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UPTEC Open Business Models Workshop

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Open business models workshop for tech startups and companies at University of Porto Science and Technology Park in Portugal on October 22, 2015. Done as a citizens lab workshop in conjunction with futureplaces.

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UPTEC Open Business Models Workshop

  1. 1. Except where otherwise noted these materials are licensed Creative Commons Attribution 4.0 (CC BY) 22-Oct-2015 Paul Stacey Associate Director of Global Learning, Creative Commons Building an open source business by Libby Levi licensed CC BY-SA University of Porto (UPTEC) Open Business Models
  2. 2. Agenda Orientation • Introduction to Creative Commons • Describe Creative Commons open business models work Goals & Preparation • Questions about open business models • Goal setting for the day • Identifying fears of openness Getting model design juices flowing • Use case studies to interactively explore how open business models work • Rationale, benefits, and models of open businesses • Stimulate a think different approach
  3. 3. Agenda Design your OERu open business model • Introduce the building blocks for what an open business model is • Review the core questions to ask in building out each component of an open business model • Use a template to design an open business model for your business Open Business Model Design Sharing • Group sharing of individual business models and their institutions revenue opportunities and community service priorities • Synthesis of multiple designs into one or two shared models • Open business model gallery
  4. 4. Traditional © designed for old distribution models The problem:
  5. 5. Technically easy to share but legally not so easy. Processing speed, bandwidth, storage increasing at lower costs. Internet by Pat Guiney CC BY
  6. 6. creativecommons.org
  7. 7. We make sharing content easy, legal, and scalable. What do we do?
  8. 8. Free © licenses that creators can attach to their works How do we do it?
  9. 9. Retain copyright while at same time expressing up front a set of permissions.
  10. 10. Step 1: Choose Conditions Attribution ShareAlike NonCommercial NoDerivatives
  11. 11. Step 2: Receive a License
  12. 12. most free least free
  13. 13. Lawyer Readable Legal Code
  14. 14. Human Readable Deed
  15. 15. Machine Readable Metadata
  16. 16. http://creativecommons.org/choose
  17. 17. Best Practices for Attribution: (TASL)  Title  Author  Source – Link to work  License – Name + Link Peace Bridge by D'Arcy Norman CC BY
  18. 18. https://docs.google.com/document/d/1mYkfsXT3U63wxQ-dB_WPTx4TZn9nrzWpBfX5RXEQKu4/edit?usp=sharing “Except where otherwise noted these materials are licensed Creative Commons Attribution 4.0 (CC BY)”
  19. 19. Galleries, Libraries, Archives & Museums http://openglam.org/Open Access Open Data Open Textbooks
  20. 20. 5Rs: The Powerful Rights of OER • Make, own, and control your own copy of the contentRetain • Use the content in its unaltered formReuse • Adapt, adjust, modify, improve, or alter the contentRevise • Combine the original or revised content with other OER to create something newRemix • Share your copies of the original content, revisions, or remixes with othersRedistribute
  21. 21. https://stateof.creativecommons.org
  22. 22. Exploring Open Business Models Building an open source business by Libby Levi licensed CC BY-SA
  23. 23. http://thepowerofopen.org/ http://teamopen.cc/all/ Creative Commons Use Cases & Stories
  24. 24. https://www.kickstarter.com/projects/creativecommons/made-with-creative-commons-a-book-on-open-business http://creativecommons.org/weblog/entry/45022
  25. 25. CC Toolkit for Business Fátima São Simão
  26. 26. CCToolkits.com Project CC Portugal Affiliate
  27. 27. What’s next?
  28. 28. Goal Setting for The Day Empty Net by Jeff Wallace licensed CC BY-NC Explore open business models as an alternative to traditional closed models and design an example open business model for your business
  29. 29. Parking Fears of Openness The Scream by Edvard Munch National Gallery Oslo Norway
  30. 30. Getting Open Business Model Design Juices Going Photo by andriuXphoto licensed CC BY-SA
  31. 31. Closed Innovation Paradigm Chesbrough, Henry William (2006). Open Innovation: The new imperative for creating and profiting from technology. Boston: Harvard Business School Press. pg. xxii. Based on the belief that successful innovation requires control. Companies must generate there own ideas, then develop them, build them, market them, distribute them, service them, finance them, and support them, on their own. Closed innovation counsels businesses to be self-reliant and internally focused. To be sure of quality, availability, and capability you’ve got to do it yourself.
