Slashdot Mirror
A New Spin on Open Source Business Models
IT Managers Journal is reporting that a Canadian communications student is trying to put a new spin on open source business models. Greg Dean, a student at Simon Fraser University, is attempting to merge the principles of open source with that of a co-op and a regular corporation. From the article: "On the first slide of his presentation, Dean described the ICT/OS as a 'participatory, self-managed workers' business' designed for 'getting the benefits of a corporation through the convivial democracy of a co-op.' Punctuated by dozens of questions, the rest of the presentation explained exactly how he thought this goal could be achieved. In his vision, the co-op would involve three types of members: full members, who are freelancers in high-tech professions and have full voting rights; associated members such as lawyers who provide services to the co-op; and non-members with an investment in the company."
This looks like more of that randomised babble I get from my junkmail folder... Could anyone translate into inoffensive plain english? How is this different from any other business plan? Honestly?
If I send this to my boss, maybe he'll fall asleep and we can all party.
is Spin.
I agree that the two may work well together, but I am a bit concerned how the division of tasks will take place. In co-operatives, (atleast the one that I saw), there is usually a clear division of tasks. This worked ok because
- Though the notion of a co-operative is egalitarian, actually, there is a small group of dedicated people, who are most involved
- These people who usually form part of the board, are "more equal than the rest" and can actually make people do stuff that is important for the co-operative, but can sound unsavoury
- Also, the co-operative is a pyramidal thing, with the people towards the bottom being less skilled than the ones at the top. Its a small pyramid with a wide base, but, it is for sure a pyramid. The only reason the people at the base are willing to work there are, the money generated is for real, (and sometimes, because they trust the people above them to be working for their benefits)
While what I said is nothing new and is already in place in most successful open source models, I find some differences which I would be interested in knowing, how the new model will bridge- A co-operative of software engineers is hard to maintain, since every one comes with a high level of skill sets and the resultant ego. This makes the setting up of a pyramid very hard
- While there are successful models of monetization of open source, they are few and far between and most of these models are hard to replicate. This takes away the basic incentive of a co-operative
- A co-operative is often a below the radar operation, generating wealth with out too much of recognition. Most opensource projects (the way I see them) work the other way round
Do correct me if I am wrong, but I would love to read more on what other people think on this!Let me know if they ever actually do anything with this. Until then, who cares?
instead of a Canadian Communication Student? Sorry, this joke wrote itself.
This looks like more of that randomised babble I get from my junkmail folder... Could anyone translate into inoffensive plain english? How is this different from any other business plan? Honestly?
Every business plan I've ever seen (for something beyond a sole proprietorship or partnership) takes for granted that the business will be established as either an S-Corp, LLC, or C-Corp. I'm not sure how business formation works in Canada. However, based on the article, it appears that the idea is to create a business structure that borrows features from a co-operative association (ex: a co-op grocery store or a co-op lending organization), while retaining features of a corporation.
Just because the concept seems a bit convoluted doesn't make it particularly "offensive" to my mind. Many extremely successful businesses have structures that can't be explained in less than 10,000 words, anyway. I'm of the opinion that part of the reason we have companies that do stupid and destructive things is because the legal structures for those companies encourage buck-passing, groupthink, and sublimation of individual responsibility. The article indicates that this new structure attempts to avoid both of those. It will be interesting to see if anyone gives it a try.
Read the EFF's Fair Use FAQ
Hi,
Our group has been operating as a co-operative for about 10 months now. We're on the verge of incorporating, likely as a multi-stakeholder for-profit co-op based in British Columbia, Canada.
We do colocation, virtual servers (Xen), virtual hosting (IMAP, Jabber, Apache, Zope/Plone, Drupal, DNS, etc.), and consulting in a co-operative model. Our members get pricing that reflects, as accurately as possible, the true cost of providing any given service. We also sell to non-members, from whom we attempt to make a profit. Members get the opportunity to provide consulting services through the co-op, and all profits go into improving the co-op's infrastructure and/or providing membership dividends.
We have 16 members, ~US$3,000 in member investments, and a full-cab at a pretty good carrier-neutral colo facility in San Francisco. We have members in British Columbia, California, Hawai'i, Florida, and England. We also have participants in the Czech Republic.
You can read more about our efforts here: http://www.cernio.com/cooperative/
Graham
+1 415 462 2991 (09h00 -> 22h00 Pacific time)
This topic is so dry...nobody is commenting.
Anyway, integrating past successes with Possible Future successes might prvide a good blend to greater success
My Blog | Badsh
I read TFA and I don't understand why the Slashdot title is "Open Source Business Models". This sounds more like an organisation structure (and a fairly lame one at that) than a business model. Shouldn't a business model outline what they're going to sell, how much they're going to charge, potential revenues, etc. etc.
This just looked like a load of fluff to me. Did I miss the point?
