) to take initiative to start it, to gather support/resources around it, etc. A project gains momentum by having more and more members contributing to it. Risk is shared among participants. Resources are delivered by participants, with some contributions from the pool of shareables (spaces, tools and instruments, ...) and from the commons (knowledge...). BUT if we create a pool of funds to be allocated to projects, sourcing a new initiative becomes a political issue, with the unwanted possibility to favor popular projects over others. If all gains are redistributed to participants as soon as they arrive, the allocation becomes totally decentralized, in the hands of every participant. I think decentralizing allocation of resources is key to value networks! Otherwise we reconstruct hierarchies and top-down planning and decision making.

Value exchange

This section describes how value is exchanged among active members.

Under development...

Sensorica is implementing a "local"/contextual currency to facilitate exchange among members. For Sensorica, this is not just a matter of boycotting the big banks, mainstream currency simply doesn't work for us.

• First, we are trading complexes of value, a mix of tangibles and intangibles, which cannot be projected onto a single dimension and given a monetary equivalent.
• Second, collaboration is based on trust, and value transactions need to be open and to have a history accessible by everyone, in order to allow reputation to be transparent and to allow trust to be established. Closed value exchange systems are an impediment to that, all the information about individuals is monopolized by one entity, the bank.
• Third, we operate at the global level and need a unified value exchange system, otherwise we'll have to convert from one currency to another and to keep track of relative fluctuations, which gets very complicated when keeping tabs for long-term projects in order to calculate revenues based on individual contributions to the project.

Sensorica is only one example of an agent operating within the new economy. The basic idea is that the central bank system doesn't offer a value exchange solution suitable for the new economy. People will adopt alternative currencies because they need them. It's not an ideological move, it's mainly a pragmatic one.

Other ideas are included in the Deals document and the Business model 1.0 document.

Other ideas are scattered around our mailing list.

• Exchange with Dante
• Exchange with Ryan

They need to be integrated in here.

See Cyclos, see Tibi for Fabio Barone - developer for Cyclos.

See Nantes micro-currency - article in French or English 

Value export

This is about exchange of value with the market.

Other questions

Time in contribution accounting, individual members vs organization member

When recording work performed, how should we do it for an organization member (not individual member)? An organization like Tactus for example, has many employees but acts as one member. Tactus can execute one task in less time, because it can put a few employees on it. How should time be treated in the formula used to estimate value in this case? One suggestion is total time/man, i.e. time = SUM(time spent by every individual). Only time spent on something that adds value to Sensorica is counted.

As pointed out in a discussion between Sensorica, Greener Acres, and PieTrust, the relationship between efforts and rewards is not a simple one. Value is subjective and context sensitive. Some effort can be recognized by one community but not by others. Even worse, some effort might be valued differently by the same community at different times. Time, which is a component of effort, is to be valued in context.

Time is not everything. Within the equation efforts → value → reward along with time we also have skills, means, experience, etc.

Value for the community or for self?

An organization member must distinguish activities that benefit ONLY itself from activities that benefit (also) the community. For an individual member this becomes more obvious. Sometimes the same activity benefit both, self and the community. That’s all fine, our criteria for accounting value is whether something increases the value of Sensorica. If it also benefits the member as an individual, in any measure, that’s fine; this is actually the advantage of working in collaboration; time is multiplied, it serves multiple purposes.

In some sense we can say that all contribution to Sensorica is in turn a contribution to self, because by increasing the value of the community one increases his own well being.

The rule of thumb should be that we account for everything that increases the value of the community, independently of what it does elsewhere.  

The super value network

From Tiberius Brastaviceanu :

Other Sensorica-like networks can spontaneously form elsewhere, using our templates. The idea is to create a fluid super-value network composed of sub-networks like Sensorica, able to exchange value between them without obstacles. In my view, this is how the new economy will spread, like crystals in supercooled water, or in a supersaturated solution, a polymerization process (I think the world is at a "supersaturated state". A new economical structure is already precipitating.)

