MG Taylor History and Business Model

The End Game

 

The Story

20 years ago, Gail and Matt Taylor moved to Boulder, Colorado to start a new business based on a unique way of working.

Both, by this time, had over 20 years work experience - Gail in education, Matt in architecture - their focus, in 1979, was on creativity, the environment that stimulates it, and why individuals and organizations where not using - to greater individual and social advantage - the many alternatives that were available to them.

What is now MG Taylor Corporation, AI, the KnOwhere Stores, Yoke (CyberConn Systems) and iterations was started in Boulder in August 1979.

The first environment, the Anticipatory Management Center, was built in the spring of 1980. The first work done in the Center was for the Affordable Housing Project DesignShop process with the City of Boulder.

The Taylors left Boulder at the end of 1983 when Acacia purchased the Enterprise, however, the environmental design group stayed behind and is now AI, an affiliate member and Business Unit of the MG Taylor ValueWeb.

In this regard, MG Taylor has never left Boulder and the place of its origin.

Today, MG Taylor and its affiliate organizations and Business Units, offer a wide variety of products and services designed for the “knowledge/network Economy.” These are delivered, across all product/service lines and all Business Units in four modes:

(1) CONCEPT - Descriptive/Consultative

(2) TEMPLATE - Drawings, Specifications and Manuals

(3) PARTS - Pieces and Components

(4) SYSTEM - Turn Key.

 

These four modes make it possible for ValueWeb members and users of Taylor products and services to access them at the level of formation they desire and at a price-point they can afford. These access modes are available be the product/service a DesignShop, a NavCenter, a table, the modeling language or a workshop.

MG Taylor has been and remains a pioneer of the Network Economy. It has “created the market” in a variety of categories including an entirely new approach to collaborative work and the practice of “Group Genius” - as well as - the creation of new places to work, new tools to work with and new means of working remotely. MG Taylor has been recognized as a “Fast Company” by FastCompany magazine.

We are now expanding this portfolio by creating the computer support and augmentation systems necessary for doing the Taylor work process effectively.

The essence of this method is the integration of work-processes, tools and environments in a way that systematically promotes Group Genius, synergy and emergent behavior among human agents and agents of all kinds. This is accomplished by a patent-pending process. The expectation is for the Patent to be issued by the end of the first quarter 20001.

In essence, the Taylor way of working offers 21st Century organizations and ValueWebs an OS - an operating system - for functioning as a network enterprise in the emerging economy.

This OS is offered as a philosophy within the framework of a Modeling Language and as a suite of integrated processes, tools and environments necessary for the execution of real work.

The focus of this method is the creation and use of ValueWebs - which many now believe to be a critical organizing principle for effective participation in the new economy - and, the employment of Group Genius by those ValueWebs.

Over the years, MG Taylor has conceived and designed this organizational strategy, build the processes and tools to support it, the environments for it to act in, and has become an example “of one” by the execution of its own organizational structure.

This pioneering effort has involved a great of deal design and planning, significant trial and error and a few false starts. MG Taylor, and its various affiliate enterprises, has been a lab for both discovering and executing a new enterprise strategy.

At the beginning of the 21st Century, MG Taylor has emerged as a maturing Network Economy Enterprise that offers a significant suite of integrated products and services for the creation and support of network organizations and the new economy.

These are delivered by a ValueWeb that exemplifies the organizational strategy these products and services are designed and delivered to support. Thus, MG Taylor brings 20 years of real-world experience to the work it offers investors, customers partners and clients.

MG Taylor does not do work for clients - it acts as a System Integrator of a specific ValueWeb domain - of which the client is an active member. It is this structure/process that creates and distributes the value sought.

In addition to this System Integrator role, some aspects of the work are sometimes directly provided by MG Taylor and its affiliate organizations and Business Units. Much of it, and sometimes most of it, is provided by extended ValueWeb members.

Within the MG Taylor ValueWeb are many individuals and organizations with the know-how and organizational ability to provide what is required in a wide variety of circumstances. The ValueWeb grows, organically, as new challenges are presented. MG Taylor organizations and members remain active as product/service providers along with their “Commissioner of Baseball” role.

