oeru oeru regional meeting & open business models workshop

Except where otherwise noted these materials are licensed Creative Commons Attribution 4.0 (CC BY)

27-Aug-2015Paul Stacey

Associate Director of Global Learning, Creative Commons

Building an open source business by Libby Levi licensed CC BY-SA

Oceania OERu Regional MeetingOpen Business Models

http://thepowerofopen.org/

http://teamopen.cc/piya/

http://teamopen.cc/max/

https://www.kickstarter.com/projects/creativecommons/made-with-creative-commons-a-book-on-open-business

http://creativecommons.org/weblog/entry/45022

Goal Setting for The Day

Empty Net by Jeff Wallace licensed CC BY-NC

One page OERu partnerinstitution open businessmodel from each of you that supports goal 3 ofthe OERu – “Achieve afiscally sustainable &scalable OERu network.”

Getting Open Business ModelDesign Juices Going (11-11:45)

Photo by andriuXphoto licensed CC BY-SA

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.

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

Revenues

Costs

Ownmarket

revenue

Internaldevelopment

costs

Ownmarket

revenue

Internal &external

developmentcosts

The New Business Model of Open Innovation

License

Spin-off

Sale/divestiture

New revenues

Closed model Open Innovationbusiness model

Cost & time savingsfrom leveragingexternal development

Chesbrough, Henry William (2006). Open Business Models: How to thrive in the new innovation landscape. Boston: Harvard Business School Press. pg. 17.

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

Open Source Software

System integrators sell a stack ofhardware, 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.

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?

https://medium.com/medium-writing-prompts/why-give-away-your-work-for-free-5ed4513d5fa8

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 Paleyhttp://questioncopyright.org/understanding_free_content

What does Nina Paley do?

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?

€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

Ostrom’s Commons Analysis & Design Framework

How is the digital commons differentfrom the physical commons?

Cost of storage, copying, & distribution almost $0.Cannot be depleted but artificial scarcity frequently practiced.

Global and local. Empowers individual action independent of gov’t & market.

How is open different from free?

5Rs: The Powerful Rights of OER

Your Business In The WE-EconomyThe 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.

Education business model implications?Your Business In The WE-Economy

http://we-economy.net/?page_id=928

https://www.flickr.com/

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

Public ReactionGenerosity 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?

470 co-authors from 45 countriesUsed globally by startups and big corporations.

Start with - What is a business model?

Business Model Building Blocks11:45- 12:30 pm

Business Model Generation Canvas

licensed CC BY-SA

Open Business Model Canvas Remix

Open Business Model Building Block Questions

Design your institution’s OERu 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 OERu activities? How will customers pay? How much will they pay? Will this fund your OERu activities?

Lunch12:30-1:30 pm

Designing OERu Business Model Designs1:30-2:30 pm

Share initial designs

Group work to design one or two business models based on commonalities

Focus on new revenue opportunities and/or community service/social good priorities

OERF open business model for the OERuWayne Mackintosh

Next Steps2:30-3pm

• What do we need to do in preparing the business model submission for the OERu Council of CEOs meeting on 9 October 2015?

• How will the OERu partners know what business model factors are working and what isn’t?

• What does success look like from a business point of view?

• Mapping the evolution of open business models over time. How will the model adapt?

Paul StaceyCreative Commonsweb site: http://creativecommons.org e-mail: pstacey@creativecommons.orgblog: http://edtechfrontier.compresentation slides: http://www.slideshare.net/Paul_Stacey

News: http://creativecommons.org/weblogFacebook: https://www.facebook.com/creativecommons

470 co-authors from 45 countriesUsed globally by startups and big corporations.

Books