Peer to Peer As a new mode of production, governance, and property

The P2P ‘Tipping Point’ “ The most profound finding of the 2006 Edelman Trust Barometer is that in six of the 11 countries surveyed, the “person like yourself or your peer” is seen as the most credible spokesperson about a company and among the top three spokespeople in every country surveyed. This has advanced steadily over the past three years. In the US, for example, the “person like yourself or your peer” was only trusted by 22% of respondents as recently as 2003, while in this year’s study, 68% of respondents said they trusted a peer. Contrast that to the CEO, who ranks in the bottom half of credible sources in all countries, at 28% trust in the US, near the level of lawyers and legislators. In China, the “person like yourself or your peer” is trusted by 54% of respondents, compared to the next highest spokesperson, a doctor, at 43%. "only 13% of consumers say they buy products because of their ads. Contrast that to 60% of small business owners in North America that say they use peer recommendations to make their buying decisions and over 70% of 18-35 year olds who report the same for their media purchases."

“ The most profound finding of the 2006 Edelman Trust Barometer is that in six of the 11 countries surveyed, the “person like yourself or your peer” is seen as the most credible spokesperson about a company and among the top three spokespeople in every country surveyed. This has advanced steadily over the past three years.

In the US, for example, the “person like yourself or your peer” was only trusted by 22% of respondents as recently as 2003, while in this year’s study, 68% of respondents said they trusted a peer. Contrast that to the CEO, who ranks in the bottom half of credible sources in all countries, at 28% trust in the US, near the level of lawyers and legislators. In China, the “person like yourself or your peer” is trusted by 54% of respondents, compared to the next highest spokesperson, a doctor, at 43%.

"only 13% of consumers say they buy products because of their ads. Contrast that to 60% of small business owners in North America that say they use peer recommendations to make their buying decisions and over 70% of 18-35 year olds who report the same for their media purchases."

Understanding P2P Part 1: Understanding P2P Part Two:P2P Business Models Part Three: P2P and the Market Part Four: Civilizational Politics of P2P

Part 1: Understanding P2P

Part Two:P2P Business Models

Part Three: P2P and the Market

Part Four: Civilizational Politics of P2P

1. Understanding P2P P2P is the relational dynamic at work in distributed networks Hierarchical, de-centralized networks, distributed networks

P2P is the relational dynamic at work in distributed networks

Hierarchical, de-centralized networks, distributed networks

Complexity and Hierarchy

Levy: from the molar to the molecular Archaic Molar Molecular Life Natural Selection (natural time) Artificial Selection (generational time) Genetic splicing (real-time) Matter Mechanical (outside) Thermo- Dynamic (Warming) Nanotech (cold) Information Somatic (co-presence) Mediatic (mass) Digital Human Groups Organic Organiza-tional Self-organized

Usage of P2P depends on consciousness

P2P as technological infrastructure

Web 2.0 Timeline

P2P as Technological Infrastructure Point to Point infrastructures for P2P communication: internet, web, IM, filesharing, grid computing A Read/Write infrastructure for autonomous publication and distribution: blogging, podcasting, webcasting An infrastructure for glocal cooperation: Wiki’s, Social Software, Web 2.0., creating the capacity to GLOBALLY SCALE GRANULAR PRODUCTION

Point to Point infrastructures for P2P communication: internet, web, IM, filesharing, grid computing

A Read/Write infrastructure for autonomous publication and distribution: blogging, podcasting, webcasting

An infrastructure for glocal cooperation: Wiki’s, Social Software, Web 2.0., creating the capacity to GLOBALLY SCALE GRANULAR PRODUCTION

Web 2.0 and P2P In Web 2.0, the value is created by the user/participants: The Web 2.0 unlocks the ‘wisdom of crowds’ Web 2.0 tools enable that participation: The Web 2.0 renders data independent of the application; and applications independent of the program: mash-ups and open API’s Web 2.0 business models fund the participation through an attention economy, BUT, ‘there’s a price to be paid’ (implicit social contract)

In Web 2.0, the value is created by the user/participants: The Web 2.0 unlocks the ‘wisdom of crowds’

Web 2.0 tools enable that participation: The Web 2.0 renders data independent of the application; and applications independent of the program: mash-ups and open API’s

Web 2.0 business models fund the participation through an attention economy, BUT, ‘there’s a price to be paid’ (implicit social contract)

Web 2.0 Participatory Aspects Must allow for cooperation: blogs, wiki’s, forum Must allow for ‘participation capture’ and automatic archiving Must allow aggregate rating & reputation schemes Must allow affinity searching and recommendation schemes Must allow presentiality (buddy lists) Must allow cooperative contextuality building: social bookmarking, tagging Must allow remixing, re-use of content and services: widgets, mash-ups Web 2.0’s semi-openness

Must allow for cooperation: blogs, wiki’s, forum

Must allow for ‘participation capture’ and automatic archiving

Must allow aggregate rating & reputation schemes

Must allow affinity searching and recommendation schemes

Must allow presentiality (buddy lists)

Must allow cooperative contextuality building: social bookmarking, tagging

Must allow remixing, re-use of content and services: widgets, mash-ups

Web 2.0’s semi-openness

P2P Social Processes 1. The ability to produce in common: Peer Production as a third mode of production 2. The ability by participants to manage distributed projects by themselves: Peer Governance as a third mode of governance 3. The ability to protect the common project from private appropriation: Peer Property as a third mode of non-exclusionary property

1. The ability to produce in common: Peer Production as a third mode of production

2. The ability by participants to manage distributed projects by themselves: Peer Governance as a third mode of governance

3. The ability to protect the common project from private appropriation: Peer Property as a third mode of non-exclusionary property

“… .People would experience others as equals in the sense of their being both superior and inferior to themselves in varying skills and areas of endeavor (intellectually, emotionally, artistically, mechanically, interpersonally, and so forth), but with none of those skills being absolutely higher or better than others…” Jorge Ferrer The Revolution of Equipotentiality