MG Taylor, and the ValueWeb are moving well beyond the cofounders who now are becoming members of the ValueWeb pursuing their own projects as they continue to work with in Taylor organizations on a systematically diminishing basis.

Today, in early 2001, the market revenue value of the activities associated with the Taylor way-of-working within the total ValueWeb is in range of 100 million dollars a year - and growing.

New ValueWebs are being created based on, or partially based on, the Taylor OS. This way of working, a mixture of open code and proprietary IP, is becoming ubiquitous

For MG Taylor, the startup process is complete. This startup was brought to a demonstration level with less than $600,000 of invested capital. Between 1979 and the first quarter of 2001, $43,000,000 of Revenues were earned and spent - with all operating profits reinvested - to create both the proprietary Taylor System and the organizations that now source it.

In addition to the equity investment and Revenues, five and a half million dollars in debt financing was required to do the task. This debt peaked in 1998 and was reduced by over a million, from profits earned, in late 1998 and 1999. By the end of the 2001, this debt is expected to be less than 2.0 million. The consolidated Balance Sheet of the Enterprise will be positive.

Today, the Taylor ValueWeb is populated with a variety of producer-investor-user owned and operated organizations. The goal is to substantially grow this web over the next 12 months.

This will be accomplished by the Core Business Units substantially increasing revenues with a series of Alliances and Joint Ventures and by small investments in their stock.

In the last quarter of 1999 and into the first quarter of 2000, the entire Enterprise concept “came together” into an integrated practice. This was facilitated by executing this End Game Strategy and Business Model, pursuing all merger, ownership and partnering alternatives until the market “voted” and the best path was determined.

The path “chosen” was the spin off of each Business Unit, the development of an integration/coordination board, and the proposal to created of a largely self-funding Enterprise through the “Wit Beer” method of establishing a trading market for The Taylor Business Units and selected ValueWeb member’s stock. Neither the integration board concept or trading market are executed as of 2001. There are still substantial questions regarding how this can be accomplished. The objective is to create individual investor liquidity without distorting the Enterprise with an IPO or other exit strategy.

The following is a brief status report of each MG Taylor Enterprise member up dated in January 2001:

 

MG Taylor Corporation Purpose and Work:

Develop and market Taylor IP Licensed from iterations.
Facilitate and develop (commissioner of Baseball) the Taylor ValueWeb.
Develop new IP related to our core business focus.
Develop new IP with and for other startup and established organizations.

Maintain and develop client and business (meta) relationships (all four Business Units). Provide System Integrator services for (large scale) PatchWorks exercises. “Consolidate” the “bottom” end of the boutique “transformation” service providers.

Present State:

Negative Net Worth just under $1. Million (consolidated - all Business Units).
Credit rating back to “fair” - recovering from late ‘97 and early 1998 operations.
Internal Board - developing external members.
IP defined and mostly protected.
Being presented with many new opportunities:

Several JV and product development opportunities.
New major License Opportunities.
Interest from several academic organizations.
Several network growth opportunities.

Two NavCenters in successful startup with a couple on the drawing boards. The NavCenter product is now mature and ready for transfer.
Cash flow across all Business Units is not, yet, sufficient to retire debt and finance growth. It is approaching this level, however.
True value of Enterprise is not stated on Financials or by BDO.
No new debt created in last 18 months; we are meeting current obligations.
Some ambiguities associated with EY License.
BDO evaluation 11.5 million for all stock - intangibles not considered.

Organization:

C Corporation.
Owns controlling interest AI and KnOwhere Stores, Inc.
Core management and delivery team of 7.
Outsourced: accounting and legal.
Uses (pays rent and fees) KnOwhere Stores as office and delivery environments.
Fixed Overhead and cash flow requirements of $3,000,000 a year (including debt reduction and iterations Royalty).
Active Licenses: EY, AI, KnOwhere Stores, Yolke.
Active KnetWeb members: 25.
Senior external advisors: 6.

