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| =Discussion of Open Business characteristics=
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| ==Open Business==
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| Definition by Openbusiness.cc
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| http://www.openbusiness.cc/2006/06/05/what-is-an-openbusiness-part-ii/
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| A recent thread on OpenBusiness.cc sought to identify characteristics which merit or disqualify a business from being 'open'. The following positive indicators summarise parts of the discussion. Among other dimensions the main concern appears to be:
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| Should our definition of "Openness" include a normative dimension?
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| If "Openness" is essentially a smart strategy to make profits whilst enabling users to share content, yet does not allow them to make derivatives, is this a boundary which should apply?
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| It may be important to remember what Richard Stallman, the father of free software, notes in this regard: "While free software by any other name would give you the same freedom, it makes a big difference which name we use: different words convey different ideas". He is right and opposed the term Open Source software, because he wanted to make a normative point. Free software is associated with the freedom to tinker, adapt and build upon, not with giving away product for gratis. In this sense "Free business" might have been the better term for describing a trend, which leads to more open business practises. But we do not seek a definitive definition for what Open Business is, rather we are seeking to find common characteristics of what an OpenBusiness is, as delineated from traditional business structures, norms and conventions.
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| '''Practices 'libre' / 'copyleft' notions of IP'''
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| Typically this dimension implies a business that uses Creative Commons licenses to distribute their digital works or a comparable spirit in its firm's dealings, particularly in its licensing practices. It's a matter of contributing to the commons or public domain by avoiding private appropriation. There are many conceptions of what it means to be 'libre', electing not to restrict distribution of your digital works being a low standard, whilst many argue derivations must be permitted.
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| To which aspects of a business can these notions be applied? The concept of 'code' now extends from its original software context to the materials and resources underlying a creative project. For example in a musical context, code entails multi-track recordings, 'parts' or samples, perhaps even details of the specific artists and recordings which influenced a product. How the notion of code can be extended in this regard is an especially interesting topic on which contributions and examples are needed.
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| In this regard, a further distinction deserves more thought. Whilst it is fairly simple to designate outputs as open, it is also possible to pursue open notions to your production processes or inputs. For example, a business might focus on works resulting from collaboration or decentralised production, or it might encourage derivations from CC-licensed works.
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| '''Sharing content and services i.e. giving something away gratis'''
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| By giving something away for free, a business can develop extensive networks, communities and platforms which can then generate opportunities to create revenue. Precisely what a business has to share is a function of its particular business model. For example, record labels (e.g. Beatpick, Loca) can facilitate the sharing of their recordings whilst charging for higher quality versions, whilst web 2.0 services such as Flickr offer free platforms for sharing of pictures.
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| There is however, given its capacity for generating revenue, a potentially cynical and profiteering aspect to this approach to sharing. For example, criticism has recently been levelled at MySpace for its submission to Rupert Murdoch, and subsequent revision of its conditions of usage.
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| '''Progressive governance and organisational structures'''
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| It may be possible to share the code underlying a business, meaning the intricacies of administering a sustainable business. This might involve writing and publishing a logistics guidebook, covering a range of simple and generic organisational practices, or perhaps even detailed examples on how to structure deals or agreements with media partners, suppliers and clients. Publishing and sharing this aspect of code is heretical in the culture of 'industry secrets', yet it is very appealing to those accustomed to the principles of free-software.
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| Also, open can indicate that the business itself has been created cooperatively and owned collectively, as opposed to the more traditional private/public ownership structures. Workers are greatly incentivised by having a higher stake in a concern, in part from feelings of responsibility and opportunity, but also from the likelihood of higher remuneration. A business can be more open still if it is owned by its members / users, managed by its stakeholders and develops entirely transparent accounting procedures.
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| "A business that does not use copyright or patents to privatise intellectual contributions, but leaves it in the public domain, while building a service model around it. An open business model uses and enriches the Commons, focusing on the monetisation of the services."
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| "I consider a company which depends on secrets to be less open than one which relies on patents, which is in turn less open than one that relies on neither."
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| "'Open Businesses' create value for people and companies without slowing down economic or cultural flow with unnecessary fences. Rather than locking customers into a gated world, Open Businesses put the customer at the centre of their value proposition, collaborating with competitors to use standards to improve customer's actual experience."
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| "Open Business is really a return to business or commerce fundamentals."
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| ==Olivier Malnuit's Ten principles==
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| This is from a commentary by Dale Carrico, which are interspersed with the original text, but it is a stimulating read:
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| ""Olivier Malnuit recently drew up the liberal communist's ten commandments in the French magazine Technikart:
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| 1. You shall give everything away free (free access, no copyright); just charge for the additional services, which will make you rich."
