More and more value comes in the form of open products. We have grown accustomed with open communities creating open soft-and hardware. Most of these communities are based on gift economies, i.e. the creators of these open products are not rewarded in a tangible way for their contributions. The classic examples are GNU-Linux and Wikipedia. Recently, we've seen an emergence of different models that brake away from the gift economy, directly rewarding those who invest (time, financial capital, social capital, ...) in open projects.
The first step in this direction can be illustrated by Open Source Ecology. The products they design are entirely open, but they are not for sale. The Open Source Ecology community is not interested in the market economy, their products target DIY communities. Their revenue model is based on donations.
Open crowdsourcing is a model in which the (open) community of designers are NOT rewarded in proportion to their contributions, in a tangible manner. The organizations who commercialize these products don't share the profits with the individuals who help design them. They could be given some symbolic gifts, which don't reflect the entire value added to the product. Arduino is one example of such model, a hybrid between the open (value) network and classical business.
There are also closed and non-transparent crowdsourcing initiatives in which only a very few participants are rewarded. Contributors are placed in competition against each other. The resultant products are closed and remain under the control of the initiator. We are definitely against this new form of human exploitation, as you can see in this post.
SENSORICA is based on a more radical model (referred to as an open and decentralized value network) leaning towards commons-based peer design and production. It is in fact a mix between a gift economy and a transaction-based, or market economy. SENSORICA produces products to be exchanges on the market against other assets, i.e. is selling products. All revenue generated is redistributed to all contributors in proportion to their contributions, based on a value equation, which is at the heart of the value accounting system.
You can find other models on p2p foundation and openp2pdesign.
This shift in the way we create solutions to our problems and distribute them is known as the transition from the present-old economy to the new economy, to a p2p economy. This is in fact the economic side of the multitude constructive revolution.
The open product emerges because the new digital technology makes possible large scale cooperative design and production, and because it renders these modes of design and production more effective and efficient. The open product is economically viable, it costs less to design, to produce, and to use/consume. It offers more value than the closed product.
One of the problems we need to solve during this transition is to design a strategy to play the open game. How can we make sure that those who invest in open products (time, materials, cash...) get rewarded in proportion to their contributions? How can we make sure that one can feed his family from his participation in the design, production and distribution of open products. Designing, producing and distributing open products in a sustainable way is what we call the open game. Here are some objections we hear often:
- if the product is successful it will be copied by others
- if the knowledge behind the product is shared openly people will make the product themselves
- ...
Playing the open game is not just about releasing all the information and knowledge about the product. The entity designing, producing and distributing open products MUST create a COMPLEX value proposition that cannot be easily replicated, and MUST be able to deliver fast.
Open value networks are very well positioned to do precisely that. The complex value proposition is... complex, and has many dimensions.
First, we need to realize that games require rules. A lot of efforts have been spent on drafting licenses for open products (see example from p2p foundation). But most of these licenses are, in some sense, as good as patents, i.e. as good as YOU can defend them.
The Creative Commons attribution-share alike license is a spacial case, and can be considered as one of the most important tool in the open game. It has this property of transmission:
"Share Alike — If you alter, transform, or build upon this work, you may distribute the resulting work only under the same or similar license to this one."This meas that the creator of the open product released under this license has the right to use the future work of anyone else who builds on the original open product. In other words, if I design X and someone else takes it and makes XY, this someone cannot close (or patent) XY, and I have the right to take XY and make XYZ, without the need to ask permission. If this someone is not happy about it he can bring me to court, and I can demonstrate that X, which was originally licensed as CC BY-SA is part of XY, and part of XYZ. From my own perspective, this is not a defensive game. I don't have to protect my work. I build on someone else's work who built on my original work without permission, and I defend my right to do so only if this someone decides to take offensive action against me.
Moreover, the CC BY-SA license sets up a win-win game, because everyone can build on everyone else's work. The most creative and hard-working have an advantage. Note that everyone has commercial rights.
Another factor that naturally plays in the favor of the creators of open products are the differences between the corporate culture and the open culture.
Corporations are still very little interested in open products, because their model relies on control. They need a monopoly, they favor patents to secure their markets, and they go to a great extent to defend their territory. Moreover, investors aren't ready to take risks on open products, which forces entrepreneurs in need for funding to close their technologies. Most corporations still prefer to develop closed products, but here and there we see them testing the waters of openness. So there is a real risk that a large company makes use of an open product (developed by an open community) and leverages its market penetration to capture a large portion of the rewards normally/ethically destined for the developers of the initial open product.
On the production side, the consumer must be given great freedom to customize the product, by transferring some manufacturing processes to him. The emergence of 3D printing and CNC go in that direction. The product should be centered around the core technology and the consumer should be allowed to design and do the rest, if he wants and if he can. Think about IKEA-type products, which are modular and easy to assemble. Add to that the ability to modify and 3D-print non-functional parts of the product (like the casing, handles, etc). This puts some constraints on design; it needs to get smarter. See telemanufacturing on SENSORICA.
