 There
is as yet no consistent definition of Open Source Business. I've used
the criteria for 'Open Source' from wikipedia to come up with this
definition:
A radically transparent
organization which (a) operates through open collaborative partnerships
with customers, employees, suppliers, and the communities in which it
does business, (b) shares its sources of information, designs,
specifications and processes with them, and (c) allows open
participation in and makes public all decisions it makes, all operating
information, and all documents it produces, on a creative commons basis.
I
think most businesses would be inclined to like the "open collaborative
partnerships" part but be less enthusiastic about the "radically
transparent" part. How can you have competitive advantage if your
competitors have access to everything you do? But if you have a true
and open partnership, that entails transparency, and you can't have
transparency that stops at the competitors' door. It seems to me it's
all or nothing.
So the real question is whether a radically
transparent business can make money. In order for a competitor to
exploit an Open Source Business, it needs to do more than just have
access to all its information, it needs to operationalize
that information. That takes time, money, equipment and supplies, and
some expertise. How much of an entrance barrier are those things? To a
small business, they're substantial, but for a large, multi-national
corporation, not so much. But the large corporation will only be
interested if there's volume and profit in it. So the Open Source
Business (OSB) can choose to do something small and unscalable, or to
make very little profit, and thus keep the competitors at bay.
For
that reason, I suspect that OSB isn't for those who aspire to be
millionaires. But suppose the objective of your business isn't to make
a profit, but to make a living. The OSB might work just fine.
By
making a living, I mean getting what you want out of the business. Joy.
Personal satisfaction. Enough money to keep you going. Whatever it is
that does it for you. That's what Natural Enterprise
is all about. But it's not the way most businesses today operate. A
business that operates not for profit, but for the satisfaction of its
workers, as they define it,
is an anomaly in the market economy, a vehicle of the Gift Economy.
Such enterprises probably cannot be hierarchical or large -- this would
make them unmanageable. But there is no reason that a successful OSB in
one community couldn't be a model
for dozens, or thousands, of similar OSBs offering similar products or
services in other communities. Replication rather than growth.
I've
stated before my belief that because Open Source allows the simple and
complete transfer of bits for no incremental cost, software and content
will inevitably become free as Open Source gains acceptance and as
technology makes their protection impossible. Companies that make money
from software and from content (including books, music, news, and
videos) will have to find innovative new ways to generate revenue --
such as getting into hardware businesses as well (consumers are willing
to pay a lot for an iPod but next to nothing for the ephemeral content
it plays), and by offering customized services (like the bands and
writers who are giving their CDs and books away to promote their
concerts and consulting services).
So suppose you have an idea
for a new medical device that images and diagnoses problems with your
musculoskeletal system and then performs therapy on the problem areas.
As an OSB you would collaborate with medical device manufacturers, with
business advisers, with physiotherapists and doctors, and with
patients, among others, sharing all knowledge, research, designs,
methodologies and surveys under creative commons licenses (so big
competitors cannot patent them before you can get up and running). Your
business will probably make its money selling the devices themselves
and offering the training and services in using them. You won't make
money on licensing the design, hardware configuration or software of
the devices, since these would be Open Source developments available to
anyone. You will not make a lot of money on each device, to keep the
price level below that which would attract larger corporations to enter
the market. But you'll make enough to keep the business going and
healthy, and enough to allow the device to improve with the collective
information from all the partners who will be testing and using it.
Those partners will be your free, viral, marketing arm, so no
advertising and promotion costs will be needed. Other OSBs will
probably spring up selling similar units into markets you don't have
the resources to cover. But that's fine. Most of the investment will
have been gifts of time from a wide variety of interested and
knowledgeable people, and you'll have done well enough aggregating that
knowledge into a successful little business. And customers will receive
the benefits of your OSB's work at a much lower price than would have
been the case if it had been developed by a public corporation which
spent a fortune on promotion and whose shareholders demanded a high
ROI. And arguably the product will continue to evolve and improve more
quickly than if it were 'owned' by a big company with a high investment
in last year's model and hence an aversion to further innovation.
Next
week, in Part Two on this subject, I'll take a look at which industries
would seem to offer the best niches for OSBs, and describe some ways
that existing organizations might be able to make the bold transition
to OSB form.
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11:22:50 PM 
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MADE IN CANADA
trust your
instincts 