There should be no clear distinction between a network like Sensorica and a super-network made of different Sensorica-like entities. The thing is a fractal. This is how I see the new economy, the basis of it being an individual. We are conceiving our contribution accounting and exchange systems with the idea of a fractal network in mind. We want Sensorica to be able to merge with other value networks so well, that seen from the sky you cannot tell where Sensorica is within the larger structure. In fact, Sensorica persists as a nexus of know how, of interests, defined by a project, a product, a service, a goal... It is a node within the larger network. Members can participate simultaneously in different activities across the larger network. Value, information, materials should be able to flow freely. I think the decision making and governance mechanisms need to be designed with the same idea in mind. The circulatory system for matter, energy, and information constitutes a living organism. I think of the new global economy as one living system.    

One question arises. If someone is active in different sub-networks of a super-network, where is the contribution of this person counted? Suppose that this member performs an activity that benefits more than one sub-network. Should this contribution be counted separately in all these sub-networks in which this member is active? How should we integrate the value system of different sub-networks?

I don’t really have a problem with multiplying someone’s contribution across the super-network. Even in the old world someone can have 2 jobs, or be selling the same service more than once.

Risk and the value equation

[Kurt] I would suggest an equation is chosen for the risk function of time where perhaps the risk premium of time decreases to nothing for a mature product - I have suggested a parameterized equation for risk below designed to allow you to set the multiple at t=0 and decay to 1x at the time of the reward event - note that this equation's limit is zero, because I wanted to truncate at 1, you may wish to design other curves.

Note that you are agreeing to the shape of the curve up front and then just tracking time until something good happens.  You will only know the actual risk value of time when it is calculated backward from a liquidity event to the beginning of time.  You will want to be careful about project boundaries as well and of course should account for other dimensions than risk(t) (like competence(t,context) and others, some of which will be easy to measure (like time) and others not so much (like ideas).

The best I could do in limited time is this:

R(t) = j^ (k((tmax - t)/(tmax^2))

where j and k are user set constants, and tmax is the time from inception to the reward event.

which evaluates to j at t=0 if k=tmax and evaluates to 1 at tmax regardless of k or j

j is your lift factor at inception for early adopters, k can be adjusted for different curves.

I would suggest you assume math will scare at least some of your contributors so hide it from them, give them a box and a dot to move around and show them the resulting curve with key values at t=0 and t=tmax

When it comes to adding all the time up once the reward date is determined, you will need to choose a quantized time frame (daily, monthly) the calculation date (end of day, end of month) and sum up everyones’ risk adjusted time over the whole period, then you can determine % splits (if this is the only dimension).

Anyhow you get the idea.  

[Bayle] i'm not sure about measuring risk a deterministic function whose only input is time (indeed, i'm not sure that time should be in a value

equation at all, except possibly as hours worked). I don't have much

experience with non-open commercial projects, but open projects

progress sporadically, as non-full-time core contributors have more or

less time to devote to the project, and new contributors come and go.

Assume projects A and B are equivalent in terms of content. Compare:

(a) Alice contributes to project A for one year and then stops, and

then project X goes to sleep for a year, and then it wakes up and Bob

joins and contributes a lot for a year and then project A gets revenue

(b) Alice contributes to project B for one year and then stops, and

then Bob joins and contributes a lot for a year and then project B

gets revenue

In reality, each of Alice and Bob had the same contribution and the

same amount of risk across both of these scenarios. However, if risk

is merely a function of time elapsed between contribution and revenue,

then Alice's contribution is assumed to have greater risk in scenario

A because it took an extra year until revenue.

(later, not in mailing list): financial markets appear to provide an ideal way to quantify how risk changes over time. For a for-profit company that periodically raised financing and that also had a value equation, i would suggest using the company’s valuation as imputed by the financing as an input to the value equation.

