Peer-producing a for-profit startup.

Ant Party
By tarotastic (tjt195 on flickr)

I’ve been experimenting with peer-producing the first for-profit property coming out of the social venture commons. So far I’m finding once again that there is no better way to learn than to try doing it.

So what’s different about bringing ‘peer-producion’ into the mix? Well so far the difference I’ve most experienced is the degree to which I’m compelled to share what I’m working on at this early stage. It’s not what I’m used to but it is getting more people involved and having a definite impact on how the idea forms and how quickly it becomes reality.

It also brings up the question of how to share equity in the early stages which in my experience is best saved for those who 1) make a meaningful impact on core concept and 2) are going to be part of the team that will get it through the founding phase and into the growth phase.

The conversations around this from one side are around how do we distribute equity fairly using some form of measure as a baseline (e.g. hours in) and on the other side… non-existent (e.g. “can’t talk… building”). For me it’s my inclination to let it ride until we get a crystallization event – which will be in Q1 of 2009 and then take stock of where we are at and work it out in conversation. Logically I’d like a formulaic approach but nothing’s ‘felt’ like it would work yet.

So what seems to be tested by bringing in ‘peer-production‘ into a for-profit startup are:

  1. blurring the edges of organization (permeability)
  2. allocating parcipation rights to future wealth (distribution)

I think this might get easier as the venture gains momentum, size, and value because the value of each individual contribution will be smaller than the value of whole. I’m not willing to bet on that yet though – as that may simply be the lure of convention and I’m sure there will be host of other challenges.

It’s an interesting journey and would love to hear other thoughts/examples/discussion. Fire away in the comments or feel free to ping me directly.

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