Open for Business in Every Way
Published 07:22, 29 June 11
For some reason, I seem to be giving talks all over the place this month. I've already written about the one that I presented at the European Parliament at the end of May, and I'll be blogging about my presentation at the Open Knowledge Conference in Berlin this week in due course (once I've finished writing it....).
But in this blog post I want to expand on some of the ideas I explored at a meeting entitled “The Future is Free”, held in Kortrijk, Belgium, last week. The session was recorded, so there should be videos of the talks at some point: when they're available, I'll add the link.
As usual, I've embedded the presentation itself at the end of this post, so you can flick through the whole thing there; but here I want to concentrate on the last section of my talk, which looked at ways business can benefit from openness.
What I was keen to do there was not so much the usual “look at all the fun things you can do to money from giving stuff away”, since that by now is well-explored territory (one, moreover, that is visited briefly in the earlier slides of the set below). Instead, I'll focus on the other ways in which openness of a general kind can provide benefits to businesses that embrace it.
This was the subject of my Brussels talk, where I pointed out how the open source methodology was in fact a precursor of the more recent “Open Innovation” movement. The basic idea is that, just as with new code, when creating new products it pays to bring in the future users early on. They can not only comment on your plans, but pass on what they see as their needs, and offer their own ideas. Given enough eyeballs, bugs are not only shallow, but you get a range of ideas that is impossible to replicate within a traditional Research and Development department.
There is also scope for involving your competitors. This is standard practice in the open source world, where companies work together on an open project, putting on one side the fact that they are rivals. This allows far faster progress to be made than in trying to go it alone, and ensures that there is wide support for the final result. Competition then moves further up the stack, using the common project as a starting point for more differentiated offerings.
Open Marketing and Sales
This is such an obvious advantage of the open source way: the fact that people can download full versions of your code and try it out before committing themselves. It also means that they can pass it on to colleagues. That's the best marketing and sales you could hope for, because it comes from trusted individuals offering honest opinions. Even if a company does not sell digital artefacts as its main products, there may well be elements that can be made freely available to encourage potential customers to download them and pass them around.
It's not just during the design process that customers can get involved. The more open a product - or parts of a product - the greater the scope for customisation. And that, in its turn, means a greater likelihood that customers will return to the manufacturer to commission such work. Although open products will allow third parties to provide this, the original manufacturer always has a huge advantage here.
Such customisation and consultancy services are typical ways in which abundant digital elements can provide opportunities for services, typically based around people, whose specialised skills are scarce, and hence valuable.
The end-result of this is to strengthen bonds between customer and manufacturer by making the relationship between them something that extends far beyond the initial sale. Openness encourages this on many levels in a way that closed products do not.
Finally, and more subtly, adopting a more open approach to business has important knock-on effects that can be beneficial to companies. For example, the more that openness is present within a market sector, the more likely it is that rival companies will open up, and perhaps collaborate on certain kinds of projects.
More generally, fostering openness in this way provides a useful boost to open projects in completely different domains - for example, open data or open government. The stronger these grow, the more openly-available materials there will be for a company to exploit in new ways.
These are only very general ways in which openness can benefit a business, but they emphasise that it's not just about making digital material freely available; rather, it is a question of exploiting openness at all stages of the business process to obtain new kinds of advantages.