The Globe and Mail has covered the recent launch of Lawrence Lessig’s new book Free Culture: How Big Media Uses Technology and The Law to Lock Down Culture and Control Creativity. The book is available free for non-commercial purposes under a Creative Commons license. Since the online book launch, volunteers have already created audio versions of each chapter, also available for free non-commercial use.
This story follows on the heals of a Canadian federal court ruling that making files available for sharing on the Internet does not constitute copyright infringement. However, big media would have you believe that making content available for free has a detrimental affect on sales. This assumption has been proven incorrect by a recent Harvard Business School study, showing that the number of music file downloads has no relation to in-store CD sales.
The real story here is that the Internet has turned traditional business assumptions upside down. According to McLuhan’s laws of media, every technology has unexpected, and unintended, effects on its users (Extend, Obsolesce, Retrieve, Reverse). Lessig will sell more copies of his book because it is available online for free. This is especially true in his case, because the book is about digital copyright issues. Lessig has not given up his commercial rights, but he has created a legion of potential book buyers, without an expensive marketing campaign.
The lesson for businesses is that you had better understand the medium, and especially its effects, before it flips your business model around. The open source model, applied to open content, can actually be a financially solid business model. Think of it as the whistle-blow of the cluetrain 😉
A recent report on The elearning Sector in BC provides a marketing strategy for the industry. The report covers Global Trends and Market Opportunities; some regional comparisons and strengths and weaknesses. The key recommendations made in the report are:
To grow effectively, we recommend that companies:
1. Focus on the United States and Canada.
2. Target three to five vertical sectors, like the Olympics, rural communities, the federal government, healthcare, oil and gas and resource sectors.
3. Consider e-Learning opportunities related to gaming and simulations in the longer term.
4. Look at international markets in three to five years.
Industry associations and post-secondary institutions can support the growth of the sector, through education and research. Governments can provide ongoing support for industry-wide marketing, along with sponsoring further industry research and related policy development.
These recommendations could work for other North American regions, such as Silicon Valley, Ontario or New Brunswick. In BC’s case, the industry is even more fragmented than New Brunswick, but there is more access to larger firms (as clients or for sub-contracting) in BC than here in Atlantic Canada. One of New Brunswick’s advantages, of having one third of its population French-speaking, is quite unique when compared to BC. This advantage has yet to be translated into business success.
Many regions are looking for a way to capitalize on Canada’s perceived leadership in elearning. Like any other industry, success will come with the best business model, that is vigorously implemented, at the right time.
Via Rob Paterson, more on the future of work and business models, with an in-depth paper by George Defermos on the Networked Organisation. From the abstract:
This paper examines the latest of paradigms – the Virtual Network(ed) Organisation – and whether geographically dispersed knowledge workers can virtually collaborate for a project under no central planning. Co-ordination, management and the role of knowledge arise as the central areas of focus. The Linux Project and its development model are selected as a case of analysis and the critical success factors of this organisational design are identified …
This is an excellent synthesis of the rise of the corporate, command and control model, looking at the models of Taylor, Ford and moving on to the work of Senge. Defermos then goes on to a case study of Linux, compared to its competior – Microsoft. Defermos shows that the virtual organisation, as he defines it, is better suited for certain tasks than a centralised structure.
The virtual organisation may be best –
1. When there is a desire for standardisation, in order to increase innovation.
2. To ?ï¿½ï¿½Ç¨?ï¿½dethrone a product or vendor?ï¿½ï¿½Ç¨ï¿½ï¿½ with monopolistic tendencies.
3. To maximise the market web and share in the profits.
4. When all vendors need the end-users’ input.
5. To discourage ?ï¿½ï¿½Ç¨?ï¿½corporate backstabbing?ï¿½ï¿½Ç¨ï¿½ï¿½.
6. When the project is extremely complex.
It doesn’t seem that the networked virtual organisation will replace the centralised corporation, but it I’m sure that we will see more and more of these project-oriented organisations in this networked world.
