Category Archives: Open Source Business

A great combination: Open Source and business

Openness at Amazon

Technology Review shows how Amazon use transparancy and openness by giving away most of their product data:

The strategy behind Amazon Web Services is to give programmers virtually unlimited access to the very foundation of Amazon’s business its product database. whether they are inside or outside the company’s walls. Developers can grab product data, reformat it, add related services, and use it to attract eyeballs to their own sites. If they feel like it, they’re even free, like Taylor, to create parallel-universe Amazons that have the added features they crave. Amazon demands only one thing in return: that visitors to these satellite sites complete any purchases through Amazon.com itself. The site owners, meanwhile, earn a decent commission on each sale.

Exposing the world’s largest product database – along with the editorial content and personalization functions that make Amazon.com so uncannily useful – is such a counterintuitive business strategy that analogies are hard to come by.

Amazon:
* Has very little control over what people choose to do with their data
* May ultimately loose web traffic to other sites using that data
* Also allow competitors access to the same data

And they see a critical business advantage in this “naked” approach. Yay!

Doing business in the nude

If you have to be naked, you’d better be buff.

This quote is from The Naked Corporation by Don Tapscott and David Ticoll, one of the books I’m currently reading. They argue (and quite convincingly so) that businesses are entering an age of transparency, ie. that some of the major forces affecting markets and societies increasingly favor those organizations who are open and honest. That in an age where the cost of communication is constantly dropping, the world most likely WILL know what goes on inside your organization – whether you want it or not.

Here’s my take on this: Yaaaaaaay!!! Openness and transparency are good, and it’s hard to be happy and enjoy your job in a company that requires you to keep too many secrets. I think our natural state is to be open and share information, and we can relax more when we’re allowed to do that.

For an additional reason why transparency works, read Non zero by Robert Wright. This book argues that those who cooperate will always triumph over those who battle each other, not in every case but in the long run. And those who can be open and transparent can cooperate way more effectively than those who keep everything secret.

Ethical balance sheet

Bank manager Hans Erik Brønserud explains the reasoning behind the ethical balance sheet his bank does in addition to the normal balance sheet:

First and foremost this has given us a tool, which gives us a unique opportunity to sense how our stakeholders view us and what we do. Every year we get specific feedback on whether we are in agreement with our customers, employees and community, and the tables and graphs instantly show us if we’re slacking in any area.

But all of this knowledge makes no difference if we in management don’t take in the signals and correct the things that aren’t working optimally, and this we’ve chosen to do since the very first ethical balance sheet.

BTW, I’m thrilled by their mission statement:

1) We must treat our customers in a way that keeps them coming back and makes them mention on favourably to people who aren’t yet customers with us.

2) We must treat our employees in a way that makes them look forward to coming to work every day and be proud to mention where they work.

3) We must make enough money to keep fulfilling the first 2

Read the entire article (in danish)

Learn from the penguin

This paper describes what businesses can learn from the open source movement. An appetizer:

In this paper I explain that while free software is highly visible, it is in fact only one example of a much broader social-economic phenomenon. I suggest that we are seeing is the broad and deep emergence of a new, third mode of production in the digitally networked environment. I call this mode “commons-based peer-production,” to distinguish it from the property- and contract-based models of firms and markets. Its central characteristic is that groups of individuals successfully collaborate on large-scale projects following a diverse cluster of motivational drives and social signals, rather than either market prices or managerial commands.

The article concludes that “this mode has systematic advantages over markets and managerial hierarchies when the object of production is information or culture” which is precisely my business. The Happy at Work Project is organized around 4 principles one of which is open source, and this is a wonderful validation of something I’ve instinctively believed in for a long time.

Pay by ethics

There’s a new trend in rewarding senior executives, namely to decide their pay based not only on financial performance but also on other “softer” measures. Here’s an example:

Calvert, the nation’s [USA’s] largest family of socially responsible mutual funds, is trying a new proxy tactic. It has filed resolutions pressing four companies to begin rewarding executives according to how well they meet the firm’s own social goals, as well as financial ones. This could mean pay hikes for executives who oversee a surge in employee satisfaction or a drop in toxic emissions, to name a couple of possibilities. Response has been encouraging, the mutual-fund company says. Dollar General and Xerox have agreed to link incentives to their firms’ social goals…

Very interesting. The Christian Science Monitor has an excellent article on new trends in executive pay, which also mentions Ben & Jerry’s policy of the average executive making no more than 5 times as much as the average factory worker. Cool!

