Category:Business

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Light beats heavy. Open beats closed. Free beats paid. Good beats evil.

- Umair Haque [1]


No matter who you are, most of the smartest people work for someone else.

- Bill Joy [2]


This section collates material related to peer production, P2P Business developments, and P2P Economics issues.


* Micro-economically:

Externally, the business world is engaging/moving towards an adaptation to productive communities, while productive communities are building their own Phyles

Internally, businesses are starting to engage in Social Business Design, by moving from Systems of Record to Systems of Engagement.


* Macro-economically:

We are moving towards Open Business Models, and a commons-oriented global economy. Profit-Maximisation can no longer be contained by pure external state regulation, but needs new forms, that embed the profit function into higher ethical requirements, that are embedded in the very corporate structures, while at the same time, new economic forms are created directly by autonomous productive communities, so that they can maintain their independence.

More here, in our new special section on Economics


Contents

Our P2P Business Network


Vernaallee.jpg Adamarvidsson.jpg Brunsaxel.jpg TiaCarr.bin.jpg Sam Rose.jpg Georg Pleger.jpg
Verna Allee Adam Arvidsson Axel Bruns Tia Carr Sam Rose Georg Pleger
verna.allee AT valuenetworks DOT com adam DOT arvidsson@unimi.it snurb (at) snurb.info tiacarrwilliams@gmail.com samuel dot rose at gmail dot com georg at pleger dot at
Coop.jpg Marcin Jakubowski.jpg Michel Bauwens.jpg Marc dangeard-medium.jpg
Matt Cooperrider Marcin Jakubowski Michel Bauwens Marc Dangeard
mattcooperrider at gmail dot com joseph dot dolittle at gmail dot com michelsub2004 at gmail dot com marc at dangeard dot com


Introduction and Visualization

Recommended reading:

Typology:

The business cycle for the material economy [3]:

  1. Incubation: Where do the basic "raw materials" come from?
  2. Production: How are goods and services produced?
  3. Exchange: How do goods and services move from production to use?
  4. Distribution: How is the consumption and use of goods and services organized?
  5. Allocation: How is surplus generated in the economic cycle used? How does surplus re-enter and reinvigorate the cycle?


Articles:

  1. Michel Bauwens: An Introduction to Open Business Models. OSBR, April 2008
  2. Laurel Papworth: Social Media Business Models, outlines 22 revenue streams in 4 quadrants, with "member to member" corresponding to "peer to peer"
  3. Internet Business Models: typology by Michael Rappa.

Also:

  1. How Low Participation Costs make Peer Production Inevitable
  2. Markets are inefficient for non-rival goods. Josh Farley
  3. In peer production, the interests of capitalists and entrepreneurs are no longer aligned
  4. Can peer production make washing machines?. Graham Seaman.

Please note that the issue of physical peer production or "open design communities for physical production" is monitored separately in this section

For inspiration: Principles of Ethical Social Entreprises (Franco Papeschi & Tory Dunn)

What we Know about Open/Free and Commons-Based Business Models

  1. Business Models for the Commons ; Business Models to Support Content Commons
  2. Open Business Models ; Open Business
  3. Open Film Business Models ; Open Music Business Models
  4. Free Software Business Models ; Open Source Business Models; Open Source Software Business Models
  5. Free Business Models
  6. Open Source Hardware Business Models ; Open Hardware Business Models

More here, in our new section on Open Business Models


Key Initiatives

  1. Corporation 20/20: What would a corporation look like that was designed to seamlessly integrate both social and financial purpose? Corporation 20/20 is a new multi-stakeholder initiative that seeks to answer this question. Its goal is to develop and disseminate corporate designs where social purpose moves from the periphery.
  2. JAS Economics: principles for grassroots economics


Comparative Table: The Logic of the Market versus the Logic of the Commons

Market Commons
Focus

What can I sell?Exchange value

What do we need?Use value

Core beliefs Scarcity Plenty
Homo oeconomicus Homo cooperans
It's about resources (allocation). It's about us.
Governance Market-State Polycentric / Peer-to-Peer Governance
Decision making hierarchical horizontal
Command (Power, Law, Violence) Consensus, Free Cooperation, self-organization
Social relationships Centralization of power (monopoly)

Decentralization of power(autonomy)

Property Possession
Access to rival resources Limited by boundaries & rules defined by owner Limited by boundaries & rules defined by usergroups
Access to nonrival resources Made scarce (to ensure profitability) Open access (to ensure social equity)
Use rights Granted by owner Co-decided by user groups
Dominant strategy Out-compete Out-cooperate
Results
For the resources

ErosionEnclosure

Conservation Reproduction & Multiplication

For the people Exlusion & Participation Inclusion & Emancipation


Visualization

P2PBusinessVisualization1.jpg
Expand

A map with a conceptual overview of the peer to peer business space. Every concept in the map is searchable via our wiki search box on the upper left.

