Edgeryders: thoughts on possible business models

Knowledge Collection Making Projects Happen
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As some already know, in May 2013 [AD_admin], [Matthias], [Nadia], [Noemi] and I formally founded a UK company called Edgeryders LBG. The stated aim of the company is to provide the scaffolding for the Edgeryders community to continue to exist and thrive. We care about this because we have witnessed many very valuable collaborations emerging from the community, and we believe many more are coming.

At a minimum, “providing scaffolding for the community” means hosting, maintaining and further developing this website, every edgeryder’s home on the web, and organizing one Living On The Edge real-life event a year. These things cost time and money; the community can and probably will provide some (time more than money), but even in the best case scenario Edgeryders LBG will be called upon to provide resources. So, here’s the question: how do we generate them? In other terms: what is our business model?

We all agree on the following:

  • Although it is clear that Edgeryders is acting as a sort of incubator – fostering new projects and even hosting them in its corporate shell – we are not going to try and monetize this. We believe this service to be the most important Edgeryders has to offer, but we are still going to give it away for free. We badly want those collaborations to happen, and most of them are too fragile to demand cash of. If we were to do so, they would simply move away, or not happen at all.
  • Instead, we are going to sell expert advice (we call it“open consultancy” to decision makers in the public and private sectors.
  • We are going to generate this expert advice by mobilizing the community, just like we did before with the original Edgeryders exercise in 2012 and Mission: Baltic in 2013. Individual members of the community will be involved with different roles on different projects, according to skill and inclination; some of these roles will be paid, others will be voluntary, some will be full time, others part time.
  • We are going to encourage community members use Edgeryders LBG as a corporate vehicle for their projects, provided that they are coherent with our values. Both the unMonastery and Economy App are initially framed within the Edgeryders corporate shell. As they grow, these projects will probably want to spawn their own corporate entities, but starting within Edgeryders relieves them of some administrative complexity early in the game, when the people leading them need to focus getting the projects off the ground. If you have a project you want to do as Edgeryders and can get the resources to get it off the ground, we’ll hire you as a project manager, give you an email address and a deck of business cards, and help you as best we can (more on this).

How exactly to do that? We prefer to spend our time trying things out rather than making slides for a business plan – we got our first client before even becoming incorporated, and are currently engaged in pitching both Edgeryders to possible clients in three continents. And yet, the discussion on business models is relevant and interesting, and it has started. So far, we have identified three entities that feel somewhat similar to Edgeryders, and from which we might learn.

  • Primary Insight is a consultancy company that delivers investment advice. Its benchmark competitor is Gartner. Instead of trying to hire the best analysts, PI deploys ad-hoc networks of people who are not professional consultants, but rather people who work in the relevant industries and contribute to PI on the side. For example, is a client is thinking about buying machine tools companies in China, PI builds a team consisting of people who work in the machine tools industry, have a deep knowledge of the Chinese manufacturing space, or both. PI insists that, by being embedded in the industries clients need to know about their consultants, their consultants can deliver much better intelligence than any external (and generalist) analyst. PI is “like Edgeryders” because it is connected to people on the ground, whatever the ground, and can mobilize these people to deliver expert advice. Such advice takes the form of projects like Mission: Baltic or the Edgeryders Guide to the Future: a fairly large-scale coordinated effort around a goal agreed with an individual client.
  • Expert Labs is presented (by David Weinberger, in a recent book) as a public sector equivalent to Primary Insight. Its initiator is a friend, and a person I look up to: Beth Noveck, onetime director of the White House’s open government initiative. Apparently, the initial idea was to redeploy the vast expertise contained in an existing organization called the American Association for the Advancement of Science. At the time of writing, Expert Labs seems to have folded, after focusing much of its efforts on building an ICT tool, called ThinkUp, for government agencies to continuously engage citizens on social media to tap into their collective intelligence.
  • Redmonk does not do “client work” other than one-on-one consultant’s billable hour. So, no projects like Mission:Baltic happen as a result of client asking for them. Rather, Redmonk does research as it sees fit, and then publishes its results. Its revenue comes from a subscription model – not unlike a magazine. Like a magazine, it has a lot of freedom. Expert advice takes the form of projects like in the Primary Insight example, except that their goal is determined only by Redmonk, and consumed by all of its clients/subcribers. Redmonk is “like Edgeryders” because they claim to be able to act as go-between clients and a particular category of people: for them it is developers (“they are our people”, as their corporate website puts it). What would be the equivalent of Redmonk’s developers for Edgeryders? Young people? Radicals? Social innovators?

Do you like any of these models? Do you think they would work for Edgeryders? Do you have any other ideas?

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Selling to someone else?

