Open Startup Melbourne presents Open enterprises: A look at collaborative innovation, authority and decision models. The presentation explores novel business structures around virtual organizations and dynamic models that account for more peer to peer and collaborative work processes in a networked world.

2. BACKGROUND
MARK SOKACIC – HOST
SERIAL ENTREPRENEUR
MARK@AIROVATE.COM.AU
• CURRENTLY OPERATING AIROVATE – CREATING SOCIAL COMMERCE AND LOGISTICS PLATFORMS
• 18 YEARS EXPERIENCE IN 9 STARTUPS
• MAINLY IN WEB AND OUTDOOR EVENT TECHNOLOGY

3. BACKGROUND WHY THIS TOPIC?
THE INTERNET: A REVOLUTION IN COMMUNICATION, SOCIAL & BUSINESS
RELATIONSHIPS
•ARE THERE BETTER WAYS OF ORGANISING A BUSINESS?
•HOW DO YOU STAY AHEAD OF THE COMPETITION?
•IS CONTINUOUS INNOVATION THE ONLY WAY TO STAY AHEAD OF THE
COMPETITION?

4. TRENDS – INDUSTRY & SOCIETAL
•VALUE IS SHIFTING FROM TRANSACTIONS TO RELATIONSHIPS
•NEW INDUSTRIES TAKING SHAPE
•MASSIVE MARKET FRAGMENTATION & FRACTALISATION
•SHIFTING CONSUMPTION PATTERNS

5. PROPHETIC WORDS
12 PRINCIPLES OF THE NETWORK ECONOMY – 1997 (WIRED MAGAZINE)
KEVIN KELLY – FOUNDER OF WIRED MAGAZINE
FOUR OF THE NEW RULES
1. WEALTH WILL FLOW DIRECTLY FROM INNOVATION, NOT OPTIMISATION. WEALTH CREATED BY SEIZING
THE IMPERFECT UNKNOWN
2. IDEAL ENVIRONMENT FOR CULTIVATING THE UNKNOWN IS TO NURTURE THE AGILITY AND NIMBLENESS
OF NETWORKS
3. CULTIVATION OF THE UNKNOWN MEANS ABANDONING THE HIGHLY SUCCESSFUL KNOWN
4. AS THE NETWORK ECONOMY GROWS THE CYCLE OF “FIND, NURTURE, DESTROY” HAPPENS FASTER AND
MORE INTENSELY

6. THE INNOVATORS DILEMMA
•ESTABLISHED COMPANIES DO ALL THE IMPORTANT THINGS RIGHT
•DOING ALL THE RIGHT THINGS MAKES THESE COMPANIES FAIL
THINK KODAK, FORD, NOKIA, HARVEY NORMAN, BLACKBERRY
•DISRUPTIVE INNOVATIONS USUALLY START BY SELLING TO NEW OR UNPROFITABLE
CUSTOMERS
•COMPANIES INVEST IN IMPROVING MAINSTAY PRODUCTS OR SYSTEMS, OFTEN TO THE
POINT WHERE QUALITY OUTSTRIPS WHAT THE MARKET NEEDS
Clayton Christensen - 1997

7. STRUCTURE
•COLLABORATIVE INNOVATION – WHY DO IT?
•OPEN ENTERPRISES – WHAT ARE THEY?
•AUTHORITY & CONTROL – HOW TO CO-ORDINATE?
•DECISION MODELS – WHO DECIDES?

8. COLLABORATIVE INNOVATION
– WHY DO IT?
•DECREASE COSTS AND INCREASE VALUE TO THE CUSTOMER
•INCREASED AGILITY AND SPEED TO MARKET
•COMPETITIVE ADVANTAGE TO THOSE WHO LEARN HOW TO EMBRACE DE-CENTRALISED
POINTS OF CONTROL
•RELATIONSHIP TECHNOLOGIES ENHANCE, AMPLIFY, EXTEND, AUGMENT, AND DEVELOP
SOFT RELATIONSHIPS

9. COLLABORATIVE INNOVATION
– WHY DO IT?
•RICH, UP TO DATE, DYNAMIC PRODUCTS & SERVICES
•LOWEST COST OF PRODUCTION
•GREATEST DEGREE OF INNOVATION & DIVERSITY
•GREATEST EXPOSURE AND AWARENESS OF ACTUAL MARKET STATE
•HARNESS COLLECTIVE INTELLIGENCE
•E.G GOOGLE ANDROID, OPEN STREET MAP, GOLDCORPT