Products and Services:

IP Licenses.
Certification of Sites and KnowledgeWorkers.
System Integrator (process) of ValueWebs.
Provide Taylor OS (Method) in Modes 1, 2, 3, and 4 .
MG Taylor Web Page and e-commerce sites.
New Products/organizations Incubation.
Support NavCenter Operations (until transfer is complete).
Leadership of Taylor ValueWeb.

2001 Goals:

Publish the Manual.
Publish: “Building ValueWebs” - book/web site.
Complete the Patent.
Establish Trade Dress definition and market position.
Define what it is - & is not: DesignShop, a NavCenter, PatchWorks (& other products). Determine open source and proprietary mix and Modes 1, 2, 3, & 4 for all products. Evaluation of the Enterprise - and each Business Unit - stand alone.
Reconstitute the external Board.
Options and Grants issued.
Covert maximum possible Debt to Equity.
Spin off the Business Units - establish ROE between BUs and governance Board. Establish ROE for the ValueWeb.
Start management transition.
Tell our Story.
e-commerce capability (all four Business Units).
Bury the past. Eliminate all contingent liability.
Prepare for EY resolution of issues.
Explore creating an Internet “Wit Beer” Market for the ValueWeb.
Complete development of the NavCenter process and program - Transfer to KnOwhere.
Establish several new business relationships.
Create candidate list for “consolidation” efforts - start contacts.
Continue earning a bottom line profit individually and on a consolidated basis (all four Business Units).

Financial Objectives:

Establish Revenue from all product/service areas and all Modes (1, 2, 3 & 4).
Establish Business Unit profitability.
Accomplish $10,000,000 to $12,000,000 Gross Revenue & $20,000,000 run rate by year end - consolidated (all Business Units).
Attract significant investment in the three to 10 million dollar range (MGT, KnOwhere & Yolke).
Accomplish a Consolidated Value of all MGT Business Units of $100,000,000 within a year (mid 2001).

AI Purpose and Work:

Technical integration of process, tools and environments - RD& D through distribution. Position the concept, process & components of the next generation of workplace.
Develop a state-of-the-art rapid prototyping and low-scale production capability.
Build and support a multi-channel distribution system for AI and related products.
Work with and support Licensed producers of AI designs and systems.
Develop product for and integrated marketing with the KnOwhere Stores.
Develop, own, deploy and manage RDS environments.
Develop and operate community-based Centers.
Custom design and production of high quality architectural millwork.

Present State:

Profitable.
Own shop established: 15,000 square feet, 15 employees.
Production of product (in terms of rate and quality) is under control.
Production levels 90% scheduled through next several months.
Significant Revenues from call in, Internet, non-affiliate sources.

Affordable technology upgrade path to $5,000,000 production capability.

Organization:

C Corporation, stock - 80% owned by MG Taylor Corporation - 20% by Bill Blackburn.
Core Team of four: Management, Design, Production Scheduling and Sales.
15 full-time craftsmen in shop.

Products and Services:

Architectural design services.
Foundation Series WorkFurniture.
Foundation 2 System.
RDS deployments.
Mode 1, 2, & 3 Plans, specifications and kits.
Custom WorkFurniture.
Custom Architectural design, products and millwork.
Operation of Environments.
Technical Systems wiring, configuration and setup.

2001 Goals:

Design and Prototype Foundation 2 Series - Bat Wing and Armature.
Value engineer and Production tool the existing Foundation series.
Upgrade Shop with CNC, glue-racks, etc. - $5,000,000 level production capability. Reduce cost of all products by 25%.
Steady Production of Foundation Series - e-commerce and KnOwhere distribution. Accomplish competitive pricing through multiple channels.
Design Patents - all products.
Link design features with production capability to create unique signature advantage. Establish Board of Directors - weighted toward external Directors.
Accomplish spin off from MG Taylor Corporation.
Complete first embedded technology experiments.
Profitable relationship with KnOwhere Stores - good fulfillment and services practices. Successfully meet competitive challenges (large and startup companies).

