Wired on OpenBusiness and Free Beer

Lawrence Lessig has written an article for Wired Magazine depicting the very cool Free Beer project as a significant example of an Open Business. Interestingly so he cites Richard Stallman criticism’ that the beer is merely defined by its creators as an Open Source Beer.
To Stallman being just “Open” is different to being “Free” as the former term does not ensure that basic freedoms – such as adaptation – are kept intact. This goes back to his well known differentiation between “Free Software” and “Open Source Software”.

Maybe this is something we should all start thinking about, when talking about Open Business, web 2.0, user generated media, co-creation, peer-economics and so forth.

Yes, user generated, web 2.0. type services are wonderful, but when does relying on users to build a money generating business become a new form of exploitation?

Larry mentions de.lico.us as a good example of an Open Business. But one could take a more critcial stance on this. And here is what could be called the paradox of democratic exploitation:
This service would not exist without its users, yet only one person has financially profited.
At the same time much like Wikipedia and Digg it relies on a hyperactive core of users. Yet, the guy who started de.lico.us. took private investment and then sold it to Yahoo. Is this all what users should get back: just a good service?

I think we should also start thinking about legal and financial instruments supporting the growth of services based on peer-producation. Why should a community that through sharing of resources – time, information etc – makes a service valuable not have a real stake?

Below you find an excerpt of Larry’s article:

Copyright mavens will wonder if such a license could really work in the US (where recipes are not copyrightable). But that quibble has slowed neither this particular “open business” nor the movement of which it is a part. Indeed, we’re seeing an explosion of open source businesses. Some are about developing software, like the Firefox browser. Others simply leverage the model of free software to forge a different kind of business, from the wildly popular Web-tagging tool del.icio.us and the blog-tracking search engine Technorati to the extraordinarily successful video site Revver, which embeds an ad bug into freely licensed user-generated videos, then pays the users as the clips spread. All of these businesses build upon the value created by their users, while keeping that value free for others to build upon as well.

When we begin to look at the range of examples – OpenBusiness.cc has a prominent collection – we might learn something from the pattern. Some have already seen enough to publish their insights. The short list of these books is led by MIT professor Eric von Hippel’s Democratizing Innovation. Open source businesses, von Hippel explains, know that their customers are not idiots. These companies encourage customers to tinker with their products; they then learn from this tinkering how to make the products better. Yochai Benkler’s The Wealth of Networks places this commercial practice in a larger and perhaps more significant social context: Although peer production is profitable for business, writes Benkler, “we are in the midst of a quite basic transformation in how we perceive the world around us and how we act, alone and in concert with others.” What he calls nonmarket peer production is a critical part of this transformation. The trick is not making it happen, but making it flourish. And if my Wired boss, Chris Anderson, is right (and obviously, he must be) that we’ve entered the land of the long tail – where digital technology supports a massively more diverse range of products and models for production – then, as he puts it, making the consumer a producer is an excellent way to move a business up the long tail. In this model, free knowledge can drive a particular kind of free market – at least a kind that seems to flourish in a digital world.

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