The RHours, Mobile, Business Model

RHours introduces a mobile, business ownership model. In businesses built using the RHours model, ownership moves through a network of participants over time. As each participant contributes their unique gifts to the combined effort that creates the value of the business, ownership agreements are captured in computable, financial instruments, bound directly to revenue from the market.

Each RHours business is made of three primary pieces: contributions, revenue, and governance. A contribution is any value brought to the business. Typically, contributions are in the form of human effort, or an asset, like money. RHours contributions are priced at the time they are accepted along with a compensation agreement that captures both the current and future value of the contribution. Future values are based on the risk associated with ultimately receiving full compensation.

Governance of an RHours business is used to represent the interests of holders of any outstanding, uncompensated contributions. Holding an uncompensated contribution entitles the holder to ownership rights. As contributions become fully compensated, ownership rights are removed. It is in this way, that the RHours business model can be described as mobile. This concept of mobility is at the heart of the computational system that inspired the RHours business model called the rho calculus and implemented within the blockchain computer called RChain.

The RHours Market

Looking forward to a world of many thousands of RHours businesses each with many contributors, we can imagine an active marketplace for RHours revenue contracts. Because an RHours contract is captured in a trusted compute environment like RChain, holders of these contracts can be assured that when revenue is received by the business which accepted the contribution that the holder will receive their share of compensation up to the maximum bound in the contract.

These contracts are transferrable, creating a secondary market of these revenue bonds which allows holders to sell their contributions before they are fully compensated. This market becomes an instrument for capital investment in RHours businesses. Contributors may offer any portion of their accepted contribution bonds to the market to receive immediate, though patrial, compensation.

The Revenue Stream for RHours

The RHours organization is a business that licenses and supports the RHours business model. The RHours business earns revenue through fees for use of both on-chain and off-chain software, licensing of the business model, business consulting services, and promotion of the model.

It is not expected that the RHours business will generate a great deal of revenue compared to the revenue of the many businesses that will license the RHours business model.

An RHours Business Lifecycle

What happens when the last contribution of an RHours business is fully compensated? In a traditional business, one that is not mobile like RHours, this is not a reasonable question. But, an RHours business is semi-autonomous. There can be a last contribution and that contribution can be completely compensated. But, even still, an RHours business might continue to provide value to customers. For example, consider the RHours organization itself. Imagine it takes 10,000 hours of human effort to create the RHours organization. This work would involve tasks like writing legal documents, writing smart contracts, etc. RHours will charge its customers for their use of these items but only until the contributors are fully compensated. If there's nothing left to do and all past contributions have been fully compensated, the RHours value is available to all, free of charge.

An interesting consequence of this aspect of the RHours model appears when considering versions of software. Today, many software businesses need to continually create new versions with, perhaps, unwanted features in bundles which customers might not want. Using the RHours model, once the contributions which created a particular version are fully compensated, that version is now free along with the source code which created it. Because of this, a group of investors, contributors, and customers could group together to develop a small point release of the software which addresses only the concerns they have with the free version. They will pay for the fixes and desired enhancements but will not have to pay for unwanted features.

Building the RHours Organization

RHours is, itself, an RHours business. It is currently a one person operation with two occasional contributors. RHours is currently accepting contributions at 125% of a contributor's normal hourly compensation demonstrated from previous work along with a 10x interest incentive. For example, if a person usually makes $100 per hour then RHours will accept their contribution at $125 per hour resulting in a $1,250 debt to be paid from future RHours revenue (when there is some). The 10x interest incentive is available for a limited time and will be reduced as participation in the project increases.

Contributions are not immediately accepted. All contributions must be approved in advance by RHours governance which, right now, is one person, the founder, Glen Braun. Note too that RHours is only established as a d.b.a. of an LLC owned by Glen. It has no formal documents or procedures yet to accept contributions and they are not yet being recorded on a blockchain. RHours is in its infancy. Establishing itself legally and putting effective procedures in place to support contributors is RHours' first priority.

To become a viable business on a firm legal standing, RHours is looking for the types of contributions any startup would need. A must have requirement for any contributors is an understanding, acceptance, and desire to promote the RHours business model.

Contributions Wanted

While it may be that many modern businesses are fairly dynamic, an RHours business exists with a continually shifting ownership. RHours needs legal contributors to assist with forming and operating this new type of business.

RHours is looking for these contributions. Initial founders receive their normal hourly wage and a 10x interest incentive. This offer is available for a limited time.

• LLC Operating Agreement

  • Right now RHours is formed as a d.b.a. arm of Glen's personal LLC, called LP4-3, LLC. Assuming an LLC is the right form for RHours, an operating agreement is needed which explains the rights of contributors, governance procedures, etc.
  • More generally, any business that uses the RHours model (these are clients of RHours the organization) also need operating agreements, which instill the RHours model into their business. RHours will supply guidance on what would allow another business to use the RHours brand.
  • Securities guidance. When contributors give their time or money to an RHours project, if their contribution is not immediately compensated, then that compensation is taken as a loan that is promised to be paid through a smart contract from revenue. This is a debt instrument and is an investment made by the contributor into the business using the RHours business model. Is this a security? It is assumed that a business can have many partners who bring their contributions either in the form of capital or effort.

• Compensated Open Source License

  • Open source licenses use copyright law to stipulate the rules of sharing of copyrighted material. The RHours compensated open source model works similarly. It supports freedom of creative works but requires compensation for use. It requires public transparency, provided by blockchain computer systems, of the contributions and their status of compensation. Also, once a contribution is fully compensated, the creative contribution is released, freely to the public. RHours needs legal assistance with drafting this open source copyright license. The license itself will be held under copyright and will be licensed for use by businesses using the RHours model.
  • A contributor license agreement (CLA). Business that use the RHours model will be paying contributors out of the business' revenue. When accepting a contribution, these companies must ensure that the contributions they receive are truly the personal work of the contributor and that the contributor has the right to their work. If the contributor is under an employee agreement they might have, for example, signed a waiver of their rights to their intellectual property. Also, there are policies of the RHours model which contributors must agree. These need to be within the CLA.

• Tax Law Advice

  • RHours needs tax law advice
  • What tax obligations will an RHours business have?
  • What are taxable events for RHours contributors?
  • Contributions can come from citizens of virtually any country in the world. What country-specific rules apply?

• Accounting and Profession Services

  • RHours needs general accounting services to set up an accounting system.
  • RHours developers will create the smart contracts needed for the system, but an accounting professional is needed to properly account for payments and integrate the smart contract results with the accounting reporting needs.

• Founders Life-Support

  • Right now, the RHours founder is unemployed and funding his work from personal savings. This can't go on forever.
  • The two occasional contributors are in a similar position.
  • Because the RHours organization is using the RHours model itself, these founding contributions can be offered for sale to supportive investors. A promise of some monthly/yearly budget which these founders can expect to sell their contributions would provide the support needed to continue the work on RHours.

• Funding for Initial RHours Projects

  • The RHours organization will not generate considerable revenue compared with the companies which use the RHours business model.
  • Any business idea which would have an expectation of generating revenue is a potential customer of the RHours model.
  • To develop and prove out the RHours model, some number of initial customers are required. These projects will need funding by investors who are comfortable and supportive of the RHours business model. Like the RHours organization itself, these projects will offer a 10x return to initial contributors.