Characteristics of Peer Production (1) No division of labour, but distribution of labour: equipotentiality No exclusivity, but inclusivity: anti-credentialism No composite tasks, but granular tasks: self-selection No products, but always unfinished ‘artefacts’

No division of labour, but distribution of labour: equipotentiality

No exclusivity, but inclusivity: anti-credentialism

No composite tasks, but granular tasks: self-selection

No products, but always unfinished ‘artefacts’

Characteristics of Peer Production (2) No a priori, but a posteriori distributed control: communal validation (collective choice systems, algorithms) No panoptism, but holoptism: participation capture, usage is production Not owned, but shared content

No a priori, but a posteriori distributed control: communal validation (collective choice systems, algorithms)

No panoptism, but holoptism: participation capture, usage is production

Not owned, but shared content

Conditions for Succes Benkler: 3 characteristics of successul group efforts: 1) must be modular. That is, they must be divisible into components, or modules, each of which can be produced independently of the production of the others. This enables production to be incremental and asynchronous, pooling the efforts of different people, with different capabilities, who are available at different times." 2.) “For a peer production process to pool successfully a relatively large number of contributors, the modules should be predominately fine–grained, or small size. This allows the project to capture contributions from large numbers of contributors whose motivation levels will not sustain anything more than small efforts toward the project ...." 3.) “... a successful peer production enterprise must have low–cost integration, which includes both quality control over the modules and a mechanism for integrating the contributions into the finished product, while defending “itself against incompetent or malicious contributors .

Benkler: 3 characteristics of successul group efforts:

1) must be modular. That is, they must be divisible into components, or modules, each of which can be produced independently of the production of the others. This enables production to be incremental and asynchronous, pooling the efforts of different people, with different capabilities, who are available at different times."

2.) “For a peer production process to pool successfully a relatively large number of contributors, the modules should be predominately fine–grained, or small size. This allows the project to capture contributions from large numbers of contributors whose motivation levels will not sustain anything more than small efforts toward the project ...."

3.) “... a successful peer production enterprise must have low–cost integration, which includes both quality control over the modules and a mechanism for integrating the contributions into the finished product, while defending “itself against incompetent or malicious contributors .

Why is Peer Production Emerging Now? Yochai Benkler advances a powerful hypothesis, that lowering the capital requirements of information production 1. reduces the value of proprietary strategies and makes public, shared information more important, 2. encourages a wider range of motivations to produce, thus demoting supply-and-demand from prime motivator to one-of-many, and 3. allows large-scale, cooperative information production efforts that were not possible before, from open-source software, to search engines and encyclopedias, to massively multi-player online games.

Yochai Benkler advances a powerful hypothesis, that lowering the capital requirements of information production

1. reduces the value of proprietary strategies and makes public, shared information more important,

2. encourages a wider range of motivations to produce, thus demoting supply-and-demand from prime motivator to one-of-many, and

3. allows large-scale, cooperative information production efforts that were not possible before, from open-source software, to search engines and encyclopedias, to massively multi-player online games.

Peer Governance as 3 rd modality Conclusion: P2P is a third mode of production, governance, and property Centralized Hierarchy Decentralized Heterarchy Distributed Autonomy Economics Centralized Planning Market Peer Production Politics Absolute monarchy Separation of powers Peer Governance Property Collective State Private Exclusionary Common Inclusionary Peer Property

Conclusion: P2P is a third mode of production, governance, and property

The Evolution of Hierarchy (1) by John Heron Degrees of Moral Insight Relationship between hierarchy, cooperation, autonomy Premodern no rights of political participation Hierarchy defines, controls and constrains co-operation and autonomy Early Modern political participation through representation Hierarchy empowers a measure of co-operation and autonomy in the political sphere only Late Modern political representation with varying degrees of wider participation Hierarchy empowers a measure of co-operation and autonomy in the political sphere and in varying degrees in other spheres P2P Era equipotential rights of participation of everyone in every field The sole role of hierarchy is in its spontaneous emergence in the initiation and continuous flowering of autonomy-in-co-operation in all spheres of human endeavor

Evolution of Hierarchy (2): Power Premodern era: custom and force: “ Make die, and let live” Early modern era: disciplinary societies “ Make live and let die” Late modern era: control societies “ control the desire; a posteriori control, the metaphor of the elastic” P2P era: reputation societies?

Premodern era: custom and force:

“ Make die, and let live”

Early modern era: disciplinary societies

“ Make live and let die”

Late modern era: control societies

“ control the desire; a posteriori control,

the metaphor of the elastic”

P2P era: reputation societies?

Evolution of Hierarchy (2): Power Period Machine Dates Diagram Manager Consciousness (Agency of) Sovereign Society (make die, Let live) Mechanical 1757 Centralization Hierarchy Monarchy Disciplinary Society (let die, make live) Thermodyna -mics 1844 (telegraph) Decentralization Bureaucracy Separation/ balance of powers Control Society Cybernetics (computers) 1954 Distribution Protocol Organized civil society (NGO) Collective Intelligence Society Internet/Web 1994 P2P Transparency Peer Circles

Evolution of Cooperation “it’s no longer about incentives, but about removing impediments” Time frame Typology => Cooperation & Motivation Formats Game Typology Quality of Cooperation Pre-modern (feudal, imperial) Adversarial Extrinsic negative Zero Sum: Win-Lose “ Power Game ” Low, 1+1<2 Modern (market, industrial) Neutral Extrinsic positive Zero Sum: Win-win: Draw “ Money Game ” Average, 1+1=2 P2P era Synergistic Intrinsic positive The 4 wins “ Wisdom Game ” High, 1+1>2

P2P as a new way of working A few people do all the work Many people do a little of the work You have to pay all of them You don’t have to pay most of them It’s hard to get involved It’s easy to get involved Support from people you know Support from a legion of strangers

Typology of Peer Governance 1. The forms of peer governance of open/free communities and peer production groups: adhocracy 2. The forms of governance/ownership/income distribution for the derived and monetizable service and market-oriented production models that derive from commons-related projects (formal modes of capital and IP ownership) 3. Choice from wide selection of governance and institutional formats for peer projects. Plug-and-play management models 4. Political governance models for the whole of society that are inspired by peer to peer models or principles: peer governance supplements and informs/re-forms representative democracy 5. Political theories and movements inspired by the P2P ethos KEY ISSUE: boundary between peer governance and ‘representational’ democratic rules

