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The REPDEV Network Operating System

economics

(Michael Hrenka) #1

Note: This was originally published on 2015-06-29


This is the third and final post in the following series:

Presenting the REPDEV Network

Writing this post took me quite a while, because I had to read and evaluate two books to get the necessary understanding to come up with an innovative and promising structure for the REPDEV Network. These two books are Reinventing Organizations by Frederic Laloux, a seminal book about surprisingly successful organizations with effective self-organization of workers, and Swarmwise by the founder of the Swedish Pirate Party Rick Falkvinge, the guide to change the world by creating and leading swarm organizations. Reviewing these books in detail is out of the scope of this post. Suffice to say that both are quite brilliant and important books which together form a large part of the basis of the REPDEV Network Operating System.

Different Scopes of Reinventing Organizations and Swarmwise

It is important to be aware that Reinventing Organizations and Swarmwise have different scopes. While Reinventing Organizations focuses on for-profit and non-profit companies, the methods of Swarmwise are appropriate for activist networks, as exemplified by the Swedish Pirate Party. Trying to apply the methods and structures from one book to the scope of the other is at least slightly inappropriate, because they apply to basically two different situations. What works for an organization run only with full-time or part-time workers won't necessarily work for a network of volunteers who basically work for free and invest very different amounts of their time and energy into the network – and vice versa.

REPDEV as symbiotic reputation swarm network

What is the REPDEV Network then? Is it supposed to become a formal company or a swarm network? It's mainly the latter, but with a twist: It shall become a symbiotic reputation swarm network that works together in collaboration with certain organizations, which can optionally see themselves as part of the network! The term "reputation swarm network" is one that I'm coining in this post (the adjective "symbotic" will be explained in the following paragraph). It refers to a network of self-organized volunteers that uses an internal reputation economy to distribute incoming resources. So, to actually work properly, a reputation swarm network already requires a working internal reputation system. In the case of REPDEV this means that there is a bootstrapping problem: REPDEV will have to create the reputation system that it will use for its own operation. Therefore, REPDEV has to start out as "normal" swarm network until it will have created its internal reputation system, at which point it can transform into a real reputation swarm network.

Company swarm symbiosis

Let's take a step back at first and take a look at how REPDEV should operate in general. The ideal is a symbiotic relationship between the swarm of REPDEV supporters and organizations that collaborate with that swarm network, whether they see themselves as part of REPDEV or not. What counts is the common contribution to the mission of establishing a flourishing reputation economy ecosystem. While volunteers work for the swarm network directly, companies provide reputation economy related services for all kinds of organizations – and of course for REPDEV itself. Both parties can collaborate on common projects, for example the basic software on which the reputation economy should run, which of course must be open source. This will help companies to provide better products and services. In turn, those companies should provide infrastructure, software, services, or a share of their profits for the swarm network. From this arrangement, both sides benefit a lot, so alignment with common goals and practices should be maintained at all times to provide a reliable foundation for the symbiosis.

This means that REPDEV will be more than a “regular” reputation swarm network; it will be a symbiotic reputation swarm network that leverages the collaboration between the reputation swarm network and collaborating organizations. This can be visualized the following way: Imagine a spider web that represents the swarm network. Now visualize snow flakes (each very unique and individual with its own structure) that stick to the spider web which represent the symbiotic companies that collaborate with the swarm network. We can add one last part to the image to make it more complete: The central hub of the spider web that represents a non-profit organization which has vital coordinating and supportive functions for the whole symbiotic reputation swarm network.

A hub non-profit organization for network resource allocation

An effective swarm network should be able to attract and allocate money effectively. There are different strategies for that in the for-profit and non-profit sectors, but a non-profit approach is certainly a good foundation for a swarm network. So, it makes lots of sense for the swarm network to create a dedicated non-profit organization (NPO), or even multiple NPOs within different nations, as hub which can accept donations that are then forwarded to the swarm. What makes this setup interesting in the case of reputation swarm networks is how these donations are forwarded to the swarm network: The members of the swarm use an internal reputation system with which they determine who should get what fraction of incoming donations. If totally decentralized reputation systems can't be used yet, the hub NPO will host the reputation system of the swarm.

