The Idea

The Ethic of Open Business
Open Business describes a particular way of doing business online, which includes giving away or making available some degree of content or services for free. The business value of these models lies in producing revenues through associated services or in an adding value to the free product or service.

But if a crucial characteristic of Open Business is to give some, if not all, of your content away for free (as in free beer), then what kind of business is that? The first step to understanding how Open Business can be successful is to comprehend the type of entrepreneur who pursues such a strategy. The cynics might ask if he is independently wealthy and does not need to be as exploitative as other businessmen, whether he sees his business as a mere hobby, or if he is simply not interested in making money.

We argue that the Open Business entrepreneur does not need be any of these things. Today we are witnessing a shift towards doing business differently. Objectives are changing and there seems to be a new combinations evolving between paid and unpaid work, sharing content and services, building on the work of others, and the desire to have an income.

In some regards this challenges an underlying assumption of traditional economics: that of the self-interested individual driven by the sheer calculating desire to amass wealth above all else. Yet, this paradigm doesn’t explain why individuals are happy to share information and content, build software for free, and contribute their time and energy freely to projects like Wikipedia.

It seems evident that non-monetary forms of compensation play an important role in this context. Soft forms of compensation like increasing ones reputation, higher satisfaction, and identification within a community seem to play an important role in motivating individuals to engage in non-monetary transactions. Yet, this explanation is also insufficient. If we follow this chain of thought, then we would arrive at an economic model that relies on a society of hobbyists.

Our working hypothesis is different: An Open Business entrepreneur balances the need to make money with higher professional satisfaction and more socially optimal ways of doing business. Often giving something away for free is the basis of an Open Business model, rather than making it scarce, controlled and expansive. In this sense Open Business entrepreneurs are realising that collaboration, sharing, and giving can be economic activities, while they are at the same time a cultural and social form of interaction.

Open business is designed to help the little guy along on his journey to spread his idea while creating revenues in the process. In order to sustain a rich innovative global community, access to information and ideas is requisite. The goal of open business is to analyze and explain models by which people can share their knowledge and creativity with others guided by the aligned incentives of profit, individual success, and societal advancement. The operating ethic transcends zero sum capitalism to create opportunities of mutual gain for the individual and her subscribers alike. By granting increased levels of access to information, innovators; be they writers, musicians, computer programmers, journalists, or any form of consultant under the sun, can reap the benefits of advertising their product in a way that is infinitely more pure and true than any thirty second television spot: by allowing the genius of their creativity to sell itself to the customer through use.