Risk is tricky to do purely subjectively via a reputation system; founders and early investors in companies get what appears to our social instincts to be ridiculously large payouts later. Yet at the same time, being a founder or an early investor is most often a money-losing proposition, and it’s easy to find competent people who lost their shirt (or their house) from involvement in early-stage companies, so from the other side of the table the bargain struck seems to be fair or even poor. Later onlookers have a tendency to assume, in retrospect, that the success of the project was less risky than it actually seemed at the time. Hence, I would not recommend leaving it up to community to determine how much to compensate founders for their risk, unless the founders themselves had a privileged role in that discussion (the concept of the seed group in PieTrust is just such a role; under ordinary circumstances, a member of the seed group does not determine their own compensation unilaterally; however, as a group the seed group has the final say over the system of delegation that determines how much input each community member has into this system).

[Kurt] An excellent thought experiment, Bayle, and a potentially problematic case.  I would be ok with the (imperfect) conclusion that bob took more risk in scenario 1 than in 2.   In a financial market if you get paid in 3 years you are taking more risk than if you get paid in 2.  If you aren't ok with that you would set risk to be a constant by making k=0 (the reason for k, btw).  This is the fundamental design principal of value equations, that they should be able to represent different opinions.  This is not to say my Risk(t) equation is correct or complete, it was merely an example.

I would agree that time is not the only dimension of Risk.  As to time not being a factor in value equations, I disagree, but it is a bold statement.  I like bold statements. :-)

Your example brings to mind another time dependent dimension of value - Commitment (or Nurture in the topos dialect).  In plain language, some people have a bias toward 'sticking it out' to the end and driving to the deliverable (they would say Bob, I don't care that you showed up and did some work early in this project, quite frankly you didn't stick it out, you abandoned the project and screw you (this is not fictitious, I've worked with people who feel strongly this way).  Some projects (like keeping plants alive) require that you show up once in a while, regularly, and add water.  It matters little if you come more often than that.  You can come every day and sit and watch the plant but I really won't pay for that.  In this fashion time worked is not always 'valuable' in a context.

There is also another dimension, that of Competence or in another way, efficiency and effectiveness (all are contextual).  If we have a standardized piece of work that produces a known value (lucky thing that) that we have statistics on how long it should take on average, a super skilled person might do this in 1/2 the average time and a newbie might take 5 times as long.  In this case extra time worked is actually NOT valuable.  (Note also in this case I would tend to make the risk dimension flat as there is little risk in producing a thing of known value).  The thing is worth the average time taken to do it, and the super skilled make 10x as much doing these tasks as the unskilled.  Unfortunately this is an edge case.

Finally we come to the meritocratic argument, that you should only be paid for your time if you produce something of 'value'.  This is in some ways the core of individualist capitalism, and survival of the fittest.  Except that even survival of the fittest has a downside systemically.  Consider this:

A boot stamps in a spot light in an otherwise darkened room.  Robot cockroaches are introduced, with 50% programmed to run from dark to light and 50% from light to dark. Run the system for a while, and you will get an optimized population of most/all light to dark cockroaches.  Now move the boot into the dark, and you will in time produce extinction.  To have this system be both optimized and robust you need to introduce mutations where some cockroaches change their mind some of the time.

In real life it is much worse than this, as we must design the cockroach not knowing what perils it faces.  All this to say that systemically we do not know what activities will produce valuable results, but we still wish to pursue successes.  It makes sense in this context to reward effort, and to reward more results.  For leverage (optimization efficiency), past performance can provide a lift factor to effort (Competence, Reputation).

For this reason I suggest that an "only marketable deliverables rewarded" value equation, while it should be an option (make all other dims zero using the constants), will not be the most successful algorithm in the long run.  In such a system corporations would flourish for a period while conditions were supportive, then die doing what they do extremely well in a context that no longer requires it.  Sort of like most do now.

Link between governance and the value system

[Kurt] We need to separate value equations from governance equations - in many cases (for ideological or other incentive-behavior design reasons) they should not be the same thing.

