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Except where otherwise noted these materials are licensed Creative Commons Attribution 4.0 (CC BY)
22-Oct-2015
Paul Stacey
Associate Director of Global Learning, Creative Commons
Building an open source business by Libby Levi licensed CC BY-SA
University of Porto (UPTEC)
Open Business Models
Agenda
Orientation
• Introduction to Creative Commons
• Describe Creative Commons open business models work
Goals & Preparation
• Questions about open business models
• Goal setting for the day
• Identifying fears of openness
Getting model design juices flowing
• Use case studies to interactively explore how open business
models work
• Rationale, benefits, and models of open businesses
• Stimulate a think different approach
Agenda
Design your OERu open business model
• Introduce the building blocks for what an open business model is
• Review the core questions to ask in building out each component
of an open business model
• Use a template to design an open business model for your
business
Open Business Model Design Sharing
• Group sharing of individual business models and their institutions
revenue opportunities and community service priorities
• Synthesis of multiple designs into one or two shared models
• Open business model gallery
Traditional © designed
for old distribution
models
The problem:
Technically easy to share but
legally not so easy.
Processing speed, bandwidth, storage increasing at lower costs.
Internet by Pat Guiney CC BY
creativecommons.org
We make sharing
content easy, legal, and
scalable.
What do we do?
Free © licenses that
creators can attach
to their works
How do we do it?
Retain copyright while at same time expressing up front a set of permissions.
Step 1: Choose Conditions
Attribution
ShareAlike
NonCommercial
NoDerivatives
Step 2: Receive a License
most free
least free
Lawyer
Readable
Legal Code
Human
Readable
Deed
Machine
Readable
Metadata
Best Practices for Attribution: (TASL)
Title
Author
Source – Link to work
License – Name + Link
Peace Bridge by D'Arcy Norman CC BY
https://docs.google.com/document/d/1mYkfsXT3U63wxQ-dB_WPTx4TZn9nrzWpBfX5RXEQKu4/edit?usp=sharing
“Except where otherwise noted these materials are
licensed Creative Commons Attribution 4.0 (CC BY)”
Galleries, Libraries, Archives & Museums
http://openglam.org/Open Access
Open Data
Open Textbooks
5Rs: The Powerful Rights of OER
• Make, own, and control your own copy of the contentRetain
• Use the content in its unaltered formReuse
• Adapt, adjust, modify, improve, or alter the contentRevise
• Combine the original or revised content with other OER to create something newRemix
• Share your copies of the original content, revisions, or remixes with othersRedistribute
Exploring Open Business Models
Building an open source business by Libby Levi licensed CC BY-SA
http://thepowerofopen.org/
http://teamopen.cc/all/
Creative Commons
Use Cases & Stories
https://www.kickstarter.com/projects/creativecommons/made-with-creative-commons-a-book-on-open-business
http://creativecommons.org/weblog/entry/45022
CC Toolkit for Business
Fátima São Simão
CCToolkits.com Project
CC Portugal Affiliate
What’s next?
Goal Setting for The Day
Empty Net by Jeff Wallace licensed CC BY-NC
Explore open business
models as an alternative
to traditional closed models
and design an example
open business model
for your business
Parking Fears of Openness
The Scream by Edvard Munch National Gallery Oslo Norway
Getting Open Business Model
Design Juices Going
Photo by andriuXphoto licensed CC BY-SA
Closed Innovation Paradigm
Chesbrough, Henry William (2006). Open Innovation: The new imperative for creating and profiting from technology. Boston: Harvard Business
School Press. pg. xxii.
Based on the belief that successful innovation requires control.
Companies must generate there own ideas, then develop them, build them, market them, distribute
them, service them, finance them, and support them, on their own.
Closed innovation counsels businesses to be self-reliant and internally focused.
To be sure of quality, availability, and capability you’ve got to do it yourself.
Open Innovation Paradigm
Chesbrough, Henry William (2006). Open Innovation: The new imperative for creating and profiting from technology. Boston: Harvard
Business School Press. pg. xxii.