1. The forms of peer governance of open/free communities and peer production groups: adhocracy

2. The forms of governance/ownership/income distribution for the derived and monetizable service and market-oriented production models that derive from commons-related projects (formal modes of capital and IP ownership)

3. Choice from wide selection of governance and institutional formats for peer projects. Plug-and-play management models

4. Political governance models for the whole of society that are inspired by peer to peer models or principles: peer governance supplements and informs/re-forms representative democracy

5. Political theories and movements inspired by the P2P ethos

KEY ISSUE: boundary between peer governance and ‘representational’ democratic rules

Characteristics of P2P Hierarchy Usually consists of a core leadership embodying the original aims of the project, sometimes - the ‘benevolent dictator’ Linux: coders – trusted Lieutenants – Linus Torvalds Wikipedia: contributors – core editors – Jimmy Wales Teams are led by flexible meritocratic leaders: jazz band logic Principle of non-dependence or reverse dependence Large projects are led by a non-profit foundation - possibility of corporate spin-offs

Usually consists of a core leadership embodying the original aims of the project, sometimes - the ‘benevolent dictator’

Linux: coders – trusted Lieutenants – Linus Torvalds

Wikipedia: contributors – core editors – Jimmy Wales

Teams are led by flexible meritocratic leaders: jazz band logic

Principle of non-dependence or reverse dependence

Large projects are led by a non-profit foundation - possibility of corporate spin-offs

How To Spot A Successful Open Source Project Community: A handful of lead developers, a large body of contributors, and a substantial--or at least motivated--user group offering ideas. Disruptive goals: Does something notably better than commercial code. Free isn't enough. A benevolent dictator: Leader who can inspire and guide developers, asking the right questions and letting only the right code in. Transparency: Decisions are made openly, with threads of discussion, active mailing list, and negative and positive comments aired. Civility: Strong forums police against personal attacks or niggling issues, focus on big goals. Documentation: What good's a project that can't be implemented by those outside its development? Employed developers: The key developers need to work on it full time. A clear license: Some are very business friendly, others clear as mud. Commercial support: Companies need more than email support from volunteers. Is there a solid company employing people you can call?

Community: A handful of lead developers, a large body of contributors, and a substantial--or at least motivated--user group offering ideas.

Disruptive goals: Does something notably better than commercial code. Free isn't enough.

A benevolent dictator: Leader who can inspire and guide developers, asking the right questions and letting only the right code in.

Transparency: Decisions are made openly, with threads of discussion, active mailing list, and negative and positive comments aired.

Civility: Strong forums police against personal attacks or niggling issues, focus on big goals.

Documentation: What good's a project that can't be implemented by those outside its development?

Employed developers: The key developers need to work on it full time.

A clear license: Some are very business friendly, others clear as mud.

Commercial support: Companies need more than email support from volunteers. Is there a solid company employing people you can call?

What with the Power Law? The Power Law &quot;In systems where many people are free to choose between many options, a small subset of the whole will get a disproportionate amount of traffic (or attention, or income), even if no members of the system actively work towards such an outcome. The very act of choosing, spread widely enough and freely enough, creates a power law distribution.&quot; The Dunbar Number Counteracting the Power Law? It does not always apply (Krebs studies) Open communities show better spread Knowing networks can be designed to foster diversity, autonomy, openness Towards Value-conscious design

The Power Law

&quot;In systems where many people are free to choose between many options, a small subset of the whole will get a disproportionate amount of traffic (or attention, or income), even if no members of the system actively work towards such an outcome. The very act of choosing, spread widely enough and freely enough, creates a power law distribution.&quot;

The Dunbar Number

Counteracting the Power Law?

It does not always apply (Krebs studies)

Open communities show better spread

Knowing networks can be designed to foster diversity, autonomy, openness

Towards Value-conscious design

Peer Property Universal common property regimes are different from private property and public collective property Individual authorship + share-alike + free distributed access Examples: 1) Creative Commons for individual expression and sharing; 2) GPL for creations of ‘Commons’

Universal common property regimes are different from private property and public collective property

Individual authorship + share-alike + free distributed access

Examples: 1) Creative Commons for individual expression and sharing; 2) GPL for creations of ‘Commons’

Physical vs. Information Commons Traditional Commons Information Commons Type of Resource Rival Non-rival & Anti-rival Scope Local Non-local Actors Territorial Groups Global Affinity Groups Governance Communities Cyber Collectives

The Circulation of the Common Peer production needs open and free access to the raw material for its production: open/free paradigm and movements Peer Governance is the participatory process for the production of the common: the participatory/cooperation paradigms and movements “ when costs of participation are low enough, any motivation may be sufficient to lead to a contribution.” Peer Property uses new legal and institutional formats to protect its production: the Commons-based paradigms and movements The Common Property format creates open/free raw material: the viral circle spirals onward

Peer production needs open and free access to the raw material for its production: open/free paradigm and movements

Peer Governance is the participatory process for the production of the common: the participatory/cooperation paradigms and movements

“ when costs of participation are low enough, any motivation may be sufficient to lead to a contribution.”

