Kelly's Heroes Model of Nascent Organization

The Kelly’s Heroes Model of organization that is being employed in this project needs clarification and development. When there was basically Steve, Dave and I pursuing this idea of waste water recycling, the organization was rather simple. This was my project, and these guys were helping as much out of friendship as a profit motive. We were curious entrepreneurs pursuing a wild idea; and we each contributed time and energy as we could, with me shouldering the leadership. The idea was somewhat abstract, and the financing was coming primarily from me; although Steve and Dave invested in-kind resources (Steve waived some of his early research charges and Stiffler-Mcgraw later donated the roof plans for the workshop/laboratory, and Dave donated some time for designing the workshop/laboratory and a gray water recycling system). Each has been paid by me for a portion of their work based on an informally negotiated agreement (some emails chronicle the negotiations). Since the workshop/laboratory was being constructed at the cabin on Olean Road, which my family owns; I willingly accepted the early costs of the planning and construction for the workshop/laboratory. The reason why I should unilaterally bear these costs is straightforward. If the project fails, I at least still have the workshop/laboratory as a fixed asset; and nobody else has any claim to it. It keeps things fairly clean.

 

Now that the project has reached the point of developing actual prototypes, a product that is portable, a different type of mutual investment arises. To this point, I have completely handled the expenses related to the materials in the first recycling shower prototype (about $1,000), and have done all the labor (over 40 hours).  I personally accepted these costs and the work, because it would expedite the development process; it's my project, I'm supposed to lead.  Also, this first prototype is not really something ready for the market.  It's Robe Goldberg, at best; and If you want to see it, then you need to come to the lab.  It's fitting that i donate my time and resources to prove to the team that the idea is feasible.  I believe that I have done that.  We'll meet soon at the lab so everyone can witness the concept.  Regardless of my contributions,  I make no personal claims on the prototype, or its intellectual property beyond the right to the components I bought, if the project fails. I give them to the team effort. But I can only give so much. The project would not be to this point without the "team".  Yet, the ratio of my contributions to those of other team members needs to change; if the project is to be successful in moving from idea to enterprise.  We are rapidly approaching a decision point to move to the next prototype; and if we do it will mean a new round of financing will be needed and new determinations of what it means to keep-up will have to be made.

 

If the project moves from "concept testing" to "beta testing" and Marketing", the team will face new demands.  These demands will determine what it means to be contributing and keeping-up.   Some changes I perceive will occur are: Furhter  prototype testing will be required to prove it will be successful (i.e., experiments show that quality shower water can be produced with an off-the-shelf-recycling-system), then a more practical prototype will need to be developed (i've been thinking about a hand-washer as a first demo-model).  The prototype needs on a tour (e.g., a trade show) to test the concept.  A marketing strategy needs to be developed and implemented.  Me first blush is to market the water recycling products via trade shows, direct contact and  the Internet (e.g., my website, Ebay, etc.).  The protoype and related tactics need to  clearly demonstrate that water recycling for things like hand-washing, showering, running a sink or lav is practical.  There will be a need for pictures and streaming video, which can be done amateurishly for almost nothing.   A skimming marketing strategy (e.g., higher margins) seems prudent at first; whereby we claim that we can build a variety of custom-made products at a premium price.  Profits are then used to finance further development.  This way, we can boootstrap.  However, we need to have an effective recycling approach that has curb-appeal - a good prototype, and idea about what we are doing (e.g., a typical fiberglass stall with components built-in and hidden); and that means some water testing needs to be done, first.  The system needs to be foolproof.  Dave and I also want to add the voice activation.  Yet, this prototype will also need to show that it can be cost-effective.  We need a prototype that can be reproduced at a cost that will make it marketable (It would be nice to innitially targeting these units to sell for several thousand dollars - a thousand more with voice activation), with little or no installation cost and extremely low operation costs of a few cents a gallon.  My estimate is that this next generation prototype will cost about $10,000 to construct and market. I am prepared to bear the cost to build it and peddle it, myself, but I would prefer it be a team effort (maybe a GBA grant, also).  I especially will need help in designing and engineering the prototype.

 

The Kelly’s Heroes Model makes it clear that you need to keep-up. According to the model, if the team moves to another phase that demands new efforts, those participating directly, sharing the sacrifices to the end, share the treasure directly at the end.  The model for this project has a slight twist.  First, there has to be "carried interest", because this is a very legalistic society, we can account for contributions through time, and we can send them a check in the mail.  Second, there is no clear end as there was for Kelly's Heroes.  If this enterprise is successful, the profits will flow for a long time, not just when we steal the gold from the Nazi's.  Since this model is a bit different, the rights and responsibilities for of keeping-up need to be clarified, as well as the ramifications of not-keeping-up.

 

From my point of view, keeping-up is a matter of continuing commitment.  Keeping-up means maintaining connection to the project, and consistently looking for ways to contribute.   the first rule is simple.  Those teammates consistently making the contributions to the enterprise will be the ones deciding the fate of any shares and rewards.  At this point, I realize that I'm pretty much making the decisions, paying the bills and leading, but all that needs to change if this is going to be a successful organization.  Sustaining organizations are made up of various members contributing in an energetic and coordinated manner.  I hope to have many team members pass me in contribution.  But those new leaders will have be consistent; keeping-up is being there.

 

Let me say some things about carried-interest; just in case some teammates do drop out.  Carried interest involves keeping an accounting of contributions, and then determining the shares or rewards based on contributions.  Kelly couldn't carry interests forward.  You had to be there to personally get your full share of the gold bars (However,  Kelly did take care of some who helped).  I can assure you that I am trying to account for all contributions and document them (see Business Plan) and will not forget the efforts of every participant along the way. In the business plan, I have documented how Steve has a share as long as I’m involved, and I will look out after it. Dave, Bud, Tim and others have an interest that will entitle them to a share, regardless of future participation. However, what those shares are worth is very subjective at this time.  What is not subjective is the rule that those that do not keep-up as the project evolves place their fate in the hands of those who do keep-up. In other words, each point of departure in the project has its unique need for contribution.  New energies, resources or monies will be needed as the enterprise goes forward.  The costs of development and speed of events are likely to change dramatically.

 

I liken this point in the project to the time Kelly and Oddball were about to cross the last river before the town where the gold was, and the bridge was blown-up moments before they could cross it. They called-in the engineers to help build a pontoon bridge, promising them a share. As Kelly and Oddball crossed the river and began moving-on toward the town, the chief engineer asked Kelly to wait for his people.  Kelly told him, “You need to keep-up.” Like Kelly, I have no intentions to wait or turn back. I may be asking participants to share some of the costs, co-sign grants or loans and increase pro bono work; and will expect them to keep-up. Those that keep-up will be intimately involved in the decision making; those that fall behind will lose touch, and place their treasure in the hands of those keeping-up.

 

A formal meeting will be called soon to discuss these matters, and the project in general.  I would like to have called a meeting in January; but problems with the Aqua Sun filters set me back a couple of weeks. Also, the weather has been pretty bad; there’s no parking at the cabin with all the snow. A meeting in February is more logical – I’ll wait until the snow melts enough to park at the cabin. Everyone who has participated so far will be invited; and I’ll try to schedule it for maximum attendance.