By using a reputation system to allocate donations, the need for creating budgets is minimized. Of course, the hub NPO will have to use a part of the incoming donations to finance its own operation, but everything else should be forwarded to the swarm members. If there is a need to bundle monetary resources, then this can happen in two ways: Firstly, organically on the reputation level. People who have a rather high reputation will get a large fraction of the money. Secondly, the members of the swarm networks can decide to use use their own monetary resources for specific projects that need them. For all regular practical purposes, these two mechanisms should suffice. If there’s still not enough money, then fund-raising campaigns need to be initiated.

There may be legal complications involved since distributing donation money with a reputation system to the members of a rather open network is a pretty unprecedented practice. If these complications appear to be intractable, they would need to be circumnavigated by applying a more traditional money distribution system – at least until the legal issues can be finally resolved.

Commonalities of Reinventing Organizations and Swarmwise

It is quite intriguing that not only Reinventing Organizations and Swarmwise present radically innovative structures for different areas, but that there are striking commonalities between them. The focus on Reinventing Organizations is on so called teal/evolutionary organizations (or teal organizations for short), and that of Swarmwise is of course the (activist) swarm. Nevertheless, there are operating principles that both structures have in common:
  1. Dynamic self-organization is applied, but with clearly defined procedures.
  • People are free to do what they think is in the best interest of the organization, and can act in the name of the organization, if they adhere to some simple agreed on rules.
  • Formal or informal leaders provide the vision and act as role-models for the organization.
  • Trust and a positive vision of human nature are crucial.
  • The mission is the most important thing around which humans congregate (not leaders, or power, or money, or structures).
  • Team sizes are important. Teams or groups which become too large become dysfunctional.
  • Don’t be afraid of things going wrong. If they go wrong, take that as chance to learn from your mistakes.
  • Voting is not seen as good decision making mechanism. Instead, people act on their own, intuitively using the self-organization principle of stigmergy, often after talking with others about their plans, or they use consensus mechanisms, or conflict resolution strategies.
  • People don’t command others around. Instead self-appointed leaders say “we’ll do it like this”. People are free to follow or not to follow the suggestions of others.

What may be most amazing about these principles is that they not only work in practice – they actually work surprisingly well! In fact, teal organizations make significantly more profits by applying these principles than if they relied on more traditional approaches. Also, Pirate parties all over the world have been astonishingly successful within a very short frame of time. These underlying principles, let’s call them “teal principles” from now on, enable organizations to operate on a significantly higher level of performance.

Teal principles for REPDEV

As highly innovative network, REPDEV should embrace teal principles as much as possible. This doesn't mean that all collaborating organizations are required to use teal principles, but wherever new organizations are created for REPDEV, they should already start out as teal organizations. Work is ideally done in small teams, which may even bridge the gaps between different organizations within REPDEV.

At this early stage I don’t want to define the explicit implementation of the teal principles in the REPDEV network, because it’s both too early for that, and they need to develop in an evolutionary fashion to adopt to the specific requirements. In practice, all teams and organizations involved in REPDEV will be free to organize themselves as they please, but they should ideally subscribe to certain sets of guidelines which are to be defined and fleshed out in the future. These guidelines will be inspired by the books Reinventing Organizations and Swarmwise, so these books are suggested reading material for REPDEV members.

The REPDEV components layers

How is the REPDEV network structured exactly now? Well, it consists of three different layers:
  1. The swarm of individual REPDEV supporters (the most basic layer, since without people there is no organization)
  • The hub NPOs which provide some basic infrastructure, collect donations, and allocate them to the swarm network
  • Collaborating organizations which provide services, software, infrastructure, and may optionally contribute to REPDEV with a share of their profits (if they make any)

REPDEV supporters can of course belong to multiple of these components. Some overlap is certainly expected. It is certainly possible to get paid for your contributions in any of these components, at least once they are all fully established.