Peer Property uses new legal and institutional formats to protect its production: the Commons-based paradigms and movements

The Common Property format creates open/free raw material: the viral circle spirals onward

Part Two: P2P Business Models PRECONDITIONS FOR PEER PRODUCTION: Abundance/Surplus/Distribution of intellect Abundance/Distribution of the means of information production and sharing Lowering of ‘need for capital’, which becomes a posteriori, not a priori condition for success; entrepreneurship is divorcing from capitalism Conclusion: the treshold of participation, i.e. the capability to bypass centralized capital outlays is diminishing in human, physical and financial capital

PRECONDITIONS FOR PEER PRODUCTION:

Abundance/Surplus/Distribution of intellect

Abundance/Distribution of the means of information production and sharing

Lowering of ‘need for capital’, which becomes a posteriori, not a priori condition for success; entrepreneurship is divorcing from capitalism

Conclusion: the treshold of participation, i.e. the capability to bypass centralized capital outlays is diminishing in human, physical and financial capital

Why P2P will grow For Profit For Benefit Immaterial production Material production

Conditions for expansion of ‘physical’ peer production The ‘distribution of everything’: further distributive advances in financial and industrial capital Desktop manufacturing, fabbing, multi-purpose machinery, implications of nanotech/biotech for distributed production Separating the design and material production phase of the industrial process: open design communities with built-only markets Finding integrated processes for the physical, logical, and digital ‘commons’ (e.g. Semapedia, German White Bicycle program, Bookcrossings)

The ‘distribution of everything’: further distributive advances in financial and industrial capital

Desktop manufacturing, fabbing, multi-purpose machinery, implications of nanotech/biotech for distributed production

Separating the design and material production phase of the industrial process: open design communities with built-only markets

Finding integrated processes for the physical, logical, and digital ‘commons’ (e.g. Semapedia, German White Bicycle program, Bookcrossings)

Striking a Critical Balance between Giving It Away and Making Money… Portfolio Free Open Paid Closed No Source Code Included No Charge for Software No Source Code Included Charge for Software Includes Source Code Charge for Software Source Code Included No Charge for Software Gratis $$$ Assets Practices … And Utilizing a Sound Business Model to Stay on Track Differentiated Value Common Value

User Innovation 1 The Democratization of Innovation means that users of products and services, both firms and individual users, are increasingly able to develop what they need for themselves. Manufactured-Innovation means that firms develop innovations at private expense, then sell it. User-Innovation means that lead users develop innovations that they need, then make it freely available. Lead users foreshadow a more general demand. But the concept should not obscure the fact that many users innovate, and that such innovation is distributed amongst different players offer incremental parts of the solution. Commercialisation phase should not obscure the fact that user innovation communities can bypass manufacturers altogether. Example: Kite-building communities; Some firms are moving to 'build-only' formats, leaving innovation to the user communities.

The Democratization of Innovation means that users of products and services, both firms and individual users, are increasingly able to develop what they need for themselves.

Manufactured-Innovation means that firms develop innovations at private expense, then sell it.

User-Innovation means that lead users develop innovations that they need, then make it freely available. Lead users foreshadow a more general demand. But the concept should not obscure the fact that many users innovate, and that such innovation is distributed amongst different players offer incremental parts of the solution.

Commercialisation phase should not obscure the fact that user innovation communities can bypass manufacturers altogether. Example: Kite-building communities; Some firms are moving to 'build-only' formats, leaving innovation to the user communities.

The User Innovation Cycle 1) individual user develops innovation invention, prototyping phase 2) user diffuses innovation through networked media information diffusion phase 3) a community forms around it and develops a working prototype pre-commercial replication phase 4) a manufacturer may develop a commercial version adding some features commercial phase Examples: Examples: email, mountain bike, sports bra, desktop publishing, Gatorade, white-out liquid

1) individual user develops innovation

invention, prototyping phase

2) user diffuses innovation through networked media

information diffusion phase

3) a community forms around it and develops a working prototype

pre-commercial replication phase

4) a manufacturer may develop a commercial version adding some features

commercial phase

Examples: Examples: email, mountain bike, sports bra, desktop publishing, Gatorade, white-out liquid

The Laws of Asymmetric Competition 1. In a competition between a for-profit entity with closed proprietary strategies, and a for-benefit institution working with a community and a commons, the latter will tend to win out 2. In a competition between for profit companies, those using open/free, participatory, and commons oriented strategies will tend to win out

1. In a competition between a for-profit entity with closed proprietary strategies, and a for-benefit institution working with a community and a commons, the latter will tend to win out

2. In a competition between for profit companies, those using open/free, participatory, and commons oriented strategies will tend to win out

Participation as a competitive advantage “ Free”, as in free beer, as a competitive advantage Open source as a competitive advantage Open participation as a competitive advantage Co-evolving with a commons as a competitive advantage From Walled Gardens to Community Switching Costs

“ Free”, as in free beer, as a competitive advantage

Open source as a competitive advantage

Open participation as a competitive advantage

Co-evolving with a commons as a competitive advantage

From Walled Gardens to Community Switching Costs

Mixing Openness and Closedness Joe West: “ in standardization, firms face an inherent conflict between value creation and value capture. A completely open standard creates lots of value, none of which can be captured; a completely closed standard captures 100 percent of no value created. So a profit–maximizing firm must seek an intermediate point that partially accomplishes both goals. Thus to pay the bills, there has to be value capture somewhere: everything has some level of openness and some level of proprietary–ness. Typically, standards that are open in one area are often not open in another. ”

Joe West:

“ in standardization, firms face an inherent conflict between value creation and value capture. A completely open standard creates lots of value, none of which can be captured; a completely closed standard captures 100 percent of no value created. So a profit–maximizing firm must seek an intermediate point that partially accomplishes both goals.

Thus to pay the bills, there has to be value capture somewhere: everything has some level of openness and some level of proprietary–ness. Typically, standards that are open in one area are often not open in another. ”

The role of capital? The cost of starting an internet company have gone down by 80% over the last 8 years “ Companies no longer need to raise lots of cash, no longer need lots of people, no longer need to even directly sell anything at all to be considered successful. They need revenue, of course, but that's mainly through advertising. And they need to create something people want to use. But Super Bowl ads? Forget those. So there is plenty of money available -- nearly $1 trillion -- but it is coming at a time when, as I have just described, a whole new class of start-ups has appeared that doesn't want VC money -- at least not very much of it.” Conclusion: 1) emergence of ‘non-capitalist’ social entrepreneurs; 2) capital needed ‘a posteriori’, after prior success

The cost of starting an internet company have gone down by 80% over the last 8 years

“ Companies no longer need to raise lots of cash, no longer need lots of people, no longer need to even directly sell anything at all to be considered successful. They need revenue, of course, but that's mainly through advertising. And they need to create something people want to use. But Super Bowl ads? Forget those.