Doing it all yourself fails to productively make use of new knowledge and ideas outside your business.
Open innovation combines both external and internal ideas to create value.
In addition, ideas can be taken to market through external channels, outside the current business of the
firm, to generate additional value.
Open innovation requires less control and more collaboration
Revenues
Costs
Own
market
revenue
Internal
development
costs
Own
market
revenue
Internal &
external
development
costs
The New Business Model of Open Innovation
License
Spin-off
Sale/
divestiture
New revenues
Closed modelOpen Innovation
business model
Cost & time savings
from leveraging
external development
Chesbrough, Henry William (2006). Open Business Models: How to thrive in the new innovation landscape. Boston: Harvard Business
School Press. pg. 17.
Open Source Software
http://www.catb.org/~esr/writings/cathedral-bazaar/magic-cauldron/
Magic Cauldron Essay
Use-Value Funding Models
• Cost-Sharing
• Risk-Spreading
Indirect Sale-Value Models
• Loss-Leader/Market Positioner
• Widget Frosting
• Give Away the Recipe, Open a Restaurant
• Accessorizing
• Free the Future, Sell the Present
• Free the Software, Sell the Brand
• Free the Software, Sell the Content
Open Source Software
System integrators sell a stack of
hardware, software, and services.
Integrators can charge customers similar
prices even if they use open source software.
How does business model
change if you use open source
software?
Dirk Riehle. “The Economic Motivation of Open Source Software: Stakeholder Perspectives.” IEEE Computer, vol. 40, no. 4 (April 2007).
Page 25–32. The paper is available as a PDF file as well as online. © 2007 IEEE.
Free + Open
• A portion of your business has a free layer and a
layer that generates money.
• Free reduces friction and lowers the cost of entry
• Try before buy.
• Generating money generally involves figuring out
pain points and placing a lot of services and options
for reducing pain in area between free and paid.
• Open allows customers/users to customize, localize,
personalize and improve what you are offering – to
the benefit of all.
Your Business In The WE-Economy
The levels of user
engagement in value
creation follow a long
tail.
At one end of the
scale are lots of
users contributing a
bit of feedback — at
the other end are a
few super-users co-
creating products as
experts.
What’s new is that
companies are
opening to input, and
that customers are
willing and able to
participate to a
greater extent.
Implications for
your business?Your Business In The WE-Economy
http://we-economy.net/?page_id=928
Open Source Software
Dirk Riehle. “The Economic Motivation of Open Source Software: Stakeholder Perspectives.” IEEE Computer, vol. 40, no. 4 (April 2007).
Page 25–32. The paper is available as a PDF file as well as online. © 2007 IEEE.
Switching to open source software can
result in more customers and higher profits.
How does business model
change if you use open source
software?
Free + Open
• Lets you rapidly penetrate market and generate
market awareness
• Increases your market reach and customer base
• Inputs vs outputs
• Central vs. peripheral
• Authoring vs. remix focus
• Reuse downstream vs reuse upfront
• Solo business model vs. partner based business
model
If what you have is good, just give it time. "Viral" growth is exponential, but it can take a while.
Or you can use advertising to artificially direct audience attention to something they wouldn't
care about otherwise. If the work is not good, interest will drop off when advertising does.
Understanding Free Content by Nina Paley
http://questioncopyright.org/understanding_free_content
What does Nina Paley do?
https://thenounproject.com/
Creating, Sharing and Celebrating the World’s Visual Language
Many cultural institutions hold material that is in the public domain. This does not mean that they also have
to publish it for free. The Rijksmuseum has, like most art museums, an image bank where they sell digital
copies of images. When at the end of 2011 they started releasing images, they offered two sizes. The
medium quality image (.jpg, 4500x4500, +/- 2MB) was available free to download from their website
without any restrictions. When the user clicked on the download button, a pop‐up asked the user to
attribute the Rijksmuseum as a courtesy. If the user was looking for the master file (.tiff and up to 200MB)
they were charged €40.