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| How are "additional services" construed here? Bruce Sterling writes in Tomorrow Now about how "free services" induct one into ongoing relationships with service-providers who constantly "update" the basic service to maintain a profitable relationship. Here, Sterling and Zizek are making complementary points. But what if we conjoin these universal access, creative commons/a2k ("access to knowledge") moves with collaborative service provision and updating, and throw in a robust "no logo" disdain of corporatism? If we then struggle to subsidize this information regime through basic income guarantees (my "pay to peer" argument) and go on to supplement these moves with a programmatic struggle for global universal education and healthcare, then it is hard to see how this technoprogressive/technoliberationist politics doesn't amount to a real left politics rather than the neoliberal/left-libertopian "liberal communism" Zizek properly derides -- through Malnuit -- here.
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| "2. You shall change the world, not just sell things.
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| "3. You shall be sharing, aware of social responsibility.
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| "4. You shall be creative: focus on design, new technologies and science."
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| Yes, it is very easy to hear Jennifer Saunder's Edwina Monsoon, the New Age libertopian hedonist monster of BBC's enduringly hilarious AbFab series as the voice giving the lie to these self-congratulatory corporatist fantasies. By the way, I think enterprise and commerce that is genuinely defined by these attitudes actually can do real good in the world. It just isn't and cannot ever be enough. How do we do justice to such intuitions without drifting into the neoliberal corporate-militarist accomodationism Zizek disdains here?
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| "5. You shall tell all: have no secrets, endorse and practise the cult of transparency and the free flow of information; all humanity should collaborate and interact."
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| Well, I am a strong believer in transparency as the price of authority -- transparency should be the price you pay when you benefit from things like tenure, limited liability, and legitimate monopolies on the use of force. I don't believe "transparency" is necessarily the best metaphor to express what is afoot in these demands, and I think it is an especially pernicious thing to demand of individual citizens, especially when the real threats to personal privacy are never the exposure of information but the control of interpretations. But for more on that I recommend people read my critiques of the cypherpunks and of David Brin in chapters Two and Three of my dissertation, Pancryptics (which I am editing into a book right now -- comments and criticisms are very welcome).
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| "6. You shall not work: have no fixed 9 to 5 job, but engage in smart, dynamic, flexible communication."
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| All this in an era when human trafficking is on the rise and millions are starving to death and paralyzed by treatable diseases in the midst of the greatest affluence in the history of the world. Yes, it is hard to stomach these cheerful declamations at times.
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| "7. You shall return to school: engage in permanent education."
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| Make this injunction universal and I'm for it. And, honestly, it is hard for me to see how one could practically implement such an injuction without supporting some of the cheap green laptop and p2p/a2k politics that Zizek is likely to disdain as "liberal communism" here. What is wanted here is more of the recognition that what is politically indispensable can still be politically inadequate. Else, Zizek's radicalism threatens to underwrite impractical violence and then cynicism and passivity. No doubt, this is pretty close to what an accommodationist would say in this moment and so just how does one get past this impasse?
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| "8. You shall act as an enzyme: work not only for the market, but trigger new forms of social collaboration."
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| Of course, the whole point is that far fewer people would care to work for profit on the market at all if the satisfactions of creative work, social support, and self-creation outside the market order in its present terms did not practically guarantee annihilation.
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| "9. You shall die poor: return your wealth to those who need it, since you have more than you can ever spend."
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| Zizek is right to deride this sort of straightforward patronizing aristocratic self-congratulation.
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| "10. You shall be the state: companies should be in partnership with the state."
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| (http://amormundi.blogspot.com/2006/04/zizek-on-tech-bloom.html)
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Open business = a business that operates around the principles that are similar to those of the free software and open source movements, i.e. with 'free' and 'open' content.
There is also a website and weblog of the same name, monitoring developments in this area. See below.
Open Business Models and Strategies
From the OpenBusiness Guide 1.0 at
http://wiki.icommons.org/index.php/The_OpenBusiness_Guide
Make the original cheaper than a copy
How can you make an original that is cheaper than a copy in an environment where content can be copied and distributed at practically zero cost? The answer lies in minimising transaction costs.
A good example of this is eMusic, which charges as little as 12p per song downloaded to mitigate against the risk of wasting time downloading poor quality music, as well as facing litigation from rights owners, by using illicit peer to peer filesharing clients. You might save money downloading music from such sites, but as Steve Jobs remarked at the launch of the iTunes store, “you’re working for under minimum wage.”
In the print industry, the print form of a novel is still much more convenient in many contexts than is the digital form. There are a range of environments, from the bath to the bus, where consumers would prefer their novel in book form, and will pay for the privilege.
Sell physical complements
Bands who develop a fan base by giving away their music online can rely on this fan base to consume physical compliments to their music, by attending gigs or purchasing products such as T-shirts, caps and badges.