So there is plenty of money available -- nearly $1 trillion -- but it is coming at a time when, as I have just described, a whole new class of start-ups has appeared that doesn't want VC money -- at least not very much of it.”

Conclusion: 1) emergence of ‘non-capitalist’ social entrepreneurs; 2) capital needed ‘a posteriori’, after prior success

Modalities of Sharing

Types of individual engagement 1. The classical &quot;prosumer mode&quot; , in which everybody is working basically for themselves in using and customizing products 2. The Web 2.0 &quot;swarm mode&quot; in which people are loosely aggregated in doing things : “the strength of weak ties” 3. The &quot;community mode&quot; , production of common artefacts These three modes are pretty separated, but there is a &quot;hidden continuum&quot; structurally connecting them, they become &quot;mutual enablers&quot;.

1. The classical &quot;prosumer mode&quot; , in which everybody is working basically for themselves in using and customizing products

2. The Web 2.0 &quot;swarm mode&quot; in which people are loosely aggregated in doing things : “the strength of weak ties”

3. The &quot;community mode&quot; , production of common artefacts

These three modes are pretty separated, but there is a &quot;hidden

continuum&quot; structurally connecting them, they become &quot;mutual

enablers&quot;.

User vs. corporate typology Type of Users Type of Corporation Prosumer Mode Crowdsourcing Swarming Mode Platform Enablers Community Mode Commons-dependent

Types of Corporate Engagement Externalizers/Crowdsourcers: external producers are integrated in the corporate value chain Participation enablers (Web 2.0 paradigm): enable the loose interconnection of individuals; and monetize the common attention: Ebay Commons-dependent: corporations monetizing derivative value created by peer communities (FLOSS companies)

Externalizers/Crowdsourcers: external producers are integrated in the corporate value chain

Participation enablers (Web 2.0 paradigm): enable the loose interconnection of individuals; and monetize the common attention: Ebay

Commons-dependent: corporations monetizing derivative value created by peer communities (FLOSS companies)

Corporate Co-Creation Strategies The Direct Economy Model of Xavier Comtesse Passive consumption : The consumer is getting products or services with no real interaction and no real choice. He has to take whatever is available. Self Service : The consumer is now given the ability to choose between various products or services. This first step is already a huge step forward, as the consumer can go around the vendor to pick and choose what he wants. DIY: Do It Yourself : At this level, the consumer starts getting involved in the value chain. This is what IKEA offers, where you are not just buying a product, you are actually also delivering it to your home and building it yourself. This case is an example of the first disruption from the standard retail value chain. Co-design : At this level, the consumer starts adding value by customizing the product and therefore defining his needs himself (as opposed to buying a product defined by the product management team). This is what Dell is asking from customers when they have to pick and choose options to build a computer. Co-creation : This is the ultimate level of involvement, where the consumer is actually involved in the design of the product or service itself. This is what Open Source does for developers, and what Wikipedia does for knowledge consumers. Similarly Procter and Gamble has a “Connect and Develop” program that lets innovators define products.

The Direct Economy Model of Xavier Comtesse

Passive consumption : The consumer is getting products or services with no real interaction and no real choice. He has to take whatever is available.

Self Service : The consumer is now given the ability to choose between various products or services. This first step is already a huge step forward, as the consumer can go around the vendor to pick and choose what he wants.

DIY: Do It Yourself : At this level, the consumer starts getting involved in the value chain. This is what IKEA offers, where you are not just buying a product, you are actually also delivering it to your home and building it yourself. This case is an example of the first disruption from the standard retail value chain.

Co-design : At this level, the consumer starts adding value by customizing the product and therefore defining his needs himself (as opposed to buying a product defined by the product management team). This is what Dell is asking from customers when they have to pick and choose options to build a computer.

Co-creation : This is the ultimate level of involvement, where the consumer is actually involved in the design of the product or service itself. This is what Open Source does for developers, and what Wikipedia does for knowledge consumers. Similarly Procter and Gamble has a “Connect and Develop” program that lets innovators define products.

Autonomy in Production (1) The Direct Economy Model updated for peer production: Criteria 1: outside, or inside the market? Criteria 2: production of use value or production of exchange value Criteria 3: individually oriented, or community oriented

The Direct Economy Model updated for peer production:

Criteria 1: outside, or inside the market?

Criteria 2: production of use value or production of exchange value

Criteria 3: individually oriented, or community oriented

Autonomy in Production (2) The Direct Economy Model updated for peer production: Direct peer production of use value with no concern for monetization: the adventure economy of couchsurfing.com Direct peer production of use value with concern for equitable monetization: OS Alliance, ecopyleft, user ownership theory Direct production of use value by groups with commons-oriented business ecology Direct production of use value by individuals with monetization of attention through proprietary platforms Direct production of exchange value by groups: cooperative production Direct production of exchange value by individuals: minipreneurial ecology, social commerce, social retailing

The Direct Economy Model updated for peer production:

Direct peer production of use value with no concern for monetization: the adventure economy of couchsurfing.com

Direct peer production of use value with concern for equitable monetization: OS Alliance, ecopyleft, user ownership theory

Direct production of use value by groups with commons-oriented business ecology

Direct production of use value by individuals with monetization of attention through proprietary platforms

Direct production of exchange value by groups: cooperative production

Direct production of exchange value by individuals: minipreneurial ecology, social commerce, social retailing

Media Monetization Strategies Audience growth (N+1) = Attention Economy Metcalfe’s Law (N-square) = Transcational Multiplication, Social Commerce Reed’s Law (N-quadrupling) = Long Tail communities, Group-Forming Networks Van Till’s Law: what you can <do> in the groups is beyond measure

Audience growth (N+1) = Attention Economy

Metcalfe’s Law (N-square) = Transcational Multiplication, Social Commerce

Reed’s Law (N-quadrupling) = Long Tail communities, Group-Forming Networks

Van Till’s Law: what you can <do> in the groups is beyond measure

Media Monetization Strategies (2) Business Models: Advertizing, Freemium, Market Platform, Fundraising Advertizing models: Display (banners), Matching (Google), Sponsored Content, Social Media Presence