Open products are also modular can be easily updated, they are NOT programmed for obsolescence or made difficult to modify. This makes them incompatible with closed products (designed with control in mind). In other words, open and modular products cannot be simply copied by classical business organizations, which design on a very different philosophy.
The service needs to be transparent, to allow the consumer to follow the process and to intervene at critical moments. See the draft of SENSORICA service system.
But we also need to realize that playing the open game is about efficiency and effectiveness. There are no built-in protective mechanisms. This game favors innovative and hard working individuals and organizations. It's all about making valuable things happen at the right moment. That requires fast innovation (not just generating ideas, but valuable and marketable product-ideas), capacity of production and distribution, ability to provide assistance and other services, etc. In other words, this is NOT a game for one guy in a basement. This game can only be played by an organization that comprises all that potential. This is a game that is played at a large scale, which requires a new type of organization, based on a new kind of infrastructure. The value network model seems to be the most promising one.
The value network model is designed to sustain an open, decentralized and adaptable type of organization that can fulfill all the above conditions. We believe that this type of organization, taking into consideration its infrastructure, is hyper-innovative, can offer a shorter product cycle, and can sustain a very complex, diverse and dynamic ecosystem of products. Early adopters and devoted customers are not only invited to give feedback for further innovation and design (like in the case of Sparkfun and Arduino), they are actually invited to be part of the value network and to share revenue. Suppliers also have the possibility to integrate the value network, i.e. to go beyond the simple supplier-customer relation, a relation of exchange of tangibles. The value network grows by affiliation and is able to rapidly integrate new capacity and to deploy it in a dynamic manner.
The open game is a fast game...
more to come...
By t!b!
Corporations are still very little interested in open products, because their model relies on control. They need a monopoly, they favor patents to secure their markets, and they go to a great extent to defend their territory. Moreover, investors aren't ready to take risks on open products, which forces entrepreneurs in need for funding to close their technologies. Most corporations still prefer to develop closed products, but here and there we see them testing the waters of openness. So there is a real risk that a large company makes use of an open product (developed by an open community) and leverages its market penetration to capture a large portion of the rewards normally/ethically destined for the developers of the initial open product.
[I suppose we all agree that we should reward creators and hard-working man and woman who take risks to improve our lives. Some hard-core open-minded individuals claim that we should phase out money and run the entire world on a gift economy. I am all for alternative open and transparent currencies, but I believe that the previous proposition, "running the world on a gift economy" is nonsense. In my opinion, a pure gift economy can't deal effectively with free riders and with vandals.]On the product side, the offer must be ethical and ecological. Openness and transparency can be leveraged here because nothing can be hidden, and consumers will have confidence. The product must be perpetual, i.e. not planned for obsolescence (see SENSORICA product design philosophy). Bugs cannot be hidden for long in open products. Perpetual products are appealing because they are ecological (they are not replaced as often as closed products) and offer back-compatibility. They also engender a long-term relationship with the consumer, which is an economic advantage for the producer. Note that a perpetual product is a modular product that can be updated regularly, by changing different modules. A PC (personal computer) comes close to this definition. Furthermore, open products are lower-cost because they reuse and remix other open technologies.
The offer must generate network effects. We are talking here about an ecosystem of modular, interoperable and complementary products. These products will reinforce each other.
On the production side, the consumer must be given great freedom to customize the product, by transferring some manufacturing processes to him. The emergence of 3D printing and CNC go in that direction. The product should be centered around the core technology and the consumer should be allowed to design and do the rest, if he wants and if he can. Think about IKEA-type products, which are modular and easy to assemble. Add to that the ability to modify and 3D-print non-functional parts of the product (like the casing, handles, etc). This puts some constraints on design; it needs to get smarter. See telemanufacturing on SENSORICA.
Open products are also modular can be easily updated, they are NOT programmed for obsolescence or made difficult to modify. This makes them incompatible with closed products (designed with control in mind). In other words, open and modular products cannot be simply copied by classical business organizations, which design on a very different philosophy.
The service needs to be transparent, to allow the consumer to follow the process and to intervene at critical moments. See the draft of SENSORICA service system.
But we also need to realize that playing the open game is about efficiency and effectiveness. There are no built-in protective mechanisms. This game favors innovative and hard working individuals and organizations. It's all about making valuable things happen at the right moment. That requires fast innovation (not just generating ideas, but valuable and marketable product-ideas), capacity of production and distribution, ability to provide assistance and other services, etc. In other words, this is NOT a game for one guy in a basement. This game can only be played by an organization that comprises all that potential. This is a game that is played at a large scale, which requires a new type of organization, based on a new kind of infrastructure. The value network model seems to be the most promising one.