Financial Objectives:

$4,000,000 plus Gross Revenue for 2000. $5,000,000 plus run rate at year-end.
30% profit.
Less than 25% Revenue from any single source.
25% run rate of Revenue from e-commerce and KnOwhere Stores by year-end.

 

KnOwhere Purpose and Work:

Be a "Network Economy," 21st Century Marketplace built around a new way of working. Equip the members of this marketplace (ValueWeb).
Be a distribution place for the Taylor products and services.
Provide major nodes for the Taylor KnetWeb and other JV NetWebs (ValueWebs).
Be a hot spot of start up enterprises by offering integrated incubation services. Establish a strong BRAND for brand extension and CO-branding ventures.

Present State:

KnOwhere is an idea that has just gelled.
KnOwhere is a strong support system of MG Taylor Corporation, its clients and Licensees.
KnOwhere has developed a strong independent business, client base and management.
Retail and WorkFurniture Sales are about $7,000 a month with potential for much more.
Palo Alto has initiated Office Hotelling, Incubation and accomplished strong Brand positioning,
2000 profitability will be significant (the second full year of independent operations).


Organization:

Management team in place.
Each Store has a small, maintenance-level staff which is expanding.
C Corporation is established - equity is divided between Principals and MG Taylor. A employee option plan is in place.
An outside board is being established.

Products and Services:

Marketplace for the Network Economy - virtual and physical - KnetWeb operations. Environment and support services for organizations (including MG Taylor Corporation). Equipment of the Network Economy - retail sales of knowledge worker tools.
Incubation services and environment for startup organizations.
ZoomTrax sessions and DesignShop events.
Offer MG Taylor and self-branded Work Shops.
NavCenter fulfillment.
Be a place (hub) for Patchwork events.
Hosting of ValueWeb member services and products.
Product display and demonstration, customer survey and feedback to manufactures.

2000 Goals:

Establish the KnOwhere look and Brand.
Start KnetWeb operations as support system of the Taylor ValueWeb.
Establish the full KnOwhere venue of products and services.
Establish KnOwhere As A Marketplace in the consumer’s eye.
Get a significantly increased level of community activities at each Store.
Establish a steady retail and AI WorkFurniture business - at a supportable scale. Introduce first KnOwhere Brand products: Red Wagon and Bean People, etc.
Enhance Palo Alto and Hilton Head Stores to look more complete for walk in trade. Establish KnOwhere "@" projects/products.
Develop CO-branding plan and list of potential partners.
Do second KnOwhere DesignShop with focus on creating Silicon Valley network participation.
Establish one major, operational “JV” venture with a major partner.

Financial Objectives:

Profit from operations $2,000,000.
Establish a $10,000,000 (annual revenue) run rate by year end.
Attract several million in investment.

 

 

Yolke Systems Purpose and Work:

Provide a Platform for the creation and use of smart/intelligent Agent-based systems. Provide the tool kit and network system of the Taylor processes and organizations.
Provide a network service organization in support of the overall Enterprise.
Provide the support system for KnetWeb and other similar products.
Provide an incubation environment and platform for Internet startups.

Present State:

One full time Principle.
30 plus year old basic ideas honed through 20 years of MG Taylor practices.
Several specific product concepts heading toward market convergence.
Built-in start up market with MG Taylor and KnOwhere.
The iterations Patent Pending covers several key, unique, software areas.

Organization:

C Corporation established equity divided between Principals and MG Taylor Business Units.
An outside board is forming.

Products and Services:

KnetWeb (to be operated by the KnOwhere Stores for the Taylor ValueWeb.
KnetWeb Builder to be sold and licensed to users.
A variety of ISP, network and server services retailed through the KnOwhere Stores. The Barista Platform providing server service and sold and licensed to users.
Consulting, facilitation, design and IP bundling for Internet start up for fee and equity. CyberConn Tool Kit (Java, client/server strategy).
Joint Venture Projects based on Agent/Agency design strategy and Patents.