Business Models: Advertizing, Freemium, Market Platform, Fundraising

Advertizing models: Display (banners), Matching (Google), Sponsored Content, Social Media Presence

What does it mean for marketing? Differentiation according to polarity: emergence of community-oriented business models Social commerce, social retailing, affinity marketing Network facilitators, vendor relations management Zero-advertizing brands

Differentiation according to polarity: emergence of community-oriented business models

Social commerce, social retailing, affinity marketing

Network facilitators, vendor relations management

Zero-advertizing brands

Commons-dependent business strategies support seller revenue is generated by selling two broad categories of items -- physical goods and/or services that can be used to justify higher prices most if not all open source licences would work for this model 2. Loss leader/market positioner no charge open source product is used as a loss leader for traditional commercial software open source product generates little or no revenue part customers are attracted for other products sold using the traditional model 3. Widget frosting intended for companies in business primarily to sell hardware but use the open source model for enabling tools distributed at no charge along with the hardware most revenue is generated through sales of the hardware 4. Brand/franchise licensing a company makes the research tool itself open source but retains the rights to its product trademarks and related intellectual property and charges other companies for the right to use those trademarks in creating derivative products distributed under the same brand name this requires that the product exist in two different forms with two different names -- official (trademarked), e.g. Netscape and unofficial, e.g. Mozilla

support seller

revenue is generated by selling two broad categories of items -- physical goods and/or services that can be used to justify higher prices

most if not all open source licences would work for this model

2. Loss leader/market positioner

no charge open source product is used as a loss leader for traditional commercial software

open source product generates little or no revenue part customers are attracted for other products sold using the traditional model

3. Widget frosting

intended for companies in business primarily to sell hardware but use the open source model for enabling tools distributed at no charge along with the hardware

most revenue is generated through sales of the hardware

4. Brand/franchise licensing

a company makes the research tool itself open source but retains the rights to its product trademarks and related intellectual property and charges other companies for the right to use those trademarks in creating derivative products distributed under the same brand name

this requires that the product exist in two different forms with two different names -- official (trademarked), e.g. Netscape and unofficial, e.g. Mozilla

Crowdsourcing Jeff Howe: &quot;For the last decade or so, companies have been looking overseas, to India or China, for cheap labor. But now it doesn’t matter where the laborers are – they might be down the block, they might be in Indonesia – as long as they are connected to the network. Technological advances in everything from product design software to digital video cameras are breaking down the cost barriers that once separated amateurs from professionals. Hobbyists, part-timers, and dabblers suddenly have a market for their efforts, as smart companies in industries as disparate as pharmaceuticals and television discover ways to tap the latent talent of the crowd. The labor isn’t always free, but it costs a lot less than paying traditional employees. It’s not outsourcing; it’s crowdsourcing.&quot; Examples: Innocentive, Crowdspirit, Café Press, stock photography

Jeff Howe: &quot;For the last decade or so, companies have been looking overseas, to India or China, for cheap labor. But now it doesn’t matter where the laborers are – they might be down the block, they might be in Indonesia – as long as they are connected to the network.

Technological advances in everything from product design software to digital video cameras are breaking down the cost barriers that once separated amateurs from professionals. Hobbyists, part-timers, and dabblers suddenly have a market for their efforts, as smart companies in industries as disparate as pharmaceuticals and television discover ways to tap the latent talent of the crowd. The labor isn’t always free, but it costs a lot less than paying traditional employees. It’s not outsourcing; it’s crowdsourcing.&quot;

Examples: Innocentive, Crowdspirit, Café Press, stock photography

Crowdsourcing Players Creators (core) This is the group of people that is the most enthusiastic about the collaborative offer, and they go to great lengths in pursuit of creating something unique. They submit original content and remix each others’ material to produce solutions that will earn them respect, status, acceptance, reputation, as well as material rewards. Critics (inner ring) Critics are the people that do not produce original solutions, but are highly involved in the conversation around them. They criticize, offer development suggestions to creators and act as evangelists by actively spreading the word about the stuff they like (or alternatively, stuff they hate) by e.g. blogging. Crowds (outer ring) The larger crowd is participating but not conversing as intensively as the critics. They tag, recommend, rate, vote, send e-mail links to friends and sometimes write an occasional review. The interaction is therefore quite shallow compared to the previous level. There is however a great wisdom to be gathered from all this grassroots activity: their input elicited carefully, the crowds through their actions help organizing the alternative solutions and understanding their worth.

Creators (core)

This is the group of people that is the most enthusiastic about the collaborative offer, and they go to great lengths in pursuit of creating something unique. They submit original content and remix each others’ material to produce solutions that will earn them respect, status, acceptance, reputation, as well as material rewards.

Critics (inner ring)

Critics are the people that do not produce original solutions, but are highly involved in the conversation around them. They criticize, offer development suggestions to creators and act as evangelists by actively spreading the word about the stuff they like (or alternatively, stuff they hate) by e.g. blogging.

Crowds (outer ring)

The larger crowd is participating but not conversing as intensively as the critics. They tag, recommend, rate, vote, send e-mail links to friends and sometimes write an occasional review. The interaction is therefore quite shallow compared to the previous level. There is however a great wisdom to be gathered from all this grassroots activity: their input elicited carefully, the crowds through their actions help organizing the alternative solutions and understanding their worth.

The Flirt model of crowdsourcing Facilities Facilities have to be in place for the participants to have a place for meeting and interaction. However it doesn’t always mean that the company has to build a social network service from scratch. Language The customers are not stupid. They have to be treated with respect. Fake bloggers and ‘user-generated content’ crafted by ad agencies are bound for a beating. Incentives The blood, sweat & tears from your customers don’t come for free. The incentives required by the different groups vary, and some are willing to work for less than others, but the issue has to be given extra careful thought in engaging the community in an exchange meaningful to all participants. Rules Don’t expect to a swarm of creativity by creating an open environment where everybody is free to do whatever might occur to them. Naturally, you have to think about e.g. manufacturing constraints Tools The people obviously need to have access to the tools necessary to create and participate. These tools can be provided by the company (like Lego’s Digital Designer, a piece of software that let’s you design your own lego models) or it may be assumed that people already have them (digital cameras / cameraphones in the developed world).