A system of governance that is coupled to the value accounting system in some way is essential. This is the moral imperative. If there is no linkage from governance to value you have an immoral system - this means someone who has contributed nothing is given the right to make decisions (note: making good decisions in the past is in fact value contributed). While one could argue that those with money have created sufficient excess value to have the right to drop cash on an enterprise, do nothing, and earn equity - this right fades when one examines how that excess value has been earned in the past. They played a different game and won. This game was about control, not value production. As such we need to be careful taking those tokens into our current game as 'value'.

The founder/initiator problem

Should founders (of value networks) or initiators of new project (in value networks) be rewarded more than others that join the process later?

Definitions

What do we call a founder or initiator.

Is someone that proposes a brilliant idea but does nothing else to develop it a founder/initiator? Suppose that an idea proposed by someone catches within the value network and is developed into a big success (however you want to measure that). If this someone just proposed the idea but did nothing else after that, should we call him a founder? How should this contribution be counted?

Propositions

Should we reward only ideas?

1) Ideas alone are NOT rewarded

vote here by adding name and “+”, “-” or “0”    +Tibi^[11]       

2) Ideas alone must be rewarded

vote here by adding name and +, 0, or -    -Tibi +Bayle  

3) The reward of ideas is dependent on execution, with the total contribution of the idea vs the execution being determined by evaluation at the time when reward hits the system

            vote here by adding name and “+”,”-”, or “0”         +Kurt

See other comments on this topic.

Tentative definitions

[relative to projects] A founder or initiator is a member of a value network who initiated a process to realize the potential of an idea, bringing the project to a critical mass.  

vote here by adding name and +, 0, or -    +Tibi  

propose other definitions...

See also Bayle’s comment on risk and founders 

Discussions

[Francois] ...my opinion about being first or not first to contribute to a project. I am convinced that risk must be rewarded, because it's way more difficult to start something from scratch than coming as the 50th contributor when tasks are clearly defined, when group reputation is already high so that you have the chance to work with the perfectly skilled people, when initial budget is already there, when infrastructure is welcoming any of your new ideas, projects, and allows you to find right away the right supplier, the right contact, etc...

I am not telling this because I may think I am more a pioneer than you are. The group is small and we are all at the very beginning of something we want to grow, and there is still no such maternal infrastructure. We are on the same boat.

But risk and pioneering must be rewarded and must appear somewhere. Maybe in the "role" card or the "reputation" one, but somewhere.

[Tibi] Founders are naturally rewarded more because they have accumulated value if they have worked for the project before anybody else. I am against rewarding just ideas... They also have a reputation, an established role, and therefore some degree of influence within the community. I don’t see why founders/initiators should be rewarded more, on top of that. If we decide to reward initiation of something within value networks we should make it decaying in time, so that the advantage of being first will not carry on forever.

[Bayle] I think ideas should be rewarded, proportional to the perceived value of the idea. If my idea was to ship pet food over the internet, well, lots of people had dreamed of and implemented various sorts of e-commerce before that and my idea was a trivial specialization of that, so in that case the idea itself would be worth very little. But if my idea was calculus, well, that was pretty fundamental and (despite its being thought of by two people around the same time), relatively novel, and so an idea like that should be rewarded a lot. I think the reason that people say ‘ideas are worthless, only implementation matters’ is that ideas that approach the value of calculus are so rare in the business world (and the phenomenon of a person demanding, and getting, a large stake in exchange for an idea of the relatively worthless sort is so common) that people really only talk about the relatively worthless sort of idea.

The flaw in the status quo is that ideas are treated either as worthless (employees’ ideas), or as an absolute monopoly that gives the possessor of the idea the right to veto any implementation of the idea unless their terms are met (patents and founders’ ideas). A reputation system can tread a middle ground; ideas are worth a lot if other people say they are --- the thinker cannot set the exchange price of their own idea, but neither can a business use the idea without paying the thinker what the community deems appropriate.

I think that the reward for all contributions should decay in time, ideas included, although as noted elsewhere i don’t think decay that explicitly depends only on raw time is the way to go. For subjective things like ideas, where the value of the idea can sometimes be better assessed as time goes on, i suggest not formalizing the decay at all and letting the community take care of it by changing their subjective evaluations as time goes on, each individual changing the evaluations they give however they wishes.

