Sunday, 14 April 2013

Open For Business: Part 1

TL;DR - Open models for value creation work. Look at open source projects, Wikipedia, Kickstarter projects and many others. Lean Startups and Customer Development approaches are pretty open too and we are increasingly seeing open data and open, transparent support ... but how far can we go? Can we open up everything in a startup from idea generation to planning, discussions, financial and testing data? What would an "open source" business look like?

There has been a gear change in many communities towards open collaboration. We know about the open source community, but startups, science, engineering[2], charities and other organisations around the world are experimenting more and more with openness.

Startups have gone from from a default "stealth mode" position to increasingly seeking open feedback on ideas before even beginning to build the product. Entrepreneurs can be found on forums posting "I have 6 months free, what shall I build?" and similar[3] threads. This open approach is increasingly becoming the foundation of startups ... but how far can it be taken?

Over the past year or so I have been thinking about the following question on and off [1]: What would an "open source" business look like? I don't mean a business that makes money from open source software such as Red Hat or Citrix ... I mean a business that is itself as open as open source software.

Using the term "open source" is misleading. Businesses don't have a codebase as such. What if they did? What if you could codify your business in a way that allows anyone to examine it and contribute to its development? How could you make your entire business startup processes more like your Github account and less like an "in the shadows" affair?

Time and time again, we see that when people come together in a structured and open way, good stuff happens. Fostering openness is a good thing. When this innovation meets a requirement to generate some cash, things start to break down. Doors start to close and people plan, experiment and toil in private. There is a friction between contributor value generation and generating monetary profit for shareholders. Perhaps this is why open source projects distinct "project" and the "business" (think Fedora and Redhat Inc) entities with independent ways of working (open and closed). Does this distinction need to be made or are things changing? Can we open everything?

When I sit and imagine an open business, it is one of total transparency. Our IRC channel is public, our Trello board is public, our emails are public. If we are planning our marketing approach or what servers to use, that's public too. We would broadcast our meetings as public Hangouts. If we can make it public, we do. We don't have inboxes ... we have public mailing lists. Each of these things have been seen before, and proved successful. Could we make it the basis of our startup's DNA ... would it be beneficial?

Imagine, as a startup, having domain experts join and contribute to your financial, marketing or technical discussions and helping you out because they like the product and want to see it succeed. Contributors may provide input, not because they expect a monetary payoff ... but because they gain value in ways similar to a programmer fixing a bug in an open source software project. The difference is they are helping with startup bugs, not software bugs.

This is part one of a series of posts trying to explore some of the questions an open business throws up. For example:
  1. Is it even possible? Can a business operate in this way without destroying value or preventing value/wealth creation for shareholders?
  2. Is making it clear that contribution does not equate to ownership/direct financial benefit deter people? (I think no)
  3. Would an open business be more scientific? Based more in proof? More meritocratic?
  4. Is secrecy a requirement of sustainable competitive advantage? Can being open provide more advantage?
  5. How do you reconcile long-term value generation for shareholders with a business built from the contributions of a wide range of ad-hoc contributors? Are the two things incompatible?
  6. What value are voluntary contributors getting? Is this comparable to a software developer contributing time to an open source project?
  7. Is it enough to compare software to a business? Is a business structure analogous to software in a development sense? ... for example is there an organisational equivalent of a commit log? What would that look like? Would it be useful?
  8. What might a leadership and management structure look like in an open-business? Does it match the leadership and management approach of projects like the Linux kernel? Perl? Python? Might it look more like Valve? What comparable structures exist?
  9. What about legal obligations to keep things private? What about contractual obligations with partners or customers? How do you manage those?
Answering these questions might take a while, and may well involve a living experiment in the form of a business ... what do you think?
[1]: I am in no way qualified to even think about thinking about things like this. Im just another coder/startup founder trying to do something cool while i'm alive.
[2]: For example, Protie by Cesar Harada []
[3]:,,,, and they are just the first few pages of Ask HN. Not that the HN crowd are typical people ...