Facilities

Facilities have to be in place for the participants to have a place for meeting and interaction. However it doesn’t always mean that the company has to build a social network service from scratch.

Language

The customers are not stupid. They have to be treated with respect. Fake bloggers and ‘user-generated content’ crafted by ad agencies are bound for a beating.

Incentives

The blood, sweat & tears from your customers don’t come for free. The incentives required by the different groups vary, and some are willing to work for less than others, but the issue has to be given extra careful thought in engaging the community in an exchange meaningful to all participants.

Rules

Don’t expect to a swarm of creativity by creating an open environment where everybody is free to do whatever might occur to them. Naturally, you have to think about e.g. manufacturing constraints

Tools

The people obviously need to have access to the tools necessary to create and participate. These tools can be provided by the company (like Lego’s Digital Designer, a piece of software that let’s you design your own lego models) or it may be assumed that people already have them (digital cameras / cameraphones in the developed world).

Wisdom of Crowds? James Surowiecky: “ There are four key qualities that make a crowd smart. 1) It needs to be diverse, so that people are bringing different pieces of information to the table. 2) It needs to be decentralized, so that no one at the top is dictating the crowd’s answer. 3) It needs a way of summarizing people’s opinions into one collective verdict. 4) And the people in the crowd need to be independent, so that they pay attention mostly to their own information, and not worrying about what everyone around them thinks.&quot;

James Surowiecky:

“ There are four key qualities that make a crowd smart.

1) It needs to be diverse, so that people are bringing different pieces of information to the table.

2) It needs to be decentralized, so that no one at the top is dictating the crowd’s answer.

3) It needs a way of summarizing people’s opinions into one collective verdict.

4) And the people in the crowd need to be independent, so that they pay attention mostly to their own information, and not worrying about what everyone around them thinks.&quot;

P2P and Markets Differences between peer production and the market: Markets do not function according to the criteria of collective intelligence and holoptism, but rather, in the form of insect-like swarming intelligence. Yes, there are autonomous agents in a distributed environment, but each individual only sees his own immediate benefit. Markets are based on 'neutral' cooperation, and not on synergistic cooperation: no reciprocity is created. Markets operate for the exchange value and profit, not directly for the use value. Whereas P2P aims at full participation, markets only fulfill the needs of those with purchasing power. Amongst the disadvantages of markets are: They do not function well for common needs that do not assure full payment of the service rendered (national defense, general policing, education and public health), and do not only fail to take into account negative externalities (the environment, social costs, future generations), but actively discourages such behavior. Since open markets tend to lower profit and wages, it always gives rise to anti-markets, where oligopolies and monopolies use their privileged position to have the state 'rig' the market to their benefit. The theoretical peer-like qualities of agents in free markets are absent from capitalism

Differences between peer production and the market:

Markets do not function according to the criteria of collective intelligence and holoptism, but rather, in the form of insect-like swarming intelligence. Yes, there are autonomous agents in a distributed environment, but each individual only sees his own immediate benefit.

Markets are based on 'neutral' cooperation, and not on synergistic cooperation: no reciprocity is created.

Markets operate for the exchange value and profit, not directly for the use value.

Whereas P2P aims at full participation, markets only fulfill the needs of those with purchasing power.

Amongst the disadvantages of markets are:

They do not function well for common needs that do not assure full payment of the service rendered (national defense, general policing, education and public health), and do not only fail to take into account negative externalities (the environment, social costs, future generations), but actively discourages such behavior.

Since open markets tend to lower profit and wages, it always gives rise to anti-markets, where oligopolies and monopolies use their privileged position to have the state 'rig' the market to their benefit. The theoretical peer-like qualities of agents in free markets are absent from capitalism

P2P and the Market: Immanence P2P is highly dependent on the market The market is highly dependent on peer production and social innovation Many peer production projects rely concretely on a business ecology – i.e. Linux & IBM An increasing number of corporations are commons-dependent Peer production and externalization are part of the value chain, the production chain, the cost-benefit calculations of corporations

P2P is highly dependent on the market

The market is highly dependent on peer production and social innovation

Many peer production projects rely concretely on a business ecology – i.e. Linux & IBM

An increasing number of corporations are commons-dependent

Peer production and externalization are part of the value chain, the production chain, the cost-benefit calculations of corporations

P2P and the Market: transcendence P2P remains a non-reciprocal form of production No pricing, no corporate hierarchy, no market allocation of resources P2P is dependent on the market, but also restricted by the market: unrealized social value waiting to be unlocked P2P can be part of a political project to transcend the current political economy

P2P remains a non-reciprocal form of production

No pricing, no corporate hierarchy, no market allocation of resources

P2P is dependent on the market, but also restricted by the market: unrealized social value waiting to be unlocked

P2P can be part of a political project to transcend the current political economy

P2P and the Market as field of tension Who rules: from cognitive capitalists, via vectoralists to netarchists From the Second to the Third Enclosures? From a crisis of value capture to a crisis of accumulation?

Who rules: from cognitive capitalists, via vectoralists to netarchists

From the Second to the Third Enclosures?

From a crisis of value capture to a crisis of accumulation?

Institutions vs. Communities

The politics of Web 2.0 Web 2.0 and peer producers, the dolphin/shark dilemma: 1) Who owns the platform (netarchical and vectoralist strategies) 2) Is the infrastructure open/free; 3) Participatory design: is true sharing possible? 3) Who owns the content? (third enclosures) 4) Monetization strategies (revenue sharing)

Web 2.0 and peer producers, the dolphin/shark dilemma:

1) Who owns the platform (netarchical and vectoralist strategies)

2) Is the infrastructure open/free;

3) Participatory design: is true sharing possible?