WorldBlu Forum

The most interesting and cutting-edge business conferences of the year will be The WorldBlu Forum on organizational democracy.

It’s in DC on October 26-29, and the participants will all be leaders under 40. Organizational democracy is one of the most crucial concepts organizations must learn to suceed in the future. The current trend clearly shows, that organizations that get this live, thrive and develop. Not to mention the fact that the people who work there have a lot more fun :o)

Among the speakers are:
Mart Laar – former prime minister of Estonia and a man who knows intimately what democracy is about
Peter Block – author of two of my favourite business books
Mads Kjaer – CEO of Denmarks best workplace
Alexander Kjerulf – Hey, that’s me

I just KNOW it will rock, and I can’t wait for october to come around. You can register for the conference here.

Firefox browser reaches 25.000.000 downloads

Since Firefox 1.0 became available a few months ago it has been downloaded a staggering 25 mio. times. Not bad for a free, open source product developed by volunteers.

If you’re not already using it, you need to know that:
* It’s free
* It has more and better features than Internet Explorer
* It is more secure than Internet Explorer
* You can download and install it in minutes

Go get it, already.

Giving it away

According to a recent analysis, 35% of all traffic on the internet today is done in a protocol called bittorrent. So this was probably developed by Microsoft, who’re making a zillion bucks on it, right? Wrong! Well, then it must’ve been created and marketed by some other big internet company, RIGHT? WRONG!

Bittorrent, which is a radically new way of transferring large amounts of data, which has the distinction of becoming MORE efficient, the more people use it, was created by one lone geek name of Bram Cohen.

Like many geeks in the ’90s, Cohen coded for a parade of dotcoms that went bust without a product ever seeing daylight. He decided his next project would be something he wrote for himself in his own way, and gave away free. “You get so tired of having your work die,” he says. “I just wanted to make something that people would actually use.”

“Give and ye shall receive” became Cohen’s motto, which he printed on T-shirts and sold to supporters.

He open sourced the whole thing, and there are now lots of bittorrent clients that use his technology and code. There’s a very interesting interview with Bram Cohen on Wired.

This technology is about to change the way we access media. It’s easy, user-friendly and unstoppable because since nobody owns it, you can’t sue to make it stop like they did with Napster and are doing to Kazaa.

Which just goes to show that one man’s work CAN change the world.

IT policies at Semco

I’ve gotta hit you with one more quote from CIO Insight’s brilliant interview with Ricardo Semler. This one’s about IT policies:

One of the things I’ve noticed with this security issue is that IT people want to make sure that their systems are intact, private, confidential “blah, blah, blah” but they think nothing whatsoever of invading the e-mail privacy of their own employees. That’s very interesting to me, because it’s not only a double standard, but a violation of constitutional rights. Companies have taken the blind assumption that because the system is theirs, then anything that people do on it has to be available to them. I think it’s a very hypocritical mode, and it deals with fundamental freedom issues that I don’t think people have completely thought through.

…And what’s most interesting is that we searched far and wide for anybody who could tell us what kind of software or system could be installed on our [server] that would make it impossible for our own IT people to spy on people’s e-mail. We did not find one. We had to customize one.

Imagine that: A company that actually goes out of it’s way to ENSURE that employees’ emails stay private. That is an immensely powerful statement of faith in people.

Common sense at Semco

CIO insight has a truly excellent interview with Ricardo Semler, the CEO of Semco. Here’s my favourite bit from the interview:

When you want somebody hired, let’s say it’s for a leadership position of some kind, you go to the system and you advertise that you think someone is needed. Then on a given day – say, Wednesday at 4 o’clock, meeting room 11 – you say we’re going to discuss this, whoever’s interested. Because of the fundamental tenet that we don’t want anyone involved in anything that they really don’t want to do, all of our meetings are on a voluntary basis, meaning that the meetings are known, and then whoever is interested can and will show up, and should also leave the moment they become uninterested. It is a bit unnerving to watch these things, because people come in, plunk their things down, and then 15 minutes later somebody else says “Bye bye, see you.” But the fact is that whoever is left there has a stake in the decision being made, and the decision is final in the sense that it’s going to be implemented after the meeting.

All meetings are voluntary. How cool is that? Read the interview, it’s great! Also, for those of us who know Open Space Technology: That’s the law of two feet right there!