[Steve] Ideas among value network members are like lottery pools.  Everyone puts in their money; someone buys the tickets; if a winning ticket is among them, the award is split evenly among them:  Jury rules Elizabeth man cheated his 5 co-workers out of a $38.5M jackpot from a lottery pool 

[Tibi] Steve has a point. How do you know if an idea is worth something until it is put to the test, i.e. until we implement it into a product and put it on the market, which requires effort, resources and risk taking?

[Tibi] (copied from elsewhere by Bayle)

> *So in my mind, we should reward processes that lead to realization MORE

> THAN just ideas. Otherwise we recreate some sort of intellectual property

> system within a value network, because in order to reward ideas you MUST

> associate them to a particular individual, and make sure that these idea

> are original, that they don't just come from a website/blog/mailing list.

> *

[Bayle]

(1) There does not need to be a discrete association of ideas with their originators; the credit for a single idea can be distributed among multiple individuals in a continuous manner by asking the community to assess how the credit should be distributed.

(2) Yes, i agree that an idea can’t be evaluated on its own. This is a big reason why i am in favor of (long)-after-the-fact evaluations (or rather, evaluations that can keep on changing long after the fact), rather than a value equation that can be evaluated before the contributor makes their contribution.

(3) I’m not saying that a large fraction of the total pie should go to ideas; maybe it should be a small fraction. But it should not be negligable -- people who work full-time on ideas (including theories and methods) should be able to support themselves this way.

[Tibi] copied from elsewhere:

   1. What do you make of open innovation?

   2. Are value networks going to protect ideas generated by active members

   from being copied by others who don't evolve within the same value network?

   3. How are you going to put a value on an idea before it get's to

   market?

[Bayle]

1. Not sure what this question is asking. I think innovation should be open, but there should be a social (if not legal) obligation to reward innovators. If there are legal monopolies on ideas, then there should be compulsory licensing, e.g. anyone should be allowed to use any idea if they pay a community-determined price to the originators. However i think a possibly more optimal system would be for everyone to use everyone else’s ideas freely but to try to keep track of the provenance of ideas that were particularly useful to them, and then to pass some percent of the value generated back to those idea sources. If the idea source got part of the idea from someone else, they should then take a cut and pass the rest back to them.

2. My preference would be for value networks to recognize other sufficiently open value networks and similar entities (e.g. entities that recognize a social obligation to reward those who produce ideas that they copy, if they turn out to be very important and profitable) and allow ideas to be copied by them -- but to use the full force of the law to protect ideas from entities who pursue a pure profit motive (e.g. who would never pay anything to anyone for an idea unless that idea was legally protected).

3. I don’t think you need to. Idea valuation can be retroactive.

See also Tibi’s other comment.

[Bayle] Regarding the proposition that ideas are abundant:

as the numbers of humanity increase, one can expect more and more

people to contribute to idea generation in general -- leading to a

model in which the abundance of ideas goes up and the price goes down.

but the cost of producing all ideas is not equal. people must invest

capital in order to be able think of certain ideas.

as knowledge specializes, one can expect

there to be many very valuable ideas which require specialized

thinkers to think them up. if fractalization of specialization

grows faster than the population, the ratio of discovered specialized

ideas to undiscovered specialized ideas goes down over time.

depending on the balance between parameters, we may find ourselves in an

environment where there is an abundance of "easy" unspecialized ideas

that many people think of simultaneously, but also where the ROI of

specialization increases over time.

Therefore the amount that someone should be paid for use of their

invested educational capital might increase over time, not decrease.

Now one could try to guess that "educational capital" = university

degrees and then the problem of measuring, and hence of rewarding it, is simple. But really any sort of life experience or time spent thinking about something could

turn out to be the kind of "specialization" that has value. E.g. some

of the authors of this document have accumulated what i

think is very valuable knowledge in the specialized area of value

network design just by thinking about it and working on it. So here,

as elsewhere, i like the model where the output (the idea) is

evaluated and rewarded directly, rather than trying to guess

beforehand how much educational capital is attached to each

contributor based on credentials.