Let’s not forget that our expertise is in general more valued by those on the edge than by policy makers and NGO decision makers. While it would be nice to have both on board, it may be hard to have a constant supply of paying gigs with decision makers. So maybe we can figure out a way how our knowledge products (including this website and LOTEs) can be supported by those on the edge to at least cover running costs. Options may include Wikipedia style yearly funding campaigns, an OSE style True Fans program, crowdfunding campaigns for specific products like our “Edgeryders Guide to Making Your Projects Happen”, or (because we’re all resourceful but quite cash scarce) all of these in variants where the donations are in barter (goods and services, mediated with a network barter software like Economy App).

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That’s right: it’s a pain for governmental institutions and large NGO’s to apply on-the-edge methods. For different reasons they would prefer those which look “safer”&wait for the innovation to become old, tested stuff, before they embrace it.

Though there are instances when they need innovative trendy stuff.

  • Either fashion/showcase when crazy (sometimes useless) projects funded because of the need to represent something for the public/potential buyer of public assets/a boss etc.

  • Or a cutting-edge fix, because they’re hitting the rock bottom and because traditional means of assessment don’t cope with the fact that it takes less and less time to hit the fan.

However, large unadventurous bodies in the search for cutting-edge fixes tend to collaborate with a bit less cutting-edge providers than Edgeryders might seem, as well as avoid micro-outsourcing.

I suppose, when the collaboration with the big ones takes place, Edgeryders LBG is an airbag, and the projects framed into it’s corporate shell are the proof that these on-the-edge practices are safe to replicate.

We can also consider a middle man, who either lives from gov.funding or businesses. But this is another story. The former can see Edgeryders LBG as a bunch of minesweepers, like a multiple storey oursource, for the latter Edgeryders LBG can potentially provide, for example, CSR research. May be, regarding our access to the up-to-date information from the field, another possible partner could be media reporting on policy or business matters.

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On insights/research/consulting and bartering

It is to be veryfied if it is the case now in Europe, but at the dawn of post-soviet capitalism there was a need for a very small scale market research amongst startups, because, as any startup they were lacking cash&time, but still needed insight. Not a 10000 page report, which they can’t afford and don’t have time and skill to read, but a simple glance at what is going on. But at the same time, something less arbitrary than results from a single focus group.

Trouble is with those is that, regardless of the quality of the insight you provide, they are at risk of running out of cash and go pearshaped. May be some form of bartering can work with those, as they might be up for sharing little they have in exchange of the research they need. Of course, small companies are scared of new things, and there should be the reason for them to trust us. May be we can sketch a model of a moneyless insight deal and ask lean startups what they think.

Proposed a session dedicated to moneyless economies regarding the fact that so many are sick of hearing/talking about the lack of cash as the ultimate unbeatable hindrance to everything good and Edgeryders moneyless economy expertise.

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Moneyless insight deals

Great inspirations! You inspired me to think about how this might look like practically. One way how a moneyless insight deal might look like is a Q&A format: a StackExchange type of site like StackOverflow, but integrated with network barter as a payment system so that the Edgeryders citizen experts can earn value by providing answers. It’s always difficult though how to mix accounted value exchange into voluntary communities. So maybe all the value for answers would go to Edgeryders as the Community, not to the individuals? As in “you can support the Edgeryders community with your expertise, for example an answer to this question would be worth 50 EUR in barter, and in exchange we will keep providing and maintain the infrastructure services for Edgeryders: the website, LOTEs, the company shell for projects, and free help to make your own projects happen”. This would feel like the Google Answers service of old, but for barter. A moneyless micro consulting service – from citizens, to citizens and institutions if they like. (Wild thoughts, just sayin’. Sorry for questioning all about the Edgeryders business model again … .)

As for an upskilling session on bartering at LOTE3: direct barter and existing barter platforms, and also LETS type local currencies (often called barter rings) do not really work as mode of exchange. It’s great for further research, but not for upskilling. If we’re ready with a release of Economy App by then, there would be a new solution that hopefully makes barter work as an alternative for money. I’d be open to do a session on that, but as it will be very new then, it’s rather exploration and testing than upskilling … . The greater topic of non-monetary value exchange might be an area for upskilling though – [James] has a lot to say on gift economy for example.

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added a short session proposal

Let’s see what we can make of it in terms of a session: here is a session proposal in short. Tracks: either Upskilling or unConf - depending on whether we want it more practical or theoretical.

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Upskilling with no money!

[K]senia: no, Primary Insight does not do marketing, but investment consulting. Typically not a need for small companies.