3) Who owns the content? (third enclosures)

4) Monetization strategies (revenue sharing)

What kind of ‘intersubjectivity’? Alan Page Fiske’s Relational Model Reciprocity: The Gift Economy (tribalism) Authority Ranking: The Tributary Economy (feudalism) Market Pricing: The Market Economy (capitalism) Communal Shareholding: The Sharing Economy (peer to peer)

Reciprocity: The Gift Economy (tribalism)

Authority Ranking: The Tributary Economy (feudalism)

Market Pricing: The Market Economy (capitalism)

Communal Shareholding: The Sharing Economy (peer to peer)

Economic Evolution (projection) The primary economy is based on reciprocity, which derives from common ancestry or lineage . It is based on families, clans, tribes and exchange mostly operates through gifts which create further obligation. Wants are defined by the community. Leadership is in the hands of the lineage leadership. Key issue: belonging. The secondary economy arises together with power monopolies which engender coercion as a means to force cooperation . We enter the domain of class societies, and production is organized by the elite in power, which holds together through the symbolic power which transforms power into allegiance. Respect for power, in the form of tribute, taxes, etc.. is normative. The key question is: 'to deserve power or to deserve subjection'. The tertiary economy arises with the entrepreneur and capitalism. It is based on 'equivalent', i.e. 'fair' exchange, which is normative . Power arises from relative productivity, relative monopoly over a needed good, and from the wage relationship which creates dependence. Cooperation is no longer correlated to belonging. Relationships are impersonal. The quaternary economy, based on peer to peer processes, is based on 'ideological leaders' which can frame common goals and common belonging and is based on membership and contribution . Contributing to the best of one's ability to common goals is normative and the key question becomes: to follow an existing group or to create one's own, i.e. to convince or be convinced..

The primary economy is based on reciprocity, which derives from common ancestry or lineage . It is based on families, clans, tribes and exchange mostly operates through gifts which create further obligation. Wants are defined by the community. Leadership is in the hands of the lineage leadership. Key issue: belonging.

The secondary economy arises together with power monopolies which engender coercion as a means to force cooperation . We enter the domain of class societies, and production is organized by the elite in power, which holds together through the symbolic power which transforms power into allegiance. Respect for power, in the form of tribute, taxes, etc.. is normative. The key question is: 'to deserve power or to deserve subjection'.

The tertiary economy arises with the entrepreneur and capitalism. It is based on 'equivalent', i.e. 'fair' exchange, which is normative . Power arises from relative productivity, relative monopoly over a needed good, and from the wage relationship which creates dependence. Cooperation is no longer correlated to belonging. Relationships are impersonal.

The quaternary economy, based on peer to peer processes, is based on 'ideological leaders' which can frame common goals and common belonging and is based on membership and contribution . Contributing to the best of one's ability to common goals is normative and the key question becomes: to follow an existing group or to create one's own, i.e. to convince or be convinced..

A peer-informed economy? (1) Today: treating scarce goods as if they were infinite; treating abundant goods as it there were scarce: the current economy is based on pseudo-abundance and pseudo-scarcity Tomorrow: A steady-state economy coupled with growing immaterial assets and a well-being economy: the P2P political economy is based on real abundance and scarcity

Today: treating scarce goods as if they were infinite; treating abundant goods as it there were scarce: the current economy is based on pseudo-abundance and pseudo-scarcity

Tomorrow: A steady-state economy coupled with growing immaterial assets and a well-being economy: the P2P political economy is based on real abundance and scarcity

A peer-informed economy? (2) Today: the commodification of everything; cognitive and affective capitalism; the colonization of the life-world in the market state Tomorrow: a pluralist economy combining: A core of non-reciprocal peer production A reciprocity-based gift economy for services and traditional pre-capitalist economies (open money reform) A vibrant market based on non-externalization, non-scarce monies and new corporate formats Governance based on multi-stakeholdership

Today: the commodification of everything; cognitive and affective capitalism; the colonization of the life-world in the market state

Tomorrow: a pluralist economy combining:

A core of non-reciprocal peer production

A reciprocity-based gift economy for services and traditional pre-capitalist economies (open money reform)

A vibrant market based on non-externalization, non-scarce monies and new corporate formats

Governance based on multi-stakeholdership

P2P Politics: Strategies Three strategies: Transgressive = ignoring the old: Filesharing, Piratbyran Alternative/Constructive = building the new: Creative Commons, GPL Reformist = changing/adapting the old: legislative reforms (DAVDSI France)

Three strategies:

Transgressive = ignoring the old: Filesharing, Piratbyran

Alternative/Constructive = building the new: Creative Commons, GPL

Reformist = changing/adapting the old: legislative reforms (DAVDSI France)

Systems of Influence

P2P Politics: Goals Recognition of true scarcities through true costing Reforming the market: natural capitalism, living economies Impeding artificial scarcities IP reform (against illicit monopoly rents from IP) Monetary reform Promoting true abundance Sustainability of peer production: p2p to market? Universal basic income?

Recognition of true scarcities through true costing

Reforming the market: natural capitalism, living economies

Impeding artificial scarcities

IP reform (against illicit monopoly rents from IP)

Monetary reform

Promoting true abundance

Sustainability of peer production: p2p to market?

Universal basic income?

Democracy vs. Self-governance One vote, binary decicions vs. Many differentiated decisions Discontinuous participation and batch processing Vs. Continuous, real-time bubbling up Polyphony, with prior perspective, arrested products Vs. No prior code, permanent evaluation . Autonomy is about direct expression without representation Politics is no longer about having/taking power, but about augmenting the potential for autonomy

One vote, binary decicions vs.

Many differentiated decisions

Discontinuous participation and batch processing Vs.

Continuous, real-time bubbling up

Polyphony, with prior perspective, arrested products Vs.

No prior code, permanent evaluation .

Autonomy is about direct expression without representation

Politics is no longer about having/taking power, but about augmenting the potential for autonomy

As a new mode of production, governance, and property P2P = a total social fact

THANK YOU Contact Information Wiki : www.p2pfoundation.net Blog : blog.p2pfoundation.com Email : michelsub2004@gmail.com