The value network model is designed to sustain an open, decentralized and adaptable type of organization that can fulfill all the above conditions. We believe that this type of organization, taking into consideration its infrastructure, is hyper-innovative, can offer a shorter product cycle, and can sustain a very complex, diverse and dynamic ecosystem of products. Early adopters and devoted customers are not only invited to give feedback for further innovation and design (like in the case of Sparkfun and Arduino), they are actually invited to be part of the value network and to share revenue. Suppliers also have the possibility to integrate the value network, i.e. to go beyond the simple supplier-customer relation, a relation of exchange of tangibles. The value network grows by affiliation and is able to rapidly integrate new capacity and to deploy it in a dynamic manner.
The open game is a fast game...
more to come...
By t!b!
By AllOfUs
Hey Tiberius,
ReplyDeleteI've been working on similar ideas. In relation to defining the rules of the game, I've been thinking of it as creating a cell culture. In a petri dish you should create some conditions that you think will promote the growth of your cells in a certain way. I think you can and should share your medium recipe. Yes, others will copy it but their medium would not be the same because it is very likely that they will not agree with your plan 100%. I think that in the open game, the more people "copy" your idea, the more options are available and the quicker you reach a viable solution. To me, it sounds like a collaborative prototyping effort.
I'm working on a proposal to the local Aboriginal peoples where I live because I want 1) to test what I am sharing here with you but 2) and very important, I think the indigenous cultures of the world can teach us how to live without depending on money, how they create value and how they exchange it and of course, the relationships that come out of that. But I assume they do it because they know how to. My idea is to bridge the two worlds by being able to create business models of a (mostly) cashless community, in other words, identify culture mediums.
Will let you know if you're interested.
Thanks for your comment Tatiana. I'll revisit my text, because your first paragraph makes me think that I can be misinterpreted. I am all for sharing openly and I encourage others to copy and remix everything made within what I call an "open value network". If this is done in the same spirit everything is fine, because it can go in both all directions. This is how science advances, scientists influencing each others back and forth. But this is NOT always done in the same spirit.
DeleteSo the problem is how to make sure that those who participate in the creation of open products get rewarded for their work, in the present (mixed) AND future (hopefully open) economy. How can we make sure that the openness doesn't lead to the exhaustion of creators of open products? How can we make sure that one can provide for an entire family while building open products? How can we build a sustainable open and p2p economy, an environment in which one doesn't need to work for a corporation to survive and do open projects during free time.
I like cashless communities. I've experienced something like this when I was younger in my mom's village. It feels good, but unfortunately I don't think it can be scaled beyond the Dunbar's number. I think there are informal currencies operating in these types of communities to account no only for simple exchanges (chickens against milk), but also for complex exchanges of intangibles. Everyone in the village is an accountant and can tell you more or less accurately if someone is taking advantage of someone else or if someone is giving a lot more than he takes back. I am for a basket of different types of currencies that map different types of values, and can better represent the complexity of humans as socio-economic agents (without diminishing other important dimensions).
Dear Tatiana
DeleteYou wrote: "I think the indigenous cultures of the world can teach us how to live without depending on money, how they create value and how they exchange it and of course, the relationships that come out of that".
Let me whole-heartedly support that statement. In Sub-Saharan Africa there is an essentially common traditional philosophy that runs through almost all indigenous cultures. It goes by different names in different places. In South Africa's traditional Zulu and Xhosa cultures it is known as UBUNTU.
In essence it says ... “I am because WE are”.
Your pain is my pain, your prosperity is my prosperity, your salvation is my salvation.
It sets out to build and maintain a true sense of ‘community’ through compassion, reciprocity, dignity, harmony, and humanity. Through mutual-support and a positive outlook we overcome hardship and misery together.
UBUNTU asks us to think of the individual not as a solitary, self-sufficient entity who exists independent to the rest of society ... but rather as individual human beings in RELATION to the rest of creation. UBUNTU considers our interconnectedness, our common humanity and our shared wisdom and know-how.
The Cartesian conception of individuality fails to acknowledge this, and instead exaggerates the solitary aspects of human existence while largely ignoring the relationship aspects.
Collectivism makes the same mistake, only on a larger scale. For the collectivist, society is nothing but a collection of separately existing, detached individuals (Dirk, 1998).
Ubuntu is neither collectivist (socialist/communist) nor individualist (capitalist). Instead it is COLLABORATIONIST, relying on a flexible group of people working together towards a shared goal and for their common good. The focus shifts from solitary to solidarity, from independence to interdependence and from individuality vis-à-vis community to individuality à la community (Dirk, 1998).
UBUNTU encourages participation and sets out to build consensus and a common vision accepted by all who are involved.
A blueprint surely for the New Economy?