See also:

  1. the New Economy mindmap
  2. a really superb introduction to the new economy in prezi by Arthur Brock: http://prezi.com/xmzld_-wayho/new-economy-new-wealth/


Recommended Internal Entries

Check the following priority entries:

  1. Vision Statement
    1. Michel Bauwens on the Underlying P2P Values: Video
  2. From consumption to produsage
    1. The new partnership economy
      1. Peer Production; Direct Economy; Production without Manufacturer; Circulation of the Common
      2. Co-Creation ; Co-Design ; Co-production ; Citizen Product Design ; Crowdsourced Design
      3. Crowdsourcing ; Crowdfunding ; Crowdpricing
    2. Affinity Markets and Social Commerce
      1. Affinity Investing  ; Affinity Markets ; Recognition Markets
      2. Community Supported Manufacturing ; Community Trading Software ; Community Wealth Building
      3. Long Tail ; Social Commerce
    3. New marketing practices
      1. Group Buying ; Group Purchasing
      2. User-created Advertizing ; User-driven Advertizing ; Citizen Marketers ; Crowdsourced Advertising
    4. New Economic Logics
      1. Attention Economy ; Economics of Attention; Intention Economy ; Pull Economies
      2. Conversation Economy ; Markets as Conversations
      3. Ethical Economy ; Bottom of the Pyramid ; Blended Value; Good Capital, Inclusive Capitalism
      4. Fair Trade ; Social Entrepreneurship
      5. Markets without Capitalism ; Natural Capitalism ; Steady State Economy
      6. Economics of Sharing; Altruistic Economics ; Cooperative Economics, Collaboration Theory , Collaborate to Compete
      7. Quarternary Economics; Adventure Economy ; Process Economy
  1. New coopetitive practices
  2. New distributed infrastructures
    1. Physical P2P Production
      1. Open Design ; Open Peer to Peer Design, Open Hardware ; Free Hardware Design ; Product Hacking
      2. Desktop Manufacturing ; Personal Fabricators ; Multiple-Purpose Production Technology
      3. Rapid Manufacturing ; Rapid Prototyping ; Rapid Tooling
  3. New institutional formats
    1. New business models
      1. Open Music Business Models; Open Film Business Models; Free Software Business Models; Open Source Business Models ; Open Source Commercialization
    2. The new capitalism
      1. Hacker Class, Netarchical Capitalism ; P2P Capitalism ; Cooperative Capitalism ; Peer Production Entrepreneurs
  4. New funding models

Key Resources


  1. The Top 100 Open Innovation Companies

Key Articles

  1. Principles of Distributed Innovation. Karim R. Lakhani and Jill A. Panetta.
  2. When to engage in open innovation? Bhaskar Chakravorti.
  3. Heather Young: The Three Circles of the Economy.
  4. Marjorie Kelly: Not Just For Profit: Emerging alternatives to the shareholder-centric model could help companies avoid ethical mishaps and contribute more to the world at large. Explores three new-style corporate designs: 1. stakeholder-owned companies; 2. mission-controlled companies; and 3. public-private hybrids.
  5. Jean-Francois Noubel: Economics of Flow vs Economics of Accumulation
  6. Introduction to Commons-centered economics. By Sam Rose, Paul Hartzog et al.
  7. Umair Haque: Towards an Ethical Economy Based on Allocative and Creative Advantage

Also:

  1. Five reasons online community building trumps old style marketing

Corporate Reform

  1. Using Corporate Governance Law to Benefit All Stakeholders. Kent Greenfield [4]
  2. Internal Transformation of Corporations. Michael Thomas and Bill Veltrop [5]
  3. Revisiting Corporate Charters. Charles Cray [6]
  4. Emergence of New Corporate Forms. Susan Mac Cormac. [7]
  5. Action Agenda for Corporate Redesign. Deborah Doane [8]

Key Books

  1. The Wealth of Networks: How Social Production Transforms Markets and Freedom - by Yochai Benkler
  2. Democratizing Innovation - by Eric Von Hippel
  3. Wikinomics: How Mass Collaboration Changes Everything - by Don Tapscott, Anthony D. Williams
  4. We Are Smarter Than Me: How to Unleash the Power of Crowds in Your Business - by Barry Libert, Jon Spector, Don Tapscott (foreword)
  • The Mesh: Why the Future of Business is Sharing Lisa Gansky. Portfolio / Penguin Group, FALL 2010
  • What's Mine is Yours: The Rise of Collaborative Consumption, by Rachel Botsman and Roo Rogers (Fall, HarperCollins), 2010


Also:

