Monday, October 13, 2003

One other element of open source software, or open source products period, is that another element of how those will work in a new/old economy is that the value will equal brand will equal value. With quality truly dictating value, dictated by people's willingness to pay money to use a product or a piece of code or pay someone to implement an open source solution, there is not only an instant and real measure of product value beyond any marketing marketing dollars can buy, but that product maker or makers becomes the brand. The difference is that that brand is forever accountable for the real value of the product - you can't market something crappy, or even give something out for free as a market capturing ploy, and grow the company by twisting old economy models. You are forever accountable as a brand. With other organizations and people making products that are essentially "free," only the best working products will succeed. As applications become more and more distributed - available instantly over a network, and display and transaction and data layers more and more transparent and modular, the most sophisticated users will simply swap out different elements of their systems for the best on the market, instantly. The only incentive for them to pay for a product is if your organization is providing so much value that a group of users desires to keep you in business, so you can add more value. I think one of the successful models that may also develop are companies that come up with enough product or code ideas that they hedge their market value. I was thinking tonight about toy companies, such as Trendmasters, that come up with a few killer toy ideas, coast for a while, and then die when they can't come up with any more mastered trends. The toy market, with its source of cheap materials and cheap labor and relatively cheap distribution, while not a perfect analogy, is a good fit for open source software, where all of those elements are similarly cheap or free. Companies make their money, long term, by combining a portfolio of tried and true favorites with some killer toys along the way. An organization such as Fisher Price can afford to try and fail different products, constantly changing their product mix, keeping the tried and true favorites, achieving some one hit wonders (enough to balance the bland or colossal failures), but constantly innovating, to help stabilize the company by hedging their bets. I suspect that some of the power companies to emerge in the next economy will be organizations that have successfully won a large enough customer base through enough tried and true ideas that they will be able to constantly innovate. Power companies don't necessarily need to be large, or necessarily companies at all, as much as cooperatives, especially as code becomes more commodified. 1:15:43 AM

One of the particularly poignant ironies of the failure of universal health care in the United States is that the conservative forces who opposed the plan have done much more than any communist organizers could ever dream to destablize and disrupt our own economy. I suspect that as employers face the reality of increased health care costs for their workers, and more workers either organize or strike to maintain benefits, there will be a growing understanding amongst the corporate class that the "liberal" approach, though bordering on socialism, makes a more stable and predictable environment for capitalism to flourish. Which is such a basic tenet of business - economies of scale - that you would have thought that enough businesses that are not insurance businesses would have banded together to win the issue. Even insurance industry employees would benefit, eventually, as dollars tied up in generating profit for a basic human need are spent and distributed in different areas of the economy. That's something that kills me about the ideological marketing we feed on every day - that so many of the "products" we consume that we "buy" into as personal "liberties" are what imprison us. Imagine a society that had a highly developed mass transit system, better transit, lower costs, less pollution, more jobs, more sustainably, better, cheaper trade transportation, better quality of life. Cars condense profit in the hands of the few, and automatically raise the cost of entry into the economy, further eroding elements of economic scalability - the feasibility of small, or micro companies delivering goods and services. Same with health care. Same, on the macro level, with education and justice - putting people in prison versus using those same resources to create better economic opportunity across a broader spectrum. Ahh, the tragedy of the commons. Ahh, the tragedy of trying to reference a source I haven't even read yet. 12:59:43 AM