  32. 32. Open Innovation Paradigm Chesbrough, Henry William (2006). Open Innovation: The new imperative for creating and profiting from technology. Boston: Harvard Business School Press. pg. xxii. Doing it all yourself fails to productively make use of new knowledge and ideas outside your business. Open innovation combines both external and internal ideas to create value. In addition, ideas can be taken to market through external channels, outside the current business of the firm, to generate additional value. Open innovation requires less control and more collaboration
  33. 33. Revenues Costs Own market revenue Internal development costs Own market revenue Internal & external development costs The New Business Model of Open Innovation License Spin-off Sale/ divestiture New revenues Closed model Open Innovation business model Cost & time savings from leveraging external development Chesbrough, Henry William (2006). Open Business Models: How to thrive in the new innovation landscape. Boston: Harvard Business School Press. pg. 17.
  34. 34. Open Source Software http://www.catb.org/~esr/writings/cathedral-bazaar/magic-cauldron/ Magic Cauldron Essay Use-Value Funding Models • Cost-Sharing • Risk-Spreading Indirect Sale-Value Models • Loss-Leader/Market Positioner • Widget Frosting • Give Away the Recipe, Open a Restaurant • Accessorizing • Free the Future, Sell the Present • Free the Software, Sell the Brand • Free the Software, Sell the Content
  35. 35. Open Source Software System integrators sell a stack of hardware, software, and services. Integrators can charge customers similar prices even if they use open source software. How does business model change if you use open source software? Dirk Riehle. “The Economic Motivation of Open Source Software: Stakeholder Perspectives.” IEEE Computer, vol. 40, no. 4 (April 2007). Page 25–32. The paper is available as a PDF file as well as online. © 2007 IEEE.
  36. 36. Free + Open • A portion of your business has a free layer and a layer that generates money. • Free reduces friction and lowers the cost of entry • Try before buy. • Generating money generally involves figuring out pain points and placing a lot of services and options for reducing pain in area between free and paid. • Open allows customers/users to customize, localize, personalize and improve what you are offering – to the benefit of all.
  37. 37. Your Business In The WE-Economy The levels of user engagement in value creation follow a long tail. At one end of the scale are lots of users contributing a bit of feedback — at the other end are a few super-users co- creating products as experts. What’s new is that companies are opening to input, and that customers are willing and able to participate to a greater extent. Implications for your business? Your Business In The WE-Economy http://we-economy.net/?page_id=928
  38. 38. Open Source Software Dirk Riehle. “The Economic Motivation of Open Source Software: Stakeholder Perspectives.” IEEE Computer, vol. 40, no. 4 (April 2007). Page 25–32. The paper is available as a PDF file as well as online. © 2007 IEEE. Switching to open source software can result in more customers and higher profits. How does business model change if you use open source software?
  39. 39. Free + Open • Lets you rapidly penetrate market and generate market awareness • Increases your market reach and customer base • Inputs vs outputs • Central vs. peripheral • Authoring vs. remix focus • Reuse downstream vs reuse upfront • Solo business model vs. partner based business model
  40. 40. If what you have is good, just give it time. "Viral" growth is exponential, but it can take a while. Or you can use advertising to artificially direct audience attention to something they wouldn't care about otherwise. If the work is not good, interest will drop off when advertising does. Understanding Free Content by Nina Paley http://questioncopyright.org/understanding_free_content
  41. 41. What does Nina Paley do?
  42. 42. https://thenounproject.com/ Creating, Sharing and Celebrating the World’s Visual Language
  43. 43. Many cultural institutions hold material that is in the public domain. This does not mean that they also have to publish it for free. The Rijksmuseum has, like most art museums, an image bank where they sell digital copies of images. When at the end of 2011 they started releasing images, they offered two sizes. The medium quality image (.jpg, 4500x4500, +/- 2MB) was available free to download from their website without any restrictions. When the user clicked on the download button, a pop‐up asked the user to attribute the Rijksmuseum as a courtesy. If the user was looking for the master file (.tiff and up to 200MB) they were charged €40. Democratising the Rijksmuseum by Joris Pekel, Europeana Foundation http://pro.europeana.eu/files/Europeana_Professional/Publications/Democratising%20the%20Rijksmuseum.pdf What does Rijksmuseum do?