Attempt to synthesize and build knowledge (please contribute!)

Take into consideration all comments above.

It seems that the founder/initiator problem is associated with concepts like rewarding risk taking, rewarding initial effort (which is perceived as being greater), and rewarding ideas.  

Seniority or long-term commitment

Related to The founder/initiator problem.

[Tibi] I think seniority should be a factor that rewards loyalty rather than estimating value. Seniority should naturally translate into capacity to produce value more effectively, because more seniority means more experience.  

NOTE: Tibi changed “seniority” to “earliness” on 1th Jan 2014.

On paid contributions

[Tibi] I've been struggling with this question for a few weeks now. We need to work in a sustainable manner, i.e. not to starve while building Sensorica and designing new products. Some members will need to be rewarded during development. Financial rewards can be extracted from development grants and from crowdfunding. If a member wants to be financially rewarded for work done should this member log the activity for which he/she is financially rewarded?     

I think the answer is not of the Yes/No type.

If Yes then what about those who contribute without any financial reward.

If No, we can lose those who don't have the luxury to wait until sales are made.

I think we need to create a category of paid contributions. I also think that we need to reward those who decide to do work within Sensorica rather than go work for a corporation. Therefore, the member who asks a paid contribution should be able to log something, which translates into a share of future revenue generated by sales of products and services, but only enough in order NOT to upset those who decide to take a greater risk and cash in later.  

In sum, we need to reward the choice to deposit value in our value network rather than in other places, even though a pay is asked.

Salary [see email from Remi]

Other dimensions of Value

[Ian] Is it possible for CREATIVE SPARK and repetitive MANUAL SLOG to be measured in the same way?

Can the value of the 'big picture' GENERALIST who visualises the whole concept carry the same weight as the SPECIALIST who meticulously turns out the same component day in and day out?

How then does one measure the value of the ORIGINAL IDEA ?  The original concept may be the only thing THAT particular contributor brings to the party during the lifespan of the project ... but it is PIVOTAL and might have taken YEARS of thought  and hard work to formulate …

[Tibi] On rewarding original ideas: I tend to believe that in the internet age "original" ideas are becoming cheap. Ideas can be mined from different networks and discussion boards. We need to change the way we do things. We need to acknowledge the ABUNDANCE of information and of ideas. Before we sit down to design something we need to search ideas. Every project should have a list of web-based communities that can constitute sources of inspiration, solutions... After the idea mining operation we can rely on our own network to reduce dimensions and move the ideation process forward with our own input, based on our specialized know how. We need to formalize an ideation and design process for Sensorica that takes into consideration the new reality that ideas are cheap. BUT yes, excellent ideas are still rare, but should we have something in place to reward them? Perhaps... Again, I think we are moving toward a know how economy rather than a knowledge economy. So In my mind we should reward processes that lead to realization MORE THAN just ideas. Otherwise we recreate some sort of intellectual property system within a value network, because in order to reward ideas you MUST associate them to a particular individual.    

See also Bayle’s and Steve’s comments above, in the section Discussions, about rewarding ideas.

Reputation and the value equation

Francois

l'algorithme de VAS prend-il en compte la réputation dans la redistribution ou bien il bâtit la réputation seulement ?

Si l'algorithme de redistribution de la valeur prends en compte la réputation, n'y a-t-il pas un danger qu'il favorise un "ancien" avec réputation forte au détriment d'un petit nouveau sans réputation ? Si le nouveau a plus de talent que l'ancien, ça amène une distorsion de la redistribution, qui n'est plus basée uniquement sur la qualité du produit créé (et sa valeur intrinsèque que lui donne le marché).

Boundary problem

[Kurt] The problem with only considering time contribution (or even risk weighted time contribution) is that you do not include dimensions that would compensate the earlier contributors.  Thus the examples we are considering are useful in designing the time (and solely time dependent) dimensions but cannot be used to draw general conclusions about the effectiveness of value equations in general.  