Which, like almost any other business, he almost certainly will. He seems to be under this mistaken impression that companies only make money. I got news for you, companies can and do lose money, especially new companies. Which is why people who invest in those companies expect some sort of return when times are good. What he seems to think is that people will invest money in his corporation, take all the risk, but be given almost none of the profits. Yeah, I'm going to add that one to my IRA....All those hands who were extended when times are good might all of a sudden disappear when times are bad.
Pseudo-intellectual babble is NOT a business. He seems to be wanting to run a charity. If you want to run a chartiy, fine, run a charity.
As well as the micro-credit Muhammad Yunus scored his Nobel for, he is also proposing that some businesses might restructure around goals other than profit. Yes, if you've been a corporation watcher, it is a hard concept to get your head around.
Interesting interview on BBC a few days back, can probably found on the Beeb's website.
Engineering is the art of compromise.
To put it in Edison's words: Realization is 1 percent inspiration and 99 percent perspiration. A lot of people have some very good ideas.
Just yesterday my friend was telling me how pre university schools are useless at telling people who they are and presented me detailed plan how the system could be revamped.
It was great and all, but so what? There are bunch of school that offer different programs than standardized school, there are just not so omnipresent.
The point is, if you do not go out of your way to implement your idea, it is left at just that - a thought.
there is no issue with my network
The way most open source software gets created is by businesses that need to solve a problem but don't want to be in the software business. These people pay for and/or contribute to an open source project because making the project open source lowers their costs and risks. It is essential for them and the other contributors that there are no legal obligations to each other, other than to keep the software itself open and freely distributable.
What's wrong with Dean's proposal is that it makes the false assumption that there is income that's distributed, or that there should be a group of people with decision making power. In fact, most commercially developed open source software has no income that's directly derived from the software, and the ability to fork a project freely is an integral and essential part of open source development. If you take away either one of those properties, you end up with software that may ship under an "open source license", but it's not truly an open source project.
Monetization means to establish something as being a currency, e.g. gold, silver, perhaps grain in agricultural communities. You mean "of making a profit or getting an income from Open Source." Why can't you just say that instead of using a word that you think makes you sound like some kind of economist? When there is an exchange rate on the currency markets of lines of source code to the dollar, your comment will make sense.
Morning rant over. Back to doing documentation.
Pining for the fjords
"participatory, self-managed workers' business' designed for 'getting the benefits of a corporation through the convivial democracy of a co-op."
Dunno about software and systems development - this boy's got a rosy future in advertising though!
AT&ROFLMAO
If the business plan is too difficult for slashdot geeks to understand, it's too difficult. I failed to see such an incomprehensible business plan would convince enough number of people to invest their precious money, time and energy. I'm a student majoring computer science at Simon Fraser University, and I believe I know a little about co-op, open-source, and business (well, give me a break), but have no idea what the plan is. Count me out.
Can't we wait till he graduates before we call it news???!!!
Sig Battery depleted. Reverting to safe mode.
We've already begun to discuss an open source company here http://www.opensourcecompany.net/forum Early days, but some good ideas coming out.
Actually, it's supposed to be an ellipsis. That's why it never works.
Before I start laying into this guy, may I say I'm from Scotland and a left-wing voter. I think there's a lot to be said for socialism, social contracts, national health etc. But I'm also met any number of people who like this kind of structure primarily because it gives them a degree of power and influence that a meritocracy wouldn't. I reckon I'm a smart guy (don't we all) but when I see phrases like "we need a sea-change in civilization in order to maintain homeostasis survival" I really want to punch someone...
After RTFA, I can only say the guy is letting his self-confessed bleeding heart get in the way of clear thinking. There is nothing in the business model that is inherently open source. And cooperatives - the examples given from Canada are credit unions and wheat pools - are typically groups of people that have separate businesses or interests but benefit from some kind of shared service or infrastructure. So if, for instance, some of your best freelancers got great opportunities, they wouldn't necessarily need to use the shared infrastructure and suddenly the cooperative is weakened.
When we're talking about shared infrastructure, given the competition in e.g. hosting services, I'm not convinced a cooperative would give you any better value than a reputable company. More to the point, shared infrastructure is a way to reduce costs, not generate revenue - so where's the business model?
Also, look at the structure. The board is also the executive i.e. in terms of decision makers, there's no check and balance. The board is made of at least 60% members. Apparently the board is there in part of prevent the "fascism of the group", which apart from the telling choice of knee-jerk political wording is nonsensical. If the board is mostly comprised of group members, if the group is dominated by special interest groups there's a strong chance the board will be as well.
The board is going to end up being the most skilled individuals. Personally, I'd prefer to have the best managers running a company and the most skilled technicians doing what they do best. I've had some good managers in my time and this is the method that works. Genius programmers who would actually prefer to spend their time managing politics, feel free to disagree!
You'll probably also have the odd board member who got there through politicking, which (forgive my cynicism) often seems to me the reason why people with an interest in community based politics are so keen on it. It can act as a substitute for actual skill and clear thinking.
