Business models for peer production by Michel Bauwens |
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What exactly is the P2P dynamic we so often refer to in our contributions? The important shift to remember is in my view the following: instead of institutions dealing with what are assumed to be atomized individuals, through mass media, directing products to ‘passive consumers’, it should from now on be considered that such individuals are always already connected through peer groups. Not just one, but a multitude of them, both pre-existing, but also intensional networks that are purposely formed at various point in life, in order to achieve specific goals. This turns institutions into facilitators and enablers.
To see what this means in terms of relationships between institution and community, we have created a ladder of participation model, which comes in two parts. The first starts from the point of view of the for-profit institution, and considers the degree of participation that will be allowed. In this context, the initiative comes from the company, and though there may be pressure by its ‘consumers’, the political framework is controlled by the corporation. Such a model has been worked out by Xavier Comtesse, and he calls it the direct economy model.
Here it goes:
- 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. This is a pretty good model as far as it goes, but it leaves out half the story, i.e. the agency of the peer producing communities, i.e. the for-benefit institutions, themselves. These are not just followers, neither Linux nor Wikipedia were initiated by companies, but creators of new production models, forms of ‘production without a manufacturer’, which companies can join or not. Clearly, if a project is started by a community, with its own institutional choices and history, companies who join will not be in control of the framework of participation. On the contrary, it is the community which can allow various levels of corporate involvement. So this needs a new modeling, starting from a different polarity, and which can complement the model proposed by Xavier Comtesse. Call it the Bauwens Model of Participation if you want. Both these models are not contradictory, there is not one that is right and another that is wrong, but as they start from the different polaries, they are complementary and both necessary for a full understanding of the new hybrid forms that are emerging.Please note that I make the customary distinction between the direct creation of use value, for direct use, not sale, and the direct creation of exchange value, which attempts to do such without powerful corporate intermediaries who would ‘own’ and direct the production process as part of their own value chain. While the latter is not peer production, it is part of the same trend towards ‘participation’ and the distribution of production that is an effect of the lowering capital requirement s of productive machinery. We are entering a period where the automatic linkage between capital and entrepreneurship is no longer a given, and where both can go their separate ways, giving rise to entrepreneurs operating outside the framework of capital. However, my proposed model does not exclude proprietary platforms which enable and empower such cooperation to take place. Finally, it is also important to distinguish the sharing economy, of individuals sharing their creative expression, from a commons economy, where a common ‘product’ is created.Seen from the polarity of the community dynamic of peer production, the following hybrid models may be conceived, and we would argue, are already taking place.
- Direct peer production of use value with no concern for monetization; An example of this is the adventure economy of couchsurfing.com, with strangers helping strangers, a direct and non-reciprocal exchange of use value (hospitality), outside of the monetary sphere. Note how Wikipedia refuses advertizing, and so does Craigslist, both are foregoing enormous monetary gains, as a conscious decision.
- Direct peer production of use value with concern for equitable monetization; Communities develop a commons, but around it, an ecology of business may be formed. However, in this format, the peer producers desire to take control of this monetization process themselves, and choose equity-based formats, such as cooperatives. The paradigmatic example is the Austrial OS Alliance of free software developers, and a similar initiative exists in India. In the field of theory, attempts to create an ecopyleft license (the IANG License of Patrick Godeau), and the user ownership theory derivative of the General Public License, are attempts to create a future institutional framework for this sector.
- Direct production of use value by groups with commons-oriented business ecology. This is the classic Linux model. A community of peer producers, usually combined with a non-profit foundation in charge of its infrastructure, creates an ecology of businesses , who create marketable scarcities around the abundant commons which forms the basis for it.
- Direct production of use value by individuals with monetization of attention through proprietary platforms. The well-known Web 2.0 model, whereby individuals share their expressive production, using a proprietary platform which sells their attention. Think YouTube.
- Direct production of exchange value by groups: cooperative production ; Unlike the OS Alliance model mentioned above, here there is a direct creation of exchange value for the market, but through a cooperative format. This is of course the old model of producer cooperatives, such as Mondragon.
- Direct production of exchange value by individuals; This refers to the growing possibility of local distributed manufacturing and design, by independent individuals using a growing infrastructure for distributed production. They may design a product on their own, use a platform to present it to the world, using 3D printers of fabbing to create physical models, and be connected with production units that can be mobilized anywhere in the world, locally, or in China. Such individuals can form networked micro agencies. Ebay is also an example of this category, playing the role of a universal platform.
The above model is not perfect yet, but we believe that, combined with the direct economy model of Xavier Comtesse, it gives a comprehensive model o f the many different hybrid models being created. Obviously, business and marketing practices will be different according to which pole is being addressed, and we can expect the emergence of a new set of businesses and marketing agents, catering for the peer production polarity directly. Think about the group buying companies in China, searching for products for their clientbase. Think about the efforts of Doc Searle and others who are trying to create an infrastructure for the Intention Economy, by way of Vendor Relationship Management. The pull model of the intention economy is likely to become just as important as the push model of business producers.
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