  • Brafman, Ori and Rod A. Beckstrom, The Starfish And the Spider: The Unstoppable Power of Leaderless Organizations, Portfolio, 2006.
  • Chesbrough, Henry, Open Innovation — The New Imperative for Creating and Profiting from Technology, Harvard Business School Press, 2003.
  • Fingar, Peter, and Ronald Aronica, Dot Cloud. Meghan-Kiffer Press, 2009.
  • Hayes, Tom, Jump Point: How Network Culture is Revolutionizing Business, McGraw-Hill, 2008.
  • Howe, Jeff, Crowdsourcing: Why the Power of the Crowd Is Driving the Future of Business, Crown Business, 2008.
  • Kelly, Kevin, New Rules for the New Economy, Penguin, 1999.
  • Li, Charlene and Josh Bernoff, Groundswell: Winning in a World Transformed by Social Technologies, Harvard Business School Press, 2008.
  • Malone, Thomas W. et al, 1) Inventing the Organizations of the 21st Century, MIT Press, 2003; 2) Coordination Theory and Collaboration Technology, Erlbaum, 2001.
  • Mulholland, Andy et al, 1) Mesh Collaboration, Evolved Technologist, 2008l 2) Mashup Corporations: The End of Business as Usual, Evolved Technologist, 2008.

Key External Articles

  1. Vision Statement
    1. The Not An Employee Manifesto
  2. On the Economics of the Commons
    1. Circulation of the Common. Nick Dyer-Whiteford.
    2. Common Rights vs Collective Rights is an essay by Dan Sullivan in which he also explains the difference between Common Property and collective property.
    3. Can peer production make washing machines?. By Graham Seaman.
    4. Contrasting Firm Strategies for Open Standards, Open Source and Open Innovation. by Joel West. Excellent intro to the economic realities limiting true openness.
  3. On Information Economics
    1. JP Barlow, “The Economy of Ideas: A framework for patents and copyrights in the Digital Age”, Wired 2.03 (March 1994)
    2. E Dyson , “Intellectual Value”, Wired 3.07 (July 1995)
    3. K Kelly, “The Economics of Ideas”, Wired 4.06 (June 1996)
  4. On Open Source economics
    1. The economics of open source
    2. Open source as user innovation – von Hippel
    3. Analysis of OS Business models
    4. Allocation of resources in OS mode
    5. Open source outside software – Clay Shirky
  5. On the Economics of Participation
    1. Ten Principles for an Ethical Blogger Approach For Marketers
    2. Which tools to use for collaboration in business? - recommended overview table.
    3. The Open Business Guide
  6. Miscellaneous
    1. List of Social Media managers in US businesses



Key Podcasts/Webcasts

Podcasts:


Webcasts:

See: P2P Videos on Business and Economics, list compiled in 2008

Here's a primer on economimc growth, that every economist and business person should watch: http://www.youtube.com/watch?v=Sqwd_u6HkMo&feature=player_embedded#

Key Tags

Citations

Long Citations

Competing 'on top' of the Commons

"One of the best ways to stimulate competition, innovation and lower prices is for participants in a market to honor the commons (a shared pool of resources, a minimal set of safety or performance standards) and then to compete "on top" of the commons. Instead of being able to reap easy profits from monopoly control over something everyone needs -- say, a computer operating system like Windows -- a company must work harder to "add value" in more specialized ways."


- David Bollier [9]


Obtaining Economic Advantage through Serving and Sharing

"The future of advantage is radically different from the past for a simple reason: because it's economically better. 20th century advantage focuses firms on simply extracting resources from people, communities and society — and then protecting what they extract. 21st century advantage focuses firms on creating new resources, and allocating them better. The former is useful only to shareholders and managers — but the latter is useful to people, communities, and society. The old Microsoft was useful to shareholders, but a lot less useful to society — and that's exactly how Google and Apple attacked it, and won."

Umair Haque [10]


The Sharing Economy should be distinguished from the Monetary Economy

"... the quest for self-determination and meaningful and memorable experiences ultimately will hinge on people's understanding that they are not merely consuming a product, but that they are actually participating in a meaningful social process not guided by an extrinsic logic (profit), something that rather has intrinsic, or 'sovereign' value. I don't believe that these two can be fused into one

- Eric Kluitenberg, iDC archive [11]


Market Logic vs. Network Logic

"The philosophy that undergirds exchange also contrasts sharply across forms. In markets the standard strategy is to drive the hardest possible bargain in the immediate exchange. In networks, the preferred option is often one of creating indebtedness and reliance over the long haul. Each approach thus devalues the other: prosperous market traders would be viewed as petty and untrustworthy shysters in networks, while successful participants in networks who carried those practices into competitive markets would be viewed as foolish and naive... In a market context, it is clear to everyone concerned when a debt has been discharged, but such matters and not nearly as obvious in networks."