Sell information complements
In open source software products, such as Red Hat Linux, are given away, and then support contracts are sold on the strength of the free product. A type of “support contract” for music might be specially packaged forms of the music, already generated by the artists during the production stages, where the different recording tracks have been separated out to allow users to remix the song.
In the same way, an academic, consultant or journalist distributing their writing free online could successfully charge for specific consultancy work based on the popularity or reach of their work. Developing ones reputation for free is a good strategy to create derivative revenue streams.
Subscriptions
The disadvantages of hiding content behind subscription barriers have already been discussed. However, this does not preclude the content producers from allowing access to special features associated with the content to paying subscribers. Slashdot, for example, gives subscribers access to their posts half an hour before they are posted to all readers, enabling subscribers to be first in line to comment on a particular post. Increasingly adaptations to old revenue models can be found where more is available for free, but revenue comes from parallel revenue streams, which are only available to paying customers. The difference being they increasingly are not paying for what used to be the main product, but for ancillary higher value services.
Offer a personalised version
Personalising content, using customer relations management software such as that employed at Amazon, can help users navigate your content by reminding them what they have and haven’t seen, as well as recommending they look at something based on what other users with similar profiles have enjoyed looking at.
Advertise yourself
As discussed, gaining exposure on the network is increased by giving away your content for free. This is a key strategy for artists seeking their audience.
Advertise other things
Though this seems to be the answer for nearly every web 2.0 entrepreneur it works for many. Once your content has enough attention focussed on it, you are in a position to sell advertising space. Advertising revenues are increasingly being diverted from print media towards the online sphere, and this trend can only continue. Plus, with Google Small Ads, there is a wider market for content producers to source advertising revenue. It will be interesting to watch what innovative forms 'selling attention' will take.
Monitoring
Collecting societies traditionally collect royalties for their members, and are moving into the online sphere. For example, Last FM, whilst offering recommendations and short previews of music, also offers personal radio stations, which play users music according to their music profile. Last FM pays the MCPS-PRS fees like any other radio station, and revenue from this is in turn distributed to rightsholders.
Selling content
If you are releasing your content online using a Creative Commons licence, then you still maintain the right to profit from your own work. And developing a fan base through freeing your content to a network of fans will make you a more attractive proposition to record labels and publishing houses.
Pure public provision
Public funding, either as seed funding or start-up funding might play a significant role in some online ventures, and funding from your own public, through mechanisms such as Paypal, could provide significant revenues.
Prizes, awards and commissions
Patronage in the form of prizes and awards as well as specific commissions, should also be considered as a source of revenue.
Where the first round of commercial web development focused on online services and e-commerce, the new Web focuses on sociality. People are at the core of the new Web -- contributing content, ordering it, and making connections amongst each other. Web 2.0 companies are merely 'containers' for their social activity: mediators, facilitators and meeting places. Such companies add value to users’ data by aggregating it, analysing it, funnelling the value of users’ collective intelligence back to the user."
(http://wiki.icommons.org/index.php/The_OpenBusiness_Guide)
More Information
Case studies are listed in the Open Business Guide at
http://wiki.icommons.org/index.php/The_OpenBusiness_Guide; and here at
http://www.openrightsgroup.org/creativebusiness/index.php/Research_Areas
See the related items on Open Music Business Models and Open Film Business Models
Please check our directory of P2P Business Concepts [1] and our directory of P2P Companies [2].
Some related Delicious Tags to monitor developments:
The Open Business site and weblog
URL = http://openbusiness.cc/
Information on the Open Business site
"Creative Commons England/Wales board-member Christian Ahlert has just launched OpenBusiness. This is the result of an intensive research project into "open" business-models that don't rely on overbroad copyright/patent/trademark rights or are based on free/open source software and open content under Creative Commons licenses. It consists of case-studies aimed at entrepreneurs and funders who are trying to get their heads around what the characteristics of a successful open business are."
(from cory doctorow at boing boing)
"The two main aims of the openBusiness project are to build an online resource of innovative business models and to publish this resource in hardcopy as The openBusiness Guide. This website has been designed to gather business models from around the world.
Editorial Process: Using this website, openBusiness is gathering business models and collating community comments and suggestions to create a comprehensive resource that supports both new and existing open business ideas. Before becoming a part of The Guide, an idea is first published as a model. This starts with a member of the OB community submitting a model, which is immediately published onto the site. Once a model is published the process of peer review begins. All members of the openBusiness site are invited to comment on the models. The discussion that members generate will produce ideas, strategies and revisions which will assist the author to further develop or fine-tune their own business. After this process of peer review the model will be transferred into The openBusiness Guide. The Guide is a wiki, meaning that every user is able to contribute to the guide and correct mistakes or omissions. The collection of models on the website will serve as the main source for content in The openBusiness Guide."