To paraphrase the bible, there ain't nothing new under the sun. So nothing to see here, move along...
How much money does this guy make a year? That would be the level of vaule I would put on any busniess ideas he has.
Also, from TFA:
and later on
Anyone else see a potential membership-for-votes conflict here?
...why management thinks IT people have no grasp of practical business concepts.
Think of this as a credit union for software development. A hybrid between open source and a pure commercial venture. Co-op business models and profits are not mutually exclusive. The credit union I belong to operates profitably, as will any that want to stay in business. The local farmer's co-op in town makes a profit, then cuts a check for part of it back to the members. Grocery co-ops thrive, though you rarely hear about them because they don't usually have an advertising budget.
He can't be more specific on how they would operate because there's no way to predict that without actually forming one. The structure and operation are more fluid than a commercial venture. And the character and operation will change as the membership changes over time.
I think once the co-op development model undergoes more development it will be recognized as the next step in the evolution of software as a resource commodity. It's a business model that's been around a lot longer than any of us. It's just strange to those of you growing up on the internet because it involves human interaction in meat space. ;)
That's our life, the big wheel of shit. - The Fat Man, Blue Tango Salvage
I'm sure most of you recognize that this is nothing new, Compiere has been operating just like this for years.
It's kind of like the rest of the business world, but different: ... yeah, I don't really know how that's different. Maybe there's no dental plan?
Full members, who are freelancers in high-tech professions and have full voting rights - These are usually called "Employees".
Associated members such as lawyers who provide services to the co-op - These are known as "Management"
Non-members with an investment in the company - These are known as "Investors".
So this article has some holes and presumptions built into it that are leading people astray.
1. When 'Open Source' is used to mean OS type processes. That is to say that the co-op, through Balanced Job Complexes, participatory management, holoptic (everyone can see everything going on) transparency, etc., will run on these type of processes...
So this is not a business model, but a business process model. I have very distinct ideas about how to make this bugger cut throat profitable, including cornering %12 of the Canadian and %5 of the US market but that is up to the membership to decide democratically through the business process model.
2. This is new; it incorporates a complex share structure that no co-op I've come across has, it will apply parecon (see www.parecon.org) principles like BJC, self-management (your say matches you stake in the matter), and collective capital along with collective effort & sacrifice based remuneration. Some of these things are relatively new in of themselves and putting them all together in this frame work is new (although sure, there is nothing new under the sun).
3. I'm not a bleeding heart when it comes to business. After that quote I said something to the effect of our 'community economic development' work (as far as I'm concerned) will be setting up businesses for a parecon framework that will bank based on market development of loyal patrons to co-operative/parecon economies, and just good margins on products and services. If you saw a way to set up a distinct new brand that you could corner a market with and charge a premium, you'd do it too.
4. ICT workers will manage the company with guidance from the board of themselves and professionals like are lawyers, MBAs and accountants, just like any other corporation. But the workers manage it and do so sufficiently because it's in their interests and b/c they take on roles outside of their specific expertise resulting in them having more perspective on the business as a whole and so being able to collectively manage the biz through enterprise software which gives them a holoptic view. There will also be training of workers in basic business management skills and practices.
I'm sure there's more to clarify but I've got an enterprise to set up, a contract to bill for, and a book to write.
Greg
*The freedom to run the corporation, for any purpose (freedom 0).
*The freedom for anyone inside or outside of the corporation to study how the corporation works, does its business, keeps its books, and makes its outputs and the freedom to adapt it to your needs (freedom 1). Access to inside corporate information is a precondition for this.
*The freedom to start up similar and related businesses so you can help your neighbor (freedom 2).
*The freedom to improve the business, and sell your improvements to the public, so that the whole community benefits (freedom 3). Access to inside corporate information is a precondition for this.
... why IT people think managment have no clue about technical stuff.
Saying a thing like "A hybrid between open source and a pure commercial ventures" just demonstrates that who says it can't grasp the most fundamental concepts regarding sofware licensing. Although software licensing and the running of a company intersect under many circymstances, one thing lives in a completely different context from the other and is mostly independent from each other.
Pure commercial ventures exist already that exploit Open Source software.
Equalling Open Source Software with a co-op is idiotic beyond belief (if that is indeed what you were trying to do). People producing Open Source software can work in many guises, the only thing that matters is that the license their software with an open source license.
So in synthesis, WTF is your point?
IANAL but write like a drunk one.
And this makes a slashdot headline? Actually, I first heard about Linux when I sat in on my girlfriend's speech 101 class and a computer science student in the class gave a presentation. That's right, I switch because I thought CDE looked cool.
Chris Spannos must be grinning his f_cking ears off. Good one, Greg. I think you really got some people thinking with this one. Of course, your typical Slashdotter alread "knows better", but they are mostly beyond hope anyhow. I think some of the lurkers might actually be affected by the merits of a principled democratic business.
:)
I look forward to the book.
I've got a bad attitude and karma to burn. Go ahead. Mod me down.