2001 Goals:

Organize Corporation.
Establish Internet start up service package.
Basic Barista Platform finished.
Version. 1.0 of KnetWeb shipped to KnOwhere.
Organize Barista and CyberConn product iterations.
Develop product/service marketing concept plan.
Have a fundable Business Plan.

Financial Objectives:

Earn fee income for MG Taylor and KnOwhere infrastructure support and services. Establish Revenues for bundled services and IP in support of Internet startups. $600,000 run rate by year-end.

 


Synergy of Business Units

Business Unit Synergy and Interoperability Purpose and Work:

Insure that focus on the integration of process, tools and environment is maintained. Maintain cooperation and synergy between Business Units post spin-offs.
Create Enterprise architecture that provides investment opportunities wi/ exit strategies. Create a “market place” of Taylor Enterprises that encourages distributed ownership.  

Present State:

This role is performed on a ad-hoc basis by MG Taylor.

Organization:

Explicit ROE (rules of engagement) between all Business Units.
A consortium built around a Joint Venture agreement between Business Units.
Defined System Integrator role for MG Taylor with participation from each BU.
Board made up of representatives from each Business Unit.

Products and Services:

Information to the BUs, License holders, JV Partners and KnetWeb members.
Conflict resolution among ValueWeb members.
ROE defining participation in the “game.”

2001 Goals:

Be formally established and working well by year-end.
Implement basic Remote Collaboration method for members.

Financial Objectives:

Establish fee structure and Royalty method among all ValueWeb members.

iterations is not a Business Unit in the MG Taylor ValueWeb. It is a member of the Taylor ValueWeb on the level of the first “clam shell.” iterations is owned my Matt and Gail Taylor and Todd and jeff Johnston. It holds ownership of the basic Taylor IP in the form of Patents (pending), Copyrights, Trade Marks, etc.

It has Licensed MG Taylor to develop specific expressions of the IP in the form of specific products: certain workshops, DesignShops, PatchWorks Designs, NavCenters, WorkFurniture, ValueWeb Systems Integration, CyberConn I, and so on.

Particular expressions of the IP will be owned by each Business Unit - Design and functional Patents of the Foundation Series WorkFurniture by AI, specific code by Yolke Incoporated as example.

The relationship between iterations and the various Business Units is contractual - iterations has provided certain IP for a royalty from MG Taylor. Iterations has no ownership in any Business Units and exercises no control of them through board membership or other means.

As a ValueWeb member, however, iterations is interested in developing new IP to be developed by the Business Units and the ValueWeb at large.

 

CAMELOT Excursions, formed in 1988, is now a wholly-owned subsidiary of iterations.

CAMELOT is a member of the American Sail Training Association and is a Class D Tall Ship.

She is actually the registered home office address of iterations. Certain aspects of CAMELOT’S persona is usable by MG Taylor Corporation along with a year-to-year agreement for providing support to the MG Taylor Business Development Process.

CAMELOT has been used, since 1990, for MG Taylor one-on-one client meetings and as personal working-retreats for MG Taylor employees and associates. Starting in late 1999, she has been made available to ValueWeb members for a nominal fee - see Letters To CAMELOT.

 

Global IP & Brand Strategy

Global IP Strategy:

Patent issued. file follow on patents.
Design Patent - All Products, AI and KnOwhere items.
Trade Dress - Described, advertised, documented (affidavits), Compliance policy.
Trade Secrete - Manuals, disclosure letters.
Trade Mark - Complete list, distribute “how to use manual.”
Copyright - Use ROE, fee, statement on web sites.
Develop License compliance strategy.

Define License and Certification process - pricing, scale/scope/time definition.
Letter to License holders and IP violators - Post web page.
Guidance for License holders usage of IP and License.
Publish Manual 1.0 (MG Taylor Corporation).