1. The REPDEV swarm

This is the most crucial part of the network, because it consists of actual people who decide to support REPDEV. I explicitly choose the word "supporters" here, because I don't want to overemphasize the idea of "membership". Whether a REPDEV supporter sees herself as REPDEV member or not is not the most crucial aspect. What really matters is that the core mission of REPDEV is actually supported through actions, which can of course include work, donations, or merely talking about REPDEV. Therefore, the boundaries of the REPDEV swarm is not clearly defined. Everyone who supports REPDEV could be seen as part of the swarm.

2. The REPDEV hub NPO(s)

As global network, REPDEV needs a NPO with branches in different nations, or multiple different NPOs, to accept donations that are exempt from taxes. It will certainly take some time to set up these NPOs, but once they are in place, REPDEV will be in an ideal position to establish a flourishing reputation economy ecosystem as effectively as possible. The temptation to confuse REPDEV with these NPOs will be great however. They are an essential component of REPDEV, but all three layers of REPDEV are important and constitute the REPDEV network collectively.

By using reputation systems for the swarm network members (membership could formally be defined by being subscribed to such a reputation system), the hub NPOs turn the REPDEV swarm network into an innovative reputation swarm network. And, of course, the hub NPOs will be teal organizations.

3. The organizations collaborating with REPDEV

Some REPDEV supporters might want to create their own organizations within the REPDEV network. They can be NPOs, or for-profit organizations, or something in between, or even for-reputation organizations (as presented in the second part of this series), once a functional reputation economy is already established. These should ideally be teal organizations. Additionally, already existing organizations, whether they are teal or not, can decide to collaborate with REPDEV in any way. The task of all of those organizations is to provide services, software, infrastructure, and products for the emerging reputation economy. Because of their important role, they represent a layer that actually belongs to the REPDEV network.

The reputation incentive system for early supporters

It is important to note that early REPDEV supporters can hope to be highly rewarded in the case of eventual success of establishing a flourishing reputation economy ecosystem. How would that work? It's simple actually: Early supporters can make themselves known as such by supporting REPDEV openly. The data about what they have contributed, and when, would be stored somewhere on the internet, first in centralized databases (in which case some redundancy should be applied), later in decentralized data storages. With this data, reputation can be allocated to those early contributors once the reputation economy has matured, as appreciation for their efforts to bring the reputation economy into existence. This reputation would then provide great rewards for contributors, probably the more the earlier the contribution happened and the larger it has been.

So, supporting REPDEV openly can be seen as long-term investment in one’s reputation. Also, early support helps establishing a reputation economy faster, and with a higher chance of eventual success. Even small amounts of early support can bear large reputation fruits later on. Of course, also late supporters will be rewarded with reputation, but probably to a lesser degree. And there is no guarantee for this reputation reward to happen at all, because reputation is rewarded by people based on their subjective preferences – and not due to some fixed algorithm that would take into account contributions and assign values to them.

Note that this reputation incentive system assumes an already established global reputation economy that eventually becomes more important than the reputation networks or the hub NPOs. Although it might be possible to use the reputation incentive system with the hub NPO reputation network, it would be an improper use of that reputation network, which is supposed to be used to reward actual work instead of donations.

Summary of the REPDEV Network Operating System

The REPDEV network has three main layers: The swarm, the hub NPOs, and all the collaborating organizations. It will operate as symbiotic reputation swarm network applying teal principles wherever possible. Suggested reading materials are the books Reinventing Organizations and Swarmwise, because they provide the basis for the REPDEV guidelines, which will be developed in an evolutionary manner. Finally, early REPDEV supporters can have reasonable hopes to be significantly rewarded for their contributions sooner or later.

If you want to support REPDEV in any way, please share this blog post series or contact me through any of the following channels:


What is the REPDEV Network?
The REPDEV Network Eco Transformation Strategy