As for the session on barter/living and thriving with no cash: it seems like an interesting and useful skill, but remember the mantra, what we don’t build ourselves does not get built. If someone is up for doing a session on life after cash ([elf Pavlik] seems an obvious candidate) we can put in the program. If not… not. :slight_smile:

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Open Value Networks

I’d suggest looking into ( Bob Haugen’s )

https://github.com/valnet/valuenetwork/wiki/Core

such as this implementation :

http://valdev.webfactional.com/

currently tested within Sensorica 

http://www.sensorica.co/

more on Value Networks :

http://en.wikipedia.org/wiki/Value_network

and Open Value Networks

http://valuenetwork.referata.com/wiki/Main_Page

and also REA accounting

http://en.wikipedia.org/wiki/Resources,_events,agents(accounting_model)

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You mean ERs as an open value multidisciplinary network providing/exchanging insight&research or innovative fix (tech or less tech) or all of it if required to solve some particular puzzle?

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question on Barter Upskilling Session

[Alberto] [Matthias] [James] Should we propose a session to upskill track then and see if the barter-wise ER’s are up for it? I’m rather profane when it comes down to this, but there seem to be a lot of ERs with expertise and the subject is exciting. If it doesn’t grow into the barter upskilling session as such it might grow into some interesting else. What do you think? Or should we make sure ppl are up for it first and then propose a session? (soz questions are a bit offtopic: better br in buildingLOTE3)

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Yes, let’s move this

Yes, this discussion would be better placed on the LOTE3 workspace. :slight_smile:

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Spain Network is Here!

Hello Edgeriders!

I am Italian but I live in Spain for 10 years. In Spain things are happening with a huge potential for innovation. Here we discuss a lot about Commons and P2P Culture or Collaborative Culture.

The debates are not only on a theoretical level, but they try to get straight to the everyday fields to promote a real change in economic models.

Many people are involved in networked processes and collaborative works. The distributed organization, also experienced from the political field like Indignados (Occupy) movement, opens us to new work patterns.

Right now we have a huge problem: after the expansion of the community a few years ago, all these debates become too self-referential. Besides the corporate culture of the country still largely suspicious of the services offered by distributed organizations.

Our experience in distributed organization have taken advantage of the public budget for the culture policy, and now these resources have practically disappeared.

A possibly way out is the ability to expand the network and works on an international level. In Spain we have experienced a lot, but now we literally ran out of money or “investors”. We know that what we do has many value and can be offered to public and private sectors of other countries.

​

I say all this simply as an introduction, to show my great interest in what can be Edgeriders and from there start thinking with all of you about possible business models.

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Same same here.

Thanks for insights about the situation in Spain, [urbanohumano]. Personally I am very interested in developments in Spain as I see it as having one of the biggest innovators for reshaping the economy. Because it has lots of people, and these people have lots of radical thoughts (while here in Germany, we also have lots of people, but they’re mostly comfortable, not radical …).

As for the problem of a largely self-referential discussion about solving socioeconomic problems, and the suspicion from existing institutions: I guess that’s quite the same issue here with Edgeryders. Thanks for analyzing from the outside … . Because as [Alberto] says below, selling the “radical” kind of consultancy to decision makers is a hard sell so far, and so without others taking our input we can only talk to ourselves. So yes, it’s self-referential, and even an event like LOTE3 will be only self-referential except we can get participants from “non-edgy” institutions etc. to show up.

So in my view, the seek for an Edgeryders business model seems kind of stuck. In proper lean startup fashion, we should now pivot, that is, look for ways to morph our offer into something so that a valid business model results. Personally I don’t care if the business model results in money or other type of compensation (like in-kind, via barter) that allows us to provide the Edgeryders services to the community. But without finding such compensation soon, it will be increasingly hard to keep it all up. (My experience at least; as the tech admin of edgeryders.eu, I can barely find enough volunteer time to keep up with fixing critical errors, let alone doing meaningful additions.)

I propose to re-think the Edgeryders business model more openly. What else could we offer for compensation, if not policy consulting? My feeling is that it would be something that serves more basic needs. Because the higher something is in the hierarchy of meta levels, the less essential it is for day-to-day life, so selling it is necessarily harder and more dependent on people’s subjective evaluations. And policy consulting is more or less the highest meta level that I can think of. Higher even than government, as it’s about consulting government how to govern … .

Do I have any specific ideas? Well, umh, if you want a raw and wild one: Crowdfunding campaign for a Creative Commons licenced, yet unwritten, comprehensive e-book about no-to-low-cost food supply. A role model could be Jack Monroe, now earning money from her “Cooking on the Breadline” book. But we’d also include no-cost gardening techniques, food waste use technology and so on. Given the current European economy, such information is probably in high demand, so crowdfunding for this would have a higher chance of success than crowdfunding for something unspecific as “the Edgeryders online community”. Of course that book would get written using the edgeryders.eu site as a tool, so part of the money would go into maintaining and extending it accordingly.