  44. 44. €181,000 revenue is quite high, but represents only 0.2% of the total revenue of the Rijksmuseum during that period. Total employee costs were about €100,000 per year. In October 2013 the Rijksmuseum decided to no longer charge for public domain images that were already digitised and started releasing their highest quality images for free. They preferred instead to focus their efforts on generating project funding from art foundations in order to digitise an entire collection. Such administrative costs are much lower, as a transaction is only made once and is a lot easier to handle than multiple private individuals. For the Rijksmuseum the revenue from image sale was relatively small and they decided to abandon it all together as a way to create more goodwill, get more people familiar with their collection and attract them to come to the museum. Democratising the Rijksmuseum by Joris Pekel, Europeana Foundation http://pro.europeana.eu/files/Europeana_Professional/Publications/Democratising%20the%20Rijksmuseum.pdf https://www.rijksmuseum.nl/en
  45. 45. https://www.flickr.com/
  46. 46. In October 2014, Flickr announced a new service that allows its members to order printed photos on wood or canvas, choosing either from their own photos, from a set of curated images, or from about 50 million CC BY or CC BY-SA–licensed images. Flickr would share profits with the photographers of the curated images, but not the CC-licensed ones, as those licenses permit Flickr to use the photos commercially. Creators with copyrighted images are compensated 51% of what Flickr collects. Flickr keeps 100% of the proceeds from the CC licensed images. https://www.flickr.com/create
  47. 47. Public Reaction Generosity taken advantage of unfairly. Flickr adding little value add & exploiting photographers. CC photographers could have kept their images to themselves and gotten half of the fee, instead of Flickr taking all of it. Demotivating/deincentivizing to people who share their work. Not legally obligated, but social obligation? What would you do?
  48. 48. http://www.openwords.com/
  49. 49. https://www.posiba.com/
  50. 50. http://tumuult.com/
  51. 51. https://www.seats2meet.com/
  52. 52. http://www.autodesk.com/company/creative-commons
  53. 53. What We’ve Learned So Far 1. CC licensing doesn’t have much in common with the sharing economy – only similarity is making better use of existing resources 2. Open business models generally have a deeper motivation beyond maximizing profit 3. Successful open businesses usually have a compelling social mission. Akin to fair trade or Leeds building. Establish themselves as social enterprises and BCorps. 4. Open businesses usually have an engaged community contributing to the success of the business. 5. Often crowdsource content and/or marketing
  54. 54. Things We’ve Learned So Far 6. Share rewards and financial returns with their community 7. Maximize abundance – eliminate artificial scarcity. 8. Traditional market economics aren’t a good fit. 9. Gifts rather than commodities. 10.Use multiple means of open.
  55. 55. 470 co-authors from 45 countries Used globally by startups and big corporations. Start with - What is a business model? Business Model Building Blocks
  56. 56. Business Model Generation Canvas licensed CC BY-SA
  57. 57. Open Business Model Canvas Remix
  58. 58. Open Business Model Building Block Questions https://docs.google.com/drawings/d/1zkAYPAhEh0TMYxgdExIiVDq8UTZX3WZ9mfB-22Gw5HY/edit
  59. 59. Design your open business model Using open business model canvas design: • Customer segments: Who are the customers you are targeting or intending to serve through OERu? • Value proposition: What value proposition are you providing each customer? What are the bundles of products and services you are offering and what customer needs do they fulfill? • Social good: What social good is being generated (beyond revenue or profits) • Revenue: What revenue will be generated through your business activities? How will customers pay? How much will they pay? Will this fund your activities?
  60. 60. Designing OERu Business Model Designs Share initial designs Common replicable models? Open business model gallery
  61. 61. Paul Stacey Creative Commons web site: http://creativecommons.org e-mail: pstacey@creativecommons.org blog: http://edtechfrontier.com presentation slides: http://www.slideshare.net/Paul_Stacey News: http://creativecommons.org/weblog Facebook: https://www.facebook.com/creativecommons
  62. 62. 470 co-authors from 45 countries Used globally by startups and big corporations. Books

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