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Stefan Haefliger

haefliger@city.ac.uk
City Unrulyversity, June 1, 2016
www.cass.city.ac.uk
Business Models, Open Collaborat...
www.cass.city.ac.uk
Agenda
• Business models and FLOSS
• The big question of motivation
• Open collaboration
• We are the ...
www.cass.city.ac.uk
Hi, I’m Stefan
• Currently prof in strategic management and innovation at Cass
• Since 2001 research i...
www.cass.city.ac.uk
Models of Business
• What is a business and its purpose?
• What does strategy tell us about open sourc...
www.cass.city.ac.uk
4 Types of Business Models
Baden-Fuller, Giudici, Haefliger, Morgan, 2016
The company develops a
produc...
www.cass.city.ac.uk
www.businessmodelzoo.com
www.cass.city.ac.uk
www.businessmodelzoo.com
www.cass.city.ac.uk
www.businessmodelzoo.com
www.cass.city.ac.uk
www.businessmodelzoo.com
www.cass.city.ac.uk
OSS and Business Models
• Selling work for hire: your talent to TechCity firms
• Sell solutions: RedHat...
www.cass.city.ac.uk
Technology ≠ Business
• “Platforms” are known in technology, economics,
and business.
• A platform tec...
www.cass.city.ac.uk
What is special with OSS?
• Innovation by user developers gives the world
great software and enables n...
www.cass.city.ac.uk
Two Questions for the 

OSS-enabled Business Model
• Why?
• Lerner and Tirole in 2001: “Why do highly ...
www.cass.city.ac.uk
Open source
software development
• Two central questions remained unanswered after
reading most or all...
www.cass.city.ac.uk
Motivation by reward
• Self-determination theory, since the 80ies, explains
the different reasons that...
www.cass.city.ac.uk
Examples for extrinsic and
intrinsic motivations
Extrinsic Internalized extrinsic Intrinsic
Salary Lea...
www.cass.city.ac.uk
Motivation
• What is missing?
www.cass.city.ac.uk
A broader look at motivation
• Long-term goals that may be in vain
• Making sense of one’s life (narra...
www.cass.city.ac.uk
What is a social practice?
• Shared type of work: think care givers, architects,
managers, software en...
www.cass.city.ac.uk
A social practice view of
motivation
Self-determination view Social practice view
Output Product Good
...
www.cass.city.ac.uk
Open Collaboration
• Private-collective innovation involves individual
users, firm users, and firm produ...
www.cass.city.ac.uk
The setting: Open Stack
Armisen et al., 2016
www.cass.city.ac.uk
Data from Open Stack
• Two years, 5018 problems that were either Blueprint or Bug
• 196 individuals in...
www.cass.city.ac.uk
Who contributes what to

Open Stack?
Contributions of blueprints and
bugs per actor (total amount)
Arm...
www.cass.city.ac.uk
Collaboration depends on
who suggests the feature
Armisen et al., 2016
www.cass.city.ac.uk
Business Models and

Open Collaboration
• If “we are the innovation” then triadic business
models that...
www.cass.city.ac.uk
Comments

Questions

Critique
Answers
Puzzles
Data
?
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Business Models, Open Collaboration, and Open Source Software Development

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Business Models, Open Collaboration, and Open Source Software Development by Stefan Haefliger

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Business Models, Open Collaboration, and Open Source Software Development

