I've searched the forum and read all the related posts, but still felt it pertinent to make a new post with the specific information for my project.
I'm looking to create a mini demonstration of free-space optical communication using an arduino to send serial data to a laser diode, which will transmit to a receiver and do serial into another arduino.
I think the photodiode is there to check if the laser diode is working? It's interesting to me that they're in the same package, but we can disregard for this purpose, we'll only be using the laser diode.
The purpose of the photodiode - as I understand it - is to measure the output of the laser, and to adjust the current based on that (how that works or how you design the circuit, I don't know).
Run the Vo from the circuit into input of a comparator - connect the other input to a variable DC source (trimpot between +5 & Gnd).
Then you adjust the trimpot to where Vo trips the comparator and flips the output from 0 to 5V, or 5V to 0, depending on what you have connected where; Vo on + > then trimpot on -, output goes high. Vo on - > trimpot on +, output goes low.