[p2p-research] comments on open business models

[Michel Bauwens]

Dear friends,

I would appreciate any insight on the following excerpt, from Marcelo at the
CooperationCommons, which is a reaction to the model presented here at
http://blog.p2pfoundation.net/steve-bosserman-on-economic-sustainability-in-a-world-of-open-design/2008/02/19

My gut tells me that the current evolution renders moot a simple application
of the public/private goods dichotomy? Any comments?

Marcelo:

Well, I think the open/close/gratis/paid approach is good but not
enough. The problem appears when the entrepreneur have to choose which
of good will be the gratis and which good will be paid. In Internet
ventures one sees that some entrepreneurs give the wrong good gratis
and sells the wrong product and they fail or operates with high costs.

I think a better approach is the concept of public/private goods to
choose the product/service to be sold and the one to be shared. Even
though there is not perfect public/private goods, is a better approach
than purely open/close analysis.

As you surely know, in this approach, products/services are
categorized by its degree of excludability and scarcity.
then we have the following type of goods:

                        Excludable              Non-Excludable
Rivalry              Private goods          Commons goods

Non rivalry        Collective  goods      Public goods

A more complete explanation here:
http://en.wikipedia.org/wiki/Public_good

In my understanding a good entrepreneur should make the following
offering:

Private goods -> Sell,
Collective goods -> Sell,
Commons goods -> Give for free or charge taxes or subscriptions
Public goods -> give it gratis

For example a search engine provides by Google or any other supplier
is basically a database of web sites. In that sense, the fact that one
consults the database does not prevent that other does the same thing.
Therefore, there is not rivalry in that service. On the other hand and
theoretically, the fact that one consults the database does not reduce
the offer of the search engine (assuming infinite concurrency
capability of the database). In conclusion, a search engine is a
public good and it is recommendable to offer the service for free.

If you do the analysis for e-mail systems you can find that that
offering sounds like a private service. However, there are many
companies offer gratuitous e-mail accounts. Google, for example, found
the right solution to this problem, here the public good is the name,
if you want a free e-mail account, you have to use the domain
xxx at gmail.com, if you want your own domain, you have to subscribe in a
paid service.

In this model, the right combination of free and paid services is the
key to make business sustainable.

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