  1. 1. Stefan Haefliger
 haefliger@city.ac.uk City Unrulyversity, June 1, 2016 www.cass.city.ac.uk Business Models, Open Collaboration, and Open Source Software Development
  2. 2. www.cass.city.ac.uk Agenda • Business models and FLOSS • The big question of motivation • Open collaboration • We are the innovation • Q&A www.cass.city.ac.uk
  3. 3. www.cass.city.ac.uk Hi, I’m Stefan • Currently prof in strategic management and innovation at Cass • Since 2001 research in Free and Open Source software development: Free Java, FOSDEM, interviewed dozens of hackers across Europe • Studied code reuse in FLOSS, community dynamics and motivation, and now open collaboration • With strategy colleagues at CASS: F1 research and business model typology: the businessmodelzoo.com • Swiss originally, worked in the US, Japan, Italy, Belgium • Passionate about meditation, art, and creativity
  4. 4. www.cass.city.ac.uk Models of Business • What is a business and its purpose? • What does strategy tell us about open source? • What is a business model? • The model of the customer interface in the mind of the designer of the business • Implementations may work out, - or fail!
  5. 5. www.cass.city.ac.uk 4 Types of Business Models Baden-Fuller, Giudici, Haefliger, Morgan, 2016 The company develops a product or standardised service and sells it to customers. The value proposition is transactional: to provide a product or standardised service that many customers will buy. The company engages with a customer about a problem the customer faces, and provides an integrated solution. The value proposition is relational: to tailor solutions to each customer. The company joins buyers and sellers in its online or physical marketplace. The value proposition is transactional: to facilitate exchange. The company provides different products or services to different customer groups. The value proposition is multi-sided: one customer group gets additional benefits from the other group’s transactions.
  6. 6. www.cass.city.ac.uk www.businessmodelzoo.com
  7. 7. www.cass.city.ac.uk www.businessmodelzoo.com
  8. 8. www.cass.city.ac.uk www.businessmodelzoo.com
  9. 9. www.cass.city.ac.uk www.businessmodelzoo.com
  10. 10. www.cass.city.ac.uk OSS and Business Models • Selling work for hire: your talent to TechCity firms • Sell solutions: RedHat, Acquia, etc. • Build a market: match talent and tech firms (pilot.co and others) • Build a multisided platform business model: connect but keep separate (Ad-supported or data sales on social networks, often one side free!)
  11. 11. www.cass.city.ac.uk Technology ≠ Business • “Platforms” are known in technology, economics, and business. • A platform technology is not the same as a platform business model! Consider e-commerce over the Internet and advertisement-enabled online search (Google) • Technology is all three: a product and an enabler and an input to business!
  12. 12. www.cass.city.ac.uk What is special with OSS? • Innovation by user developers gives the world great software and enables new business • User entrepreneurs set up shop with what they’ve developed • Developers help each other and contribute to business problems • “We are the product” also means: 
 “We are the innovation!”
  13. 13. www.cass.city.ac.uk Two Questions for the 
 OSS-enabled Business Model • Why? • Lerner and Tirole in 2001: “Why do highly skilled programmers give a way software for free?” • Stallman, the GNU and so forth only half the story • Why is FLOSS sustainable and (often) resulting in high quality and for the benefit of business? • How? • Who solves whose problems in OSSD today? • What are the patterns of open collaboration?
  14. 14. www.cass.city.ac.uk Open source software development • Two central questions remained unanswered after reading most or all that’s been written about developers’ motivations: • why do they keep developing over long periods of time (often after solving their own problems)? • why do they produce high quality if they do? • Why? von Krogh, Haefliger,Wallin, Spaeth 2012
  15. 15. www.cass.city.ac.uk Motivation by reward • Self-determination theory, since the 80ies, explains the different reasons that bring about human action • note that what is to be explained is action rather than inaction! • Extrinsic motivation if action is performed to obtain a separable outcome • Intrinsic motivation if joy or interest inherent in the action
  16. 16. www.cass.city.ac.uk Examples for extrinsic and intrinsic motivations Extrinsic Internalized extrinsic Intrinsic Salary Learning Fun Career Reputation Ideology Punishment Reciprocity Altruism
  17. 17. www.cass.city.ac.uk Motivation • What is missing?
  18. 18. www.cass.city.ac.uk A broader look at motivation • Long-term goals that may be in vain • Making sense of one’s life (narrative, character, learning) • Doing the right thing • Understanding quality • standards of excellence as shared in a community • community as defined by a social practice
  19. 19. www.cass.city.ac.uk What is a social practice? • Shared type of work: think care givers, architects, managers, software engineers, bankers etc. • Social practice defined as “a coherent and complex form of socially established cooperative human activity ... trying to achieve and extend the standards of excellence appropriate to and definitive of the activity” (after MacIntyre, 1981)
  20. 20. www.cass.city.ac.uk A social practice view of motivation Self-determination view Social practice view Output Product Good Incentive Reward Unity of life, moral obligation Interaction with peers and tasks Situational, next step, 
 solution-oriented Developmental, sequential, 
 quest-oriented Quality perception Use value Standards of excellence Time perspective Short- to mid-term Long-term, sense for the right time von Krogh, Haefliger,Wallin, Spaeth 2012
  21. 21. www.cass.city.ac.uk Open Collaboration • Private-collective innovation involves individual users, firm users, and firm producers • Problems revealed are incremental or path-creating • What is the inner working mechanism of open collaboration? Who solves whose problems? • How?
  22. 22. www.cass.city.ac.uk The setting: Open Stack Armisen et al., 2016
  23. 23. www.cass.city.ac.uk Data from Open Stack • Two years, 5018 problems that were either Blueprint or Bug • 196 individuals in 14 firm producers, 280k LOC, 12,298 revealed solutions • 163 independent users, 95 produced 55k LOC, 2,578 revealed solutions • 184 individuals in 110 firm users, 640k LOC, 7,605 revealed solutions Armisen et al., 2016
  24. 24. www.cass.city.ac.uk Who contributes what to
 Open Stack? Contributions of blueprints and bugs per actor (total amount) Armisen et al., 2016
  25. 25. www.cass.city.ac.uk Collaboration depends on who suggests the feature Armisen et al., 2016
  26. 26. www.cass.city.ac.uk Business Models and
 Open Collaboration • If “we are the innovation” then triadic business models that engage in open collaboration need to understand the social practice behind innovation • Because interaction is developmental, long-term • Because consumers are also suppliers • Because learning is an explicit part of the customer engagement and runs both ways
  27. 27. www.cass.city.ac.uk Comments
 Questions
 Critique Answers Puzzles Data ? PDF with today’s slides:

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