(P.S. [Nadia]: This is a continuation of the discussion we started on FB recently. What you think?)

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Re-think => good

Rethinking business models is always a good idea! Maybe someone wants to lead a session at #LOTE3?

[Matthias], your book idea, I think, is a variant of the subscription business model as per my original post. Reason: you think like a publisher, focus on producing editorialized content, and sell it before you have produced it. It is financially sound; and it is a one-off, unless you can turn your book into some kind of ongoing paid subscription service.

My impression is this: we are now in the darkest hour before the dawn. Edgeryders is getting a lot of attention, but people are not really buying (yet?). So we have the workload of a successful business and the revenue stream of a bunch of unemployed people! Unfortunately, this is consistent with everything I know of growth in business (rule one: first you pay the price, then, maybe, you reap the benefits) and with our own strict zero-debt, don’t-need-funding attitude. But I am reasonably optimistic that – if we can hold out long enough – we will reap the benefits of our effort. This, of course, is just my own personal opinion.

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subscription business mode

Hello Alberto y Matthias , I think the subscription could be an interesting part of edgeryders business plan. All of us we could pay an annual subscription. With this subscription I can lean on a paid professional staff to develop projects and at the same time have a community that have paid a fee to be really committed.

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Should be open, no?

Alberto, I like your optimism, but I don’t share it :wink: When a business model hasn’t catched on for half a year, for me it’s outta the window. Gone for good. I don’t doubt that Edgeryders can provide great quality consultancy, nor do I doubt Nadia’s and your ability to sell the offer well. So if it’s still that hard a sale, it must be a problem on the customer side. Do we want to permanently deal with a bunch of customers who are that hard to persuade of a valuable offer?? Because it will result in a highly undependable stream of contracts and thus, income.

As for the analogy to the subscription model: regarding the publisher’s perspective it is indeed related. A business model is however also about who are the customers, not just the mode of selling. So producing advice for decision makers / government / NGOs and producing advice for our own folks (like the book project I proposed) are essentially different business models. And the latter one should be as open as possible to maximize the benefit, since those who can benefit are a diverse group: some can pay for the service, some can’t. That’s why I would shy aways from a subscription fee and closed-access content, since it deters many who could benefit, while open content does not deter anyone … . Of course you’re right that a book project is a one-off idea. But it can be serialized: if it works, the next book will be on hacking housing and urban space, and so on.

But I guess I should demonstrate what I mean. So, who else is up for running a crowdfunding campaign for a first open content product of Edgeryders?

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Sure, go for it!

The whole point of open is not to waste any impulse in doing good things, so sure! Go for it. I’ll help as best as I can (which, with crowdfunding, is not much. I am quite intimidated by the beast!).

That said, this sort of slow-moving consultancy is what paid my bills for the last 13 years, AND it provided me with opportunities to learn new things and develop. Even Edgeryders came out of that! In my experience it is perfectly normal for a cycle of getting into business to take 6-12 months. What is not normal is that we are pushing harder than usual, so our potential grows faster but we take more pain from all of this still-unpaid, frustrating business development work!

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Failing fast

Hmm, so it works for you. Cool. Which also means you’re the one with the experience to tell us when it’s apparent that the consultancy business model will not work for Edgeryders. Because “When you’re failing, fail fast.” Lean startup philosophy, and also personally I have had enough from the other case. I literally wasted thousands of hours for failing too late with business ideas, since I started self-employment in 2008 …

As for the crowdfunding campaign, I will gather some interest & expertise around it before and during LOTE3, and then see what kind of product and campaign we can come up with.

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Redundancy is good for you

No, look: I think we are on track, and if we keep this up we are going to start signing deals soon. Already we got the Baltic Edge deal (15K in cash) that paid for some content and a little platform development earlier in the year) and the unMonastery deal (we get a free venue and about 80K in cold cash). So far, we have chosen to reinvest them immediately in the community, rather than try to keep some. This may have been a reckless choice, but we have been able to generate some revenue.

BUT that does not mean this is the best way to generate revenue. Far from it! I am terrible at monetizing my skills. So, the whole point of our partnership is that we all try to do some stuff. Each of us deploys the skills he or she has. We help each other as best we can. Whatever works is what we do. Redundancy and apparent chaos are features, not bugs. So, by all means do try whatever you believe in, and don’t be shy to ask for help!

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We’ve started to discuss crowdfunding LOTE4 here to make an upskilling session. I’m not crowdfunding-smart, but trying to figure it out: talking to CF wise people and my line of thought keeps changing. There are also crowdfunding-experienced people on the platform.