10. WHAT IS AN OPEN ENTERPRISE?
MAXIMAL USE OF COST LEVERS
•USING OPEN SOURCE PRODUCTS
•OPEN DATA
•OPEN CONTENT
•OPEN COMMUNITIES
•OPEN THINKING
INNOVATION IN OPERATION
•NEW METHODS OF VALUE CREATION
•NEW METHODS OF VALUE
TRANSFORMATION
•NEW METHODS OF CONTROL
•NEW METHODS OF DECISION MAKING
•NEW METHODS OF OWNERSHIP

11. THE OPEN ENTERPRISE MODEL
CASE STUDY BETTERMEANS.ORG
•A DEMOCRATIC AND MERITOCRATIC BASED BUSINESS MODEL
•VALUES CENTRED FORMATION
•DEMOCRATIC PARTICIPATION & DECISION MAKING
•VARIOUS OWNERSHIP MODELS POSSIBLE – MEMBERSHIP, EQUITY, CREDIT
•SPEEDY DECENTRALISED AND AGILE DECISION PROCESS

12. AUTHORITY & CONTROL
- HOW TO CO-ORDINATE?
HIERARCHY OF TRUSTED MEMBERSHIP
• BOARD – OF TRUSTED ADVISORS
• CORE TEAM
• MEMBERS
• CONTRIBUTORS
• ACTIVE USERS – VOLUNTEERS
• COMMUNITY OF USERS

13. AUTHORITY & CONTROLHOWTOCO-ORDINATE?

14. WORK STRUCTURE

15. DECISION MODELS
– WHO DECIDES?
THE PROCESS – ALL INPUT WELCOME AT EACH DECISION POINT FROM ALL MEMBERS
PROPOSE, DISCUSS, VOTE DECIDE
DECISION MODELS – BASED ON SCOPE OF DECISION AND STATUS WITHIN THE ORGANISATION
(TRUST LEVEL) I.E. BINDING & NON BINDING VOTES
• LAZY CONSENSUS
• LAZY MAJORITY
• UNANIMOUS CONSENSUS
• CREDIT MAJORITY

16. AGILE DECISION MODEL

17. IDEAS FOR NEXT EVENT?
SOMETHING THAT ENTREPRENEURS HAVE BEEN WAITING FOR A
LONG TIME
A NEW WAY TO SPLIT EQUITY IN A PRE-REVENUE STARTUP
DYNAMIC EQUITY SPLITTING USING THE GRUNT FUND CONCEPT
BY MIKE MOYER, AUTHOR OF SLICING PIE

18. REFERENCES
CATEGORY: OPEN ENTERPRISES
CASE STUDY: BETTERMEANS.COM
• OPEN ENTERPRISE MANIFESTO @ BETTERMEANS.ORG
• OPEN ENTERPRISE GOVERNANCE MODEL @ BETTERMEANS.ORG
• HTTP://OPENNEWS.COM.AU/
• HTTP://WWW.ZDNET.COM/BLOG/HINCHCLIFFE/THE-EMERGING-CASE-
FOR-OPEN-BUSINESS-METHODS/218
CATEGORY: INNOVATION, FRACTAL MARKETS
• MOORE, G. A. (2005). DEALING WITH DARWIN: HOW GREAT COMPANIES
INNOVATE AT EVERY PHASE OF THEIR EVOLUTION.
• CHRISTENSEN, C. (1997). THE INNOVATOR'S DILEMMA: WHEN NEW
TECHNOLOGIES CAUSE GREAT FIRMS TO FAIL
CATEGORY: TRENDS, SOCIAL ECONOMY
• BEINHOCKER, E., DAVIS, I., & MENDONCA, L. (2009). THE 10 TRENDS YOU
HAVE TO WATCH. HARVARD BUSINESS REVIEW, 87(7-8), 55-60.
• HTTP://WWW.ZDNET.COM/BLOG/HINCHCLIFFE/TWENTY-TWO-POWER-
LAWS-OF-THE-EMERGING-SOCIAL-ECONOMY/961
• KELLY, K. (1997). 3.14 NEW RULES FOR THE NEW ECONOMY: TWELVE
DEPENDABLE PRINCIPLES FOR THRIVING IN A TURBULENT WORLD8.
• KELLY, K. (1998) NEW RULES FOR THE NEW ECONOMY: 10 RADICAL
STRATEGIES FOR A CONNECTED WORLD.
CATEGORY: BUSINESS MODELS AND DESIGN
• MINTZBERG, H. (1993). STRUCTURE IN FIVES: DESIGNING EFFECTIVE
ORGANIZATIONS. PRENTICE-HALL, INC.
• HAMEL, G., & BREEN, B. (2007). THE FUTURE OF MANAGEMENT. HARVARD
BUSINESS PRESS.
• HTTP://JOAQUINROCA.COM/2013/03/ORGANIZATION-DESIGN-FOR-
STARTUPS/