Yesterday I wrote about Tom Malone’s new book "The Future of Work". Coincidentally, Jay Cross was at IBM’s Almaden Institute yesterday and posted this report on Tom’s book and IBM’s research efforts.
Flexible business solutions. The ability to grow organically. The capacity to respond to change in real time. A dynamic business and technical environment. A model that applies to all layers of the stack: systems, apps, and business. Shared processes. Loose coupling. Business objects. More intelligent businesses. Like a fractal patter, the model works at any scale: departmental, enterprise, or ecosystem.
It’s complete with diagrams which are very helpful. Thanks Jay.
Knowledge@Wharton has a recent article [requires free subscription] on start-ups and cooperation. According to David Hsu, co-author of "When Does Start-up Innovation Spur the Gale of Creative Destruction", some industries are more open to collaborative efforts between start-ups and established players. The key factors being:
1) the strength of the startups?ï¿½ï¿½Ç¨ï¿½Ñ¢ intellectual property rights; 2) whether they have relationships with intermediaries such as venture capitalists; and 3) whether their industry requires big investments in things such as manufacturing and distribution.
The biotech sector is described as an optimal industry for cooperation, but I’m wondering if our e-learning sector is also one. I would guess that intellectual property rights would be strongest for the technology companies ?ï¿½ï¿½Ç¨ï¿½ï¿½ï¿½ especially those with something unique. Now in the e-learning business there is not a lot of unique technology. One LCMS is similar to another, and there are many synchronous environments as well. A start-up that launched something like Groove, with few existing competitors, would have better chances of cooperation with the big guys. Now for point 2, the e-learning industry in New Brunswick does not have access to much VC financing, which is why the government plays that role. On point 3, the e-learning industry is OK, because there is not a lot of infrastructure necessary, mostly good people.
So it seems that, according to Hsu, the e-learning sector in NB could be fertile ground for cooperation between companies. A recent article on the industry in New Brunswick lists the cooperative environment as one of its strengths. For a region with many small companies, and few large ones, Hsu’s cooperative model may provide more impetus for growth.
I’ve written a bit about the need for business models that are more flexible than the industrial age corporation. An effort to look at the future of work organisational models has been going on at MIT since the mid-1990’s. in 1999 the team at MIT wrote a manifesto on the changes needed for future work structures. They called for the creation of organisations that are environmentally, socially and personally sustainable.
Thomas Malone, author of the forthcoming book "The Future of Work," has been involved with the Inventing the Organizations of the 21st Century initiative at MIT, and in a recent interview talks about open source as a good busines model for the future, and applauds the success of e-Bay.
Malone also explains that all new work models have resulted from improved communications systems.
We?ï¿½ï¿½Ç¨ï¿½Ñ¢re now in the early days of the third stage ?ï¿½ï¿½Ç¨ï¿½ï¿½ï¿½ transitioning from business kingdoms to business democracies. Much more decentralized decision-making is now possible because communication is so cheap. We can afford to have vastly greater numbers of people well-enough informed that they can make a lot more decisions for themselves, decisions that, in the past, were only possible in central offices.
Decentralisation is becoming a fact, but whether it will result in environmentally, socially and personally sustainable organisations, remains to be seen. I guess it’s up to us. I look forward to reading Malone’s new book.
I’m exploring business models in my own work. I have been a full-time employee for most of my working career. Now I run my own consultancy and I am the director of education of a non-profit organisation, the Atlantic Wildlife Institute, which from time to time has opportunities for paid work. I am also affiliated with other individual knowledge workers, and we share in projects that we cannot do alone. The sub-contracting model, which I have also worked under, is much less satisfying ?ï¿½ï¿½Ç¨ï¿½ï¿½ï¿½ intellectually and financially. I’m not sure which business model will be best in the long-run, but if I did not work for myself, I would not be able to stay in this town. There are no ?ï¿½ï¿½Ç¨?ï¿½jobs?ï¿½ï¿½Ç¨ï¿½ï¿½ for me here.