- Walter Powell - "Niether Market Nor Hierarchy: Network Forms of Organization" 1990


From Profit-Maximization and Market-Orientation to Mission-Focused

Profit maximizing limits access to knowledge, by limiting it to paying customers. If anyone thinks this is just a side-effect of today's market incentives, then we can put the situation differently: Profit maximizing doesn't always limit access to knowledge, but is always ready to do so if it pays better. This proposition has a darker corollary: Profit maximizing doesn't always favor untruth, but is always ready to do so if it would pay better. ... Instead of hypnotically granting the primacy of markets in all sectors, as if there were no exceptions, we should remember that many organizations compromise profits or relinquish revenues in order to foster their missions, and that we all benefit from their dedication. Which institutions and sectors ought to do so, and how should we protect and support them to pursue their missions? Instead of smothering these questions for offending the religion of markets, we should open them for wider discussion.

- Peter Suber [12]

Markets without Money

"Money is a very important and useful medium of exchange for high-value, tangible products. For small-value, intangible products, the costs tend to exceed the value of the transactions—especially when you add in the overhead associated with making payments at a distance. Fortunately, human beings are clever. We’ve begun to find a variety of substitutes for money that work better."

- Tim Lee [13]


Social Commerce and the Intention Economy

"only 13% of consumers say they buy products because of their ads. Contrast that to 60% of small business owners in North America that say they use peer recommendations to make their buying decisions and over 70% of 18-35 year olds who report the same for their media purchases."

- Tara Hunt [14]


Monetization vs. Community value creation

"When you try and "monetize your users", you accept the almost obscene assumption that people are meant to be pimped out, sold to the highest bidder, resources to be slashed, burned, and exploited. But that's not how the edgeconomy works. Businesses need what connected consumers have to give more than connected consumers need what businesses have to sell.

Let's put that a little more formally. Monetization is ugly because it blinds us to the truth that value must flow in many directions. That's the essence of edge strategy, in fact."

- Umair Haque [15]


The New Social Capitalism

"Capitalism takes a narrow view of human nature, assuming that people are one dimensional beings concerned only with the pursuit of maximum profit. The concept of the free market, as generally understood, is based on this one- dimensional human being. Mainstream freemarket theory postulates that you are contributing to the society and the world in the best possible manner if you just concentrate on getting the most for yourself. [...] The presence of our multi- dimensional personalities means that not every business should be bound to serve the single objective of profit maximization"

= Muhammad Yunus [16]



Short Citations

  • Our First Curve economy is dominated by hierarchical organizations focused on managing costs. In the Second Curve economy, business models focus on creating networks and value webs. [17]
  • When costs of participation are low enough, any motivation may be sufficient to lead to a contribution.- Michael Feldstein [18]
  • Peer production is viable when: 1. capital costs (needed for production) fall far enough and 2. coordination costs fall far enough. Cheap computing and communication reduce both of these exponentially, so peer production becomes inevitable. - Anomalous Presumption [19]
  • Working together as equals. Profiting from each others success. These two ideas represent a surprisingly radical redefinition of work. - Bernie DeKoven [20]
  • We genuinely believe that radical sharing is a win-win for everyone. Expanding markets create new opportunities. - Tim Bray, Sun Microsystems [21]
  • The best people (to solve any given problem) don't work for your organization. A corollary to this: if you don't have the best people working for you, you will fail. Use transparency and the marketplace to find the best people located outside your organization. - John Robb [22]
  • Post-industrial modernization brings a fundamental shift in economic strategies, from maximizing material standards of living to maximizing well-being through life style changes. The "quality of experience" replaces the quantity of commodoties, as the prime criterion for making a good living - Alan Moore [23]
  • The Implicit Goal of Attention Economy is: to tightly intertwine everyone at the level of mind. But that involves individuals seeking, obtaining and/or paying attention. - Michael Goldhaber [24]
  • the money in this networked economy does not follow the path of the copies. Rather it follows the path of attention, and attention has its own circuits. - Kevin Kelly [25]
  • The peer producers are their own consumers. They get a better product by tapping into the knowledge pool. And they get a product that exactly fits their needs because they help design it. - Eric Schonfeld [26]
  • In this new world, if it doesn’t spread, it’s dead. And those companies which seek to prohibit the manipulation and circulation of their content will find themselves cut off from the mechanisms which generate value in this new media economy. - Henry Jenkins [27]
  • The crisis we are now living through is essentially a value crisis, where . . . exchange value no longer adequately reflects use value, or, to put it in less cryptic terms, there is a general sensation that a lot of the real values that circulate in our economy cannot be adequately represented. - Adam Arvidsson [28]

The P2P Business Encyclopedia

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