When the earlier contributors have delivered something (to simplify it, let's go with 'stuff') that stuff can include the marketable item (that is worth 10K) but likely also include ways and means, (infrastructure), knowledge assets, usable capital of various types, and brand equity.  If we take these other aspects into account, when we reset the timer we put a box around the original and decide what has transferred from the first project to the next (time of course, doesn't).  The inputs for the second project are valued and rewarded and so prior contributions are not forgotten.  IF the second project is clearly unrelated to the first, beyond brand equity there would be little transferred into the second project.

Unfortunately at this moment, we are not ready for a full treatment of the value equation, but this example shows the need to look at all dimensions, and to be very careful about 'boundary' problems.

One could also introduce multiple parallel time dimensions and allocate to them (the long view and the short view interacting) but this is a rather more esoteric approach than simply creating an artificial boundary and determining what is being passed from one time box to the next.

Note also, ultimately there is no payment event, only consumption and production, once every participant is inside the boundaries of the value system (multiple value networks operating on a common OS encompassing all needs of participants, evidenced by not needing to go outside the network for anything).  So this is a transitional issue.  As an example consider the dj remixing music.  If the dj remixes music and creates a song everybody loves from one only some did, they have 'added value'.  If the dj remixes music and creates garbage nobody wants, they are really a consumer and should 'pay' for use of the music as a hobbyist entertaining themselves alone, consuming systemic value without adding any.

Ideas as contributions

Discussion

Open discussion from mailing list. See a previous discussion on the same subject.  

Ian July 17, 2012

...I believe the value of so-called 'conceptual contributions' is underestimated and somehow need to be recognised and rewarded.  

Let us surmise that a group member currently classified as an 'observer' has a flash of inspiration and posts an idea that opens up a new and potentially high-value opportunity for Sensorica. Even if the concept outline that is presented is that person's only contribution, is s/he in reality an 'observer'? At what point, if ever, will that contribution be acknowledged? It could languish for months or years (or be forgotten completely) unless the 'observer' in question keeps reminding the rest of us ...

In fact, I would go as far as to suggest that Disruptive Innovation will keep us at the cutting edge ... but it is our Big Ideas (which many of the 'conceptual contribution' are) that will ultimately elevate us into a global stage. The question is whether we are capable of harnessing them, or are we constrained by our internal limitations?

I think the time has come for us Sensoricans to begin thinking on a different scale, which in turn necessitates us revisiting our organisational architecture and identifying and filling critical gaps in our structures.

Tibi 17 July 2012

Yes, some conceptual contributions can be very important, and if they are disruptive they can only be recognized at a later time.  

Let's look to the past... How have we dealt with it before? There is no formal mechanism to capture this type of contributions. Moreover, when people see Apple they see Steve Jobs, but I assume that all these disruptive ideas didn't only come from him.  

Do we need to solve this problem now? Maybe... We'll do what we can, with the bandwidth we have. Putting the problem out there is already a good start. Someone on this planet might have some ideas to start the ball rolling.

 My first shot at is comes from a deep conviction I have, which is that we are moving into a know how economy, not a knowledge economy. I understand that there must be some mechanism to reward disruptive ideas, to reward imagination, the time spending on thinking about something, passion about ideas... On the other side, I am not very comfortable to attribute ownership to ideas, because no one thinks in vacuum, we all use other people's ideas. How do I resolve this paradox? I think people with good ideas get noticed, gain reputation, increase their social capital. Is this enough? Should we find ways to "measure" the impact of an idea and reward the author appropriately? I personally think this is a VERY complicated problem...

