Open Source Principles - Web 2.0

"give your service away from free, possibly ad supported but maybe not, acquire a lot of customers very efficiently through word of mouth, referral networks, organic search marketing, etc., then offer premium added services or an enhanced version of your service to the customer base".... known as Collective User Value

"users self-select along multiple personal dimensions, categories of preference, utility, social interest, and experience. Pay-per-click, click-to-call, web analytics, and click streams making it easier to reach individual online clusters directly with targeted or complimentary offers"

I was just reviewed a couple of books on the success and future of web 2.0. What struck me is this represents an excellent example of an open source philosophy and business model.

What if you built a company around core accounts (customers) and suppliers using a similar model? Wouldn't this guarantee a superior offer when compared to competitors and couldn't you create an organization that is genetically the lowest cost producer?

The Open Source Corporation - 2

Scene Two

It is 10 years ago and I am doing productivity improvements at Delphi Automotive Systems working the rules of “lean manufacturing.” To most people in the business it represents one of the numerous variations on total quality management of Deming, Jarrand, and et.al. Ed Northern EVP of Manufacturing at Delphi had just arrived from General Electric and Jack Welch to deal with Delphi’s imminent separation from the General Motors family to operate independently as the world’s largest tier one supplier. The problem with lean at Delphi was the numerous in-house and outsourced suppliers in Canada, United States, and Mexico. The challenge: how to integrate geographically dispersed operations when half are not under your control!

Scene Three

It is 8 years ago and we are negotiating (our consulting business unit – Blanchard Solutions Group) a large, multiyear license of our intellectual property to the largest electrical contracting company in the United States. How do we price our multi-million dollar library? Can they customize it? And who owns it? How do we continuously improve the content and materials when the authors are resistant to change (and have a legitimate issue around quality and integrity of their brand) and unmovable when sharing royalties?

Scene Four

7 years ago at a fast growing bio-pharmaceutical company starts outsourcing non-core operations to keep it focused on FDA approvals and help the balance sheet by reducing overhead. We (I) become their outsourced Human Resource department. The net effect is we find it harder to affect strategy then when our relationship was as an external resource. They become more circumspect about sharing information or listening to ideas. BTW, we were hired for our expertise and track record for ensuring human resources is a key component of competitive advantage.

These situations are real and ongoing to those of us working as OD consultants, handled client to client, situation by situation. However, I was observing a pattern that was at first indiscernible and only revealed over time. The details brought into view the challenge of an outsourced yet integrated operation.

A business where a collection of businesses, each focused on respective core competence, fully integrated in an “open source” environment, providing incredible value by offering a complete and unique value proposition – high product quality, incredible buying and servicing experience, and at an industry-leading price.

Project 1440, the year Gutenberg created the printing press and revolutionized the value proposition for knowledge, is our guild of information>knowledge>insight providers seeking to change the consulting industry.

Interested?

The Open Source Corporation

I write this with much trepidation. Unlike the typical business book that tries to describe what is – mine is much more ambitious – what will be. I do not purport or practice any type of mysticism, a glance into the future. My claim is far more modest (and dangerous); after 30 years in the consulting business – my intuition has been right most times. I have forecasted in conversations with clients and colleagues the rational extension of current trends. We have all done this only to be disappointed by our own inaction – “I could have done that.”

The difference here is the lack of theory. Oh, I will support every idea and opinion with facts, but the book is not written for you; it is written for me and is the script for an essential component of our startup – the open source knowledge guild. I will relate the good, the bad, and the ugly as I build one of the first true open source corporation. I can only hope you learn as much as I do.

Scene One
The idea first came to me when reading a story on Linus Tovards – the kernel that grew the fruit known as Linux. I read his story of building software that openly shares the operating code and therefore it’s intellectual property. What a departure from the history of software development at Microsoft and Apple. Both organizations jealously guarded their “codex” to preserve intellectual property rights. Although Microsoft did share it with carefully selected partners, Apple did not and the outcome in this tightly controlled market is Microsoft 92 – Apple 8.

However, what Tovards was suggesting was radically different – intellectual property rights replaced by the public commons. The question I asked myself as a businessman and confirmed capitalist – how do they make money?