[p2p-research] Peer to Peer business model in India, comments requested by initiators

Thu Jun 5 13:39:02 CEST 2008

see below for an interesting free software collective in Pune, India. The
organizers would welcome
any comments,

and feel free to forward info on this intiative, especially the requests for
collaborations at the bottom,

Michel

On 6/5/08, Paritosh Pungaliya <pungaliya.ag at gmail.com> wrote:
>
>
> Hi Michel
> I am Paritosh from Pune, India
>
> with ref to our telcon 2 days back:
>
> *Objective for starting WikiOcean-Software unit
> *To build a non-proprietory commercial organization based on revenue
> sharing model. In any business.
> Inspired by free software foundation's model to create software, we decide
> to experiment and extend it to management.
> So we started operating and simultaneously also kept on evolving the model.
> At this stage what to do, what market, how to do, how revenue sharing would
> work, how to decentarlise decision making was not known.
> The concept is now put up at www.wekosystem.org
> We started with software because it has low fixed cost and high margin and
> high growth.
> On average India Software companies figures are
> Salary cost 30%
> Overheads  40%
> Profit          30%
> for product companies it looks still better.
> So if we share all the profit with peers(workers) then retention would we
> higher, growth would we better, customers would be more satisfied.
> *Starting*
> Since last  May 2007  we are working on to build a  peer to peer
> decentralized business model.
> We hired people on minimum assurance of market level income per month or
> revenue share whichever is higher.
> We did not spend time trying to find people who like the concept and would
> want to support it by working for it free.
> As not much was defined and no such model that we were talking had ever
> worked. Specially given  the economic situation in India its difficult to
> get people to work for concept even if they want to.
> Initially we started with software outsourcing work like website and
> related stuff.
> But soon realized that  building brand to get good billing rate would take
> time, which will make it difficult to retail good people.
> Also the signs of US economic slowdown were quit apparent then, which would
> further put pressure on billing.
> *Focus Change*
> So we decided to focus on ERP and CRM product *integration and
> implementation*, rather than outsourcing to start with.
> India our target market to begin with has no good low cost products for mid
> size companies, with strong GDP growth It appeared very promising.
> We did R&D for 6 + months trying to identify which products to select for
> support based on their architecture.
> Meanwhile since starting we are also developing a product called GnuPool -
> Focus on integrating different products and lot of other imp features.
> GnuPool form the basis on which we plan to integrate and deliver projects.
> *Launching*
> We finally started to market the ERP and CRM in local area around Pune and
> Mumbai by participating in industrial Expos.
> The response has been more than what we  had imagined. Now the marketing
> team 8 peers is also trained.
> Till date we have 7 erp orders total valued at RS 15lacs ($37500), it takes
> average 2 months to close a deal.
> Lot of inquires in process, *expect to break even in next 2 months.*
> Our average monthly expense is Rs 10lacs ($25000).
> *Implementation*
> We have started to implement erp as per requirements from June-08 in 2
> month expect 5 implementation to be completed.
> To de-risk the process we decided to expand the team and create assembly
> line kind of set-up.
> So first focus was to train new people rather than go for implementation.
> This also reduces person dependency, and also increases per person output
> as people can focus on specific areas.
> We are now about 150 peers.
> *Contribution based Revenue Sharing*
> We have designed a model for revenue share based on points called Reppos.
> Reppos are distributed by peers amongst themselves based on quantity and
> quality of work done in that period.
> Reppos are not linked to success or failure of each project, but efforts
> taken to achieve the given targets.
> The registered legal entity does not keep anything for itself. For defined
> in our agreement with peers.
> This model has already evolved to to take care of following questions
> 1) What is share of each individual based on its quantity and quality of
> contribution ? 3 months in use with 100 + peers
> 2) How do you ensure that people also focus on decision and efforts for
> future growth and not just current income ?
> 3) To ensure that all distribution happens on predefined standards without
> any personal decision being involved, to eliminate the chances of disputes ?
> 4) That innovation is rewarded ? model has been adjusted for it, needs to
> be tested.
> 5) Decision making for resouce allocation based on another points called
> Wekos would be implemented 3 months.
> *Website*
> All the above calculation would we available for public to see at our site
> within 1 to 2 months at max which is being updated for the same.
> Our site www.wikiocean.net has lot of missing things as of now.
>
> *Dimentions of the model* :as evolved over the last year.
> *
> Revenue potential* -      is very high as product implementation and
> integration offers good margins
> *Market world over* -      This service has good potential in markets
> world over.
> *Product independent* -  At core their is no product risk as we are
> working on most popular community products. But are not dependent on them.
> *Existing community* -   Huge number of contributers who have no
> alternative but to work for propreitory companies, would love to be part of
> it.
> *Low Capex* -                can be extended at very low to zero cost in
> new areas.
> *Centralization* -            decision are taken by the organization,
> customer interacts with one legal entity only.
> *Decentralization* -         peers take decision based on the track record
> measured by Wekos.
> *Personal Judgement* -   As the model is implemented in phases the role on
> central management is reduced to near zero.
> *Freedom* -                   A peer is free to chose the work, with who
> an how is association or other peers.
> *Minority opinion* -         Through Wekos even people with minority
> opinion can enforce decisions on the system.
>                                   (crazy innovators all always in minority)
> *Equity in Distribution* -  Though no system can claim to 100 % perfect,
> we think at current stage this model is far more efficient in surplus
> distribution as compared to convention ownership based models. But still it
> can compete with those in markets.
> *No Commitments* -       As the model is designed to work in market
> environment, no personal commitment from peers is required, no special
> regulation to enable or protect it, or external subsidy would be required.
> Peers should participate because a model delivers and not because of
> emotional attachment to a cause.
>
> *Looking For*
> Peers who would want to join us.
> Peers who would want to extend and help us evolve and refine this further.
> Peers who are working in similar lines in true spirit of a co-operative.
> Peers who could fund new experiments that we are planning.
> Peers who could help us explain and document this.
> Peers who could guide us and help us take this concept to potential peers.
>
>
> --
> Paritosh
>

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