Democratising the Rijksmuseum by Joris Pekel, Europeana Foundation
http://pro.europeana.eu/files/Europeana_Professional/Publications/Democratising%20the%20Rijksmuseum.pdf
What does Rijksmuseum do?
€181,000 revenue is quite high, but represents only 0.2% of the total revenue of the
Rijksmuseum during that period. Total employee costs were about €100,000 per year.
In October 2013 the Rijksmuseum decided to no longer charge for public domain images that
were already digitised and started releasing their highest quality images for free. They
preferred instead to focus their efforts on generating project funding from art foundations in
order to digitise an entire collection. Such administrative costs are much lower, as a
transaction is only made once and is a lot easier to handle than multiple private individuals.
For the Rijksmuseum the revenue from image sale was relatively small and they decided to
abandon it all together as a way to create more goodwill, get more people familiar with their
collection and attract them to come to the museum.
Democratising the Rijksmuseum by Joris Pekel, Europeana Foundation
http://pro.europeana.eu/files/Europeana_Professional/Publications/Democratising%20the%20Rijksmuseum.pdf
https://www.rijksmuseum.nl/en
In October 2014, Flickr announced a new service that allows its members to order printed photos on wood
or canvas, choosing either from their own photos, from a set of curated images, or from about 50 million
CC BY or CC BY-SA–licensed images. Flickr would share profits with the photographers of the curated
images, but not the CC-licensed ones, as those licenses permit Flickr to use the photos commercially.
Creators with copyrighted images are compensated 51% of what Flickr collects. Flickr keeps 100% of the
proceeds from the CC licensed images.
https://www.flickr.com/create
Public Reaction
Generosity taken advantage of unfairly.
Flickr adding little value add & exploiting photographers.
CC photographers could have kept their images to themselves and
gotten half of the fee, instead of Flickr taking all of it.
Demotivating/deincentivizing to people who share their work.
Not legally obligated, but social obligation?
What would you do?
What We’ve Learned So Far
1. CC licensing doesn’t have much in common with the
sharing economy – only similarity is making better
use of existing resources
2. Open business models generally have a deeper
motivation beyond maximizing profit
3. Successful open businesses usually have a
compelling social mission. Akin to fair trade or Leeds
building. Establish themselves as social enterprises
and BCorps.
4. Open businesses usually have an engaged
community contributing to the success of the
business.
5. Often crowdsource content and/or marketing
Things We’ve Learned So Far
6. Share rewards and financial returns with their
community
7. Maximize abundance – eliminate artificial scarcity.
8. Traditional market economics aren’t a good fit.
9. Gifts rather than commodities.
10.Use multiple means of open.
470 co-authors from 45 countries
Used globally by startups and big corporations.
Start with - What is a business model?
Business Model Building Blocks
Business Model Generation Canvas
licensed CC BY-SA
Open Business Model Canvas Remix
Open Business Model Building Block Questions
https://docs.google.com/drawings/d/1zkAYPAhEh0TMYxgdExIiVDq8UTZX3WZ9mfB-22Gw5HY/edit
Design your open business model
Using open business model canvas design:
• Customer segments: Who are the customers you are
targeting or intending to serve through OERu?
• Value proposition: What value proposition are you
providing each customer? What are the bundles of
products and services you are offering and what
customer needs do they fulfill?
• Social good: What social good is being generated
(beyond revenue or profits)
• Revenue: What revenue will be generated through your
business activities? How will customers pay? How much
will they pay? Will this fund your activities?
Designing OERu Business Model Designs
Share initial designs
Common replicable models?
Open business model gallery
Paul Stacey
Creative Commons
web site: http://creativecommons.org
e-mail: [email protected]
blog: http://edtechfrontier.com
presentation slides: http://www.slideshare.net/Paul_Stacey
News: http://creativecommons.org/weblog
Facebook: https://www.facebook.com/creativecommons
470 co-authors from 45 countries
Used globally by startups and big corporations.
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