Another note: I always think how far we need to go with the value system/equation. There are different type of value and they flow in different ways... We might try to find a metric for one aspect of it without taking into consideration other effects, other manifestations, other aspects. For example, Kurt told me one day that he is happy with the status he has within the network, he contributes with ideas/concepts, he helps us solve problems, he refers other people to us, but he also extracts value from being part of this network, which is finds stimulating. I appreciate Kurt a lot and I also talk about him with other friends and collaborators outside this network. Should we put all that into equation? I don't think so... So where should we stop? What is that we want to capture, with how much granularity? I am also afraid that capturing too much might even be dehumanizing and thus counterproductive.  

Starting to capture ideas as contributions is like creating an IP system within value networks... do we really want that?

Kurt 18 July, 2012

Ideas can and should be registered and attributed - attribution feeds reputation, as does the performance of the idea.  Where ideas end up as written deliverables then ownership can in fact be calculated by comparing written discussions to the written deliverable (ie patents analyzed against contributions to a professional virtual community, see gualtiero fantoni etc al)

As to understanding the impact of an idea, I suspect bayle and Co's approach of human evaluation (using the written record) is likely the most viable approach - a rule of thumb is that the seed idea of a great start up is worth 5% of the result.

Other important documents

Value Exchange Mechanism 

Back Office Catalog (original document)

Back Office Catalog (spreadsheet)

Business model 2.0

Sensorica metrics

Rules related to the use and sharing of materials 

More stuff

From Michel Bauwens (from an email to Jurgen)

http://p2pfoundation.net/Category:P2P_Accounting various p2p metrics,

also on Diigo http://www.diigo.com/user/mbauwens/P2P-Metrics

tags P2P-Economics and/or Ethical-Economy

Adam Arvidsson's new book on the Ethical Economy delves deeply into value and measure and Richard Florida research- added value of 'creative' cities and regions

David de Ugarte is connected to the Basque economist M. Urrutia

The Fair Use economy report in the US, who calculated open content generated 1/6 of U.S. Gdp .. their methods may be of interest

'regional economists', http://www.diigo.com/search/my?q=Regional

Annex

Different types of value networks

The text below has been moved on the wiki, HERE.

For example, a group of translators may decide to form a value network to offer translation services. Working in a larger group allows them to take on larger projects. In this example, the value produced is translation. We can suppose that the group only works with text. All members will perform very similar tasks, reading, translating and writing. We assume that some members will perform business-like activities such as outreach/marketing, meeting with clients, price negotiation, network facilitation and animation, etc. but we can neglect these activities for the moment. It is not difficult to imagine a simple mechanism for assigning a value to someone’s contribution. Contributions are in fact very easily quantifiable: proportional to the number of words translated. We can also imagine modulators for legal, technical, … translations. But this is almost it. In fact, this is the model used by translators to estimate price. Once we have a clearer idea about the value system, we need to think of a set of incentives that would encourage the proper behaviour, in order to keep the value network productive. In this example, the value produced by the network is translation of text. The value that the network offers to members (which is motivating individuals to be members) is some form of remuneration, used by members to acquire basic necessities. By linking some behavioural characteristics to the value equation to affect the value to the member (which is what motivates the member to be part of the network in the first place), we influence behaviour. In this case, the revenue of members should be calculated from the how much of a contribution (how much text was translated), modulated by different parameters extracted from the how the contribution was made (quality of the translation, respect of deadlines imposed by the customer, overall customer service, etc.).

Let’s imagine a different type of value network, in order to better understand how incentives should be linked to the value system. Suppose a group of individuals forms a value network to share a space for housing. This example is very different from the previous one, in that the value it offers to members is not revenue, but a place to sleep. A set of incentives needs to be designed in order to induce proper behaviour in this example as well. Proper behaviour in this context would be to take care of the space, to participate in cleaning and maintenance, to participate in governance (participate in meetings where group decisions are made about the space), to respect of other members, to respect of agreed upon schedule, etc. Incentives need to be linked directly to the value provided to the member, which in this case is a place to sleep. Examples of negative incentives would be: a reduction in the number of days per week the person can use some common areas or appliances, a lower quality sleeping room, more work assigned for maintaining the property, etc. If incentives aren’t directly related to the value the network provides to members it becomes more difficult to maintain the network well-structured and productive.