Mar 06
I spoke at the Refresh Phoenix meeting last night for an audience of about 25-30 people. We talked about the traditional paradigm of work in the corporate enviornment, the flaws associated with it and what Grid7 proposes to solve these. I posted my scratchpad outline for the talk here so you can skim the content. I taped it using the iPod and made the audio available below. The questions are a bit difficult to hear since we didn’t use microphones but all in all it seemed to be received well and generated a lot of discussion afterwards. Thanks to everyone who attended and asked questions. You can listen to the audio here.
© 2005 Lights Out Production – All Rights Reserved Worldwide
I thought you gave an excellent presentation tonight at the Refresh meeting. A very interesting idea for Grid 7, and it definitely makes sense to me.
Great job tonight Sean. Very interesting to see peoples reactions and interpretation of the concept. In my opinion, addressing the legal and financial issues that were raised tonight will be critical to gaining applicants once your pilot is complete. Looking forward to seeing the growth of grid7 all the way to the cover of wired! :)
db
Hi Sean, Thought your presentation last night was great. Good job and good idea.
Luke, Dave & Chris,
thanks for coming and thanks for the words of encouragement. We’re excited (if it wasn’t obvious from the talk ;-) and we’re definitely planning to bubble up the lessons we learn from the pilot back into the community. We’re definitely aware of IP and tax issues that need to be addressed but at this point we consider them logistics to be worked through and nothing that can’t be handled. I just posted the audio and notes for anyone who wasn’t able to attend that would like to listen.
-sean
Although I missed the show, I certainly enjoy the audio recording. Nice work. I am checking your site few time a week.
Keep up the good works!
Thanks Sean for posting the podcast – I couldn’t make it tuesday but am interested in your thoughts… thanks again! – rYnoweb.com
Hey Sean,
I really like the idea of Grid7. There are so many ideas out there that aren’t being developed and you’ve come up with a brilliant method of getting those ideas produced.
I know we talked a little bit about the socialistic/capitalistic viewpoints of how it all works but my thoughts were all kind of jumbled at the time so I’m not sure how concise I was in the manner that I presented my ideas. As such, I thought I’d hop on here and attempt to write them out. That way you can review and/or ignore/correct my thoughts at your leisure. :)
Basically, here’s a summary of what I was thinking.
Current incentive/compensation model (to my incomplete understanding):
– Compensation model is based on "revenue blocks".
– Revenue blocks entitle you to a percentage of the income that is pulled in through the entire grid of projects.
– 60% of the revenue blocks for a project belong to the project leader.
– 20% of the revenue blocks go to Grid7 for management/hosting costs?
– 20% of the revenue blocks go to developers?
– As the number of projects increases, then the number of revenue blocks increases.
– As the number of revenue blocks increases, your residual income goes down.
So let’s put together a basic example:
1. "X-Project" is a new web app in need of development.
2. This project, when finished, pulls in $1,000 a month in revenue.
3. For simplicity’s sake, let’s say the project is divided into 100 revenue blocks.
4. $600 (60 blocks) of this revenue goes to "John", the project envisionary.
5. $200 (20 blocks) of this revenue goes to "Bill", the developer.
6. $200 (20 blocks) goes to Grid7.
So. We effectively have 100 blocks on the "grid" now, as it were.
Now, let’s put together another project:
1. "Y-Project" is another new web app in need of development.
2. This project is a failure and, when finished, pulls in only $100 a month in revenue.
3. Once again, for simplicity’s sake, let’s say the project is divided into 100 revenue blocks.
4. $60 (60 blocks) of this revenue goes to "Zach", this project’s envisionary.
5. $20 (20 blocks) of this revenue goes to "Bob", this project’s developer.
6. $20 (20 blocks) goes to Grid7.
So here’s where I see the problem. The pricing model suddenly is flawed because the blocks aren’t based per-project, but are for the entire grid.
Here’s what I see ends up happening:
1. Since there are two projects on the grid, we now have 200 total revenue blocks.
2. This means the grid’s total income is now $1,100.
3. Each revenue block is now only worth $5.50.
4. Instead of making $600 a month, suddenly "John" is only making $330 and "Bill" is only making $110.
5. On the flip side, "Zach" is raking in $330 a month even though his project idea sucked and failed.
Am I totally confused here or is this actually how this model works? Quite frankly, this model scares me…
On the other hand, if the revenue blocks were only based per-project, then nobody feels slighted.
They only get paid for the work they invested in and they don’t get paid until that project starts earning real money. If they chose a good project to invest in and they did a really good job, then the project is more likely to succeed, and they reap the benefits.
Final key observation:
The concept of Grid7 entices me because it allows me to cash in on an idea of ownership. What is the biggest advantage of ownership instead of being an employee? Residual income. If you own a business, you want to be able to walk away and have money still flow into your pockets. You want to be able to go to the golf course and take life easy because a great idea you had, is earning money for you. I don’t see how this is possible with the current Grid7 model, because the current Grid7 model effectively turns you into an employee. You have to keep putting work into it to keep earning your share.
P.S. I just posted that message for you on the grid7 forum: http://www.grid7labs.com/index.php?option=com_forum&Itemid=9&page=viewtopic&p=16#16
Tom,
I see the confusion now and you should rightfully be scared of the scenario you propose. I think it stems back to a comment Andy made at the Refresh meeting which was incorrect. I’m responding to your post in the G7 forums and I will clarify how it works. There is still the socialist v. capitalist debate and as I mentioned at lunch today, we’re tinkering with the idea of running two separate grids and giving people the option of which one they want to belong to.
Sean
[…] On the value of enthusiasm over skill – I can’t stress this enough – I would way rather have someone who is stoked about learning and has an idea they’re passionate about vs. having an elitist recluse who may be the best programmer in the world but has a condescending attitude towards the others on the team. What you know at any given time in our industry is not nearly as important as your ability to adapt, how well you can learn to learn and your passion for what it is you do. I said it in my talk for Refresh the other day, “of the six questions involved in any project- the what / where / when / how / why / who, if you can get one and only one right- fix the WHY solidly in your gut and the others will find a way to resolve themselves.” […]
Hi Sean, Thought your presentation last night was great. Good job and good idea.