Global BRAND Strategy:

Establish the Taylor persona - Largely through individual efforts, speaking, writing.
Position the MG Taylor House Mark as signifier of the global Brand.
Establish each Business Unit Brand and Mark with their product lines.
Secure Trade Marks, Logos on all products and services.
Position the Trade Dress with customers (related to each product/service).
Get Trade Dress and Brand elements in every environment (ours, Licensee and client). Create “virtual” Trade Dress elements to match physical Trade Dress.
Coordinate and integrate the various web pages.
Build pages around specific products/services.
Create many Internet Portals into our Enterprise.
Establish the “seal of fitness” (Group Genius Logo) as certification mark.
Start systematic press releases.
Publish - web and print.
Lever academic relationships.
Develop appropriate follow up program with License holders.
Integrate the portfolio of products/service, in families, through Modes 1, 2, 3, & 4. Integrate Marks and product/services:

Red Wagon, Bean People, Syntopical Reading groups, etc.

Offering solutions to specific customer problems. Make use of the KnOwhere Store environments to engage with the public - Build traffic, introduce the ValueWeb concept. Engage in effective Co-branding, Cosponsoring - this develops opportunities for shared presence and maximum use of Overhead investment.

 

General Comments:

We have been building this Enterprise for 22 years.

We have been through several cycles of the Stages of the Enterprise Model.

We are now at closure with our formation process.

After investigating several merger and acquisition opportunities, the strategy that has emerged is the “stay independent” course - even in a possible future acquisition, we will remain free to pursue our strategy (with a fully participating Partner, of course).

We will always have many options for merger or specific Business Units being acquired. In fact, these become stronger (we become more attractive) as we follow an independent pathway. To me, this is not the critical point. What is important is building our ValueWeb and structuring each relationship appropriately.

In any case, this strategy involves distributing our ownership and broadening our ValueWeb base by two orders of magnitute this year. It means bringing our full vision and invention to the creation of a new way of working and a new kind of market place. It is the course most consistent with our values.

To succeed, we have to continue our focus and spend resources on executing this Model/Plan. We also have to adapt it as we bring new partners into our ValueWeb.

We have to keep doing our day-to-day work and we have to do it in a way that implements this strategy.

And, we have to do something else: we have to promote our Enterprise the way we used to. It is time to be a much more active voice out in the world.

Throughout 2001, we are going to make great progress executing this strategy. We will be in a very different position when we do.

There are many ways to execute the plan - there is great opportunity for improvement and local variation. It will be changed where error is found. Not every element will be done perfectly - or on time.

However, this is not the beginning of a planning process - it is the end of a process that started in 1996 and has intensified over the last 18 months. It is important to realize that while our Enterprise started over 22 years ago we have been developing a business only in the last four and one-half years.

It will be better to accomplish a comprehensive strategy, partially, than a fragmented one - perfectly. It is better to do a great job with an imperfect solution than a too slow implantation of a “perfect” one.

We have accomplished a great deal in the last year. Our Business Units are organized and have achieved independent operational and financial status. We have strengthened our Brand and market position. Our IP is in excellent shape with a Patent about to issue. Financially, we continue to self-fund the Enterprise When you look at the array of products, services, IP and organizations we have created, this is an astounding accomplishment.

We have attracted serious partners and investors and this is most pleasing. It shows that we are being perceived as having organizational value and that we have the maturity to engage in long term enterprise building with major organizations.

As I revised this page, today (January 2001), it was interesting to see what had to be changed since May 28, 1999 - and what did not. What did not was the essential strategy - what did was the tense. Many of the “we must do” statements have given way to simple statements of present conditions.

This is the true measure of our progress as an Enterprise.

 

Matt Taylor
May 28, 1999
On CAMELOT

SolutionBox voice of this document:
ENGINEERING • STRATEGY • PRELIMINARY DESIGN


posted: May 28, 1999

revised: June 18, 2000
• 20000215.42852.mt • 20000218.42856.mt • 20000523.70447.mt

• 20000601.143216.mt •
20000618.20234.mt • 20010112.452891.mt •

Note: this document is 95% complete

Matt Taylor 650 814 1192

me@matttaylor.com

Copyright© Matt Taylor 1999, 2000

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