Business models come in varying sizes. Rob Paterson explores open source as a potential new business model. He sees the need for a new metaphor to replace the old one of the corporation. For instance:
A corporation that had as its purpose the need to serve its physical community would I suspect be transformed immediately. For instance, what if we had a corporation on PEI whose goal was to supply all Islanders with renewable energy at prices that were competitive or better than fossil fuel? Imagine generations of Islanders working to truly serve our own society?
I’ve been thinking about business and organisational models as I watch our downtown core change. We have about five empty storefronts within a one block radius of the only street light. These are small businesses that have recently been forced to close. When I talk to people in town, the general feeling is that we need more companies to set up business in town. This seems like business planning through wishful thinking – "Let’s have a corporation move in and look after us". People want corporations to move here, because corporations are what they know. No one is saying that we should create a commune, a co-operative, a node, or a network – because these are unknown. There are few models to create these, and fewer still that are recognised by the banks.
So maybe the problem is the corporate model that governments, individuals and corporations take for granted. Corporations have the access to financial capital that is necessary for new ventures. Most individuals do not. The problem may not be the economy, it may be the tools and models we use to make it work. As I have posted before – what if every individual had the rights of the Corporation? Would this help us to create more sustainable and community-friendly business models?
A recent report by the Rand Corporation The 21st Century at Work: Forces Shaping the Future Workforce and Workplace in the United States is available for +300 PDF pages of reading pleasure. In the report, three factors affecting work are discussed ?¢‚Ç¨‚Äú demographic trends, technological advances and globalisation. The US workforce [read Canadian too] will not grow as quickly as it has in the past. Technology will continue to reshape production, jobs and organisations. There is a worldwide marketplace for goods, services and labour.
This is a comprehensive look at forces affecting labour, organisations, the nature of work and technology. This report combines what a lot of other reports have already mentioned and should be a good reference for the next year or two.
Some interesting extracts:
?¢‚Ç¨?ìJust as individualized medicine is envisioned as an outgrowth of biotechnology, individualized learning programs that are optimized for a given person?¢‚Ç¨‚Ñ¢s knowledge base and learning style are expected for the future. Such learning programs will become increasingly sophisticated over time with advances in hardware and software, including artificial intelligence, voice recognition and natural language comprehension.?¢‚Ç¨¬ù
?¢‚Ç¨?ìThese workers and others who increasingly interact in a global marketplace and participate in global work teams will also require the skills needed to collaborate and interact in diverse cultural and linguistic settings (Marquardt and Horvath, 2001). Individuals who can exploit diversity to generate new knowledge about customers, suppliers, products, and services will be more likely to succeed in a competitive global environment.?¢‚Ç¨¬ù
Rob Paterson is preparing a presentation discussing the state of food production on PEI. Doesn’t sound of interest to a learning technologies guy, but Rob is looking at systems and business models. Most businesses fail because they don’t have the right business model.
Rob talks about the need to understand the systems at play, and the changing business models in other sectors. I have just finished a project for the NB learning industry, where I was asked to analyse the current industry and make some recommendations about future efforts. There are many parallels in Rob’s post, which I encourage you to read. Rob cites e-Bay as a succesful business, along with Southwest Airlines, StarBucks, Dell and Wal*Mart. He states that all of these companies started in small towns, of which New Brunswick has many, and that they have created open systems focused on a community of customers.
How could the NB Learning Industry succesfully use this kind of business model? First, connect with small communities, because we understand their needs. Get away from the idea of making the big sale to a multinational corporation. Sell to other rural communities, because your customer support staff will relate to them. Create a sense of community, through open source software (another success), which is what many small organisations are using already. All of our companies are small, so let’s focus on small markets ?ï¿½ï¿½Ç¨ï¿½ï¿½ï¿½ lots of them. This doesn’t mean that we sell to small markets so that we can grow and then sell to ?ï¿½ï¿½Ç¨?ï¿½real?ï¿½ï¿½Ç¨ï¿½ï¿½ markets. It means that we stay focused on our core values and strengths, and relate to our markets one conversation at a time. We can become the e-Bay of learning opportunities by creating a real sense of community of small businesses, organisations and countries.
This post from the Shifted Librarian says it all, "We’re drowning in draconian copyright laws – help!"