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Leveraging Openness Wendy Seltzer -- Yale Law School Information Society Project Chilling Effects Clearinghouse chillingeffects.org.

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Presentation on theme: "Leveraging Openness Wendy Seltzer -- Yale Law School Information Society Project Chilling Effects Clearinghouse chillingeffects.org."— Presentation transcript:

1 Leveraging Openness Wendy Seltzer -- wendy@seltzer.org Yale Law School Information Society Project Chilling Effects Clearinghouse chillingeffects.org

2 Why Open? Henry Chesbrough, Open Innovation: openness enables collaboration and innovation beyond the boundaries of the firm Bill Joy: “Not all the smart people in the world work for you.” Openness lets people work together with fewer NDAs and more exchange.

3 Why Open Now? Eric von Hippel and Carliss Baldwin,Modeling a Paradigm Shift: From Producer Innovation to User and Open Collaborative Innovation As Internet technology drives down communication costs, open collaborative innovation becomes competitive with single- user and producer-based innovation.

4 Openness as Leverage Adoption vs Appropriability: Would you rather have a small share of a large pie, or a whole small one? Platform’s value depends on How good it is How many people use it How many people develop for it Opening a platform and sharing profits can give more people a stake in its marketing and development. More begets more: positive network effects of standardization increase the platform’s value.

5 Openness as Commitment Permission to fork can be a disincentive to do so, if knowing others can walk away restrains the platform proprietor. Promise that users will be able to escape is a commitment that the company will keep improving or give them a way out if it fails to meet expectations. Preserves option value for the users; they’re not tied down, This keeps the company closer to its users – it can use their movement as a measure of their happiness sooner, while it retains the ability to win them back.

6 Why not Open? It’s too early to convince needed partners: Steve Jobs, “Thoughts on Music,” Feb. 2007. “The third alternative is to abolish DRMs entirely. Imagine a world where every online store sells DRM-free music encoded in open licensable formats.... This is clearly the best alternative for consumers, and Apple would embrace it in a heartbeat. If the big four music companies would license Apple their music without the requirement that it be protected with a DRM, we would switch to selling only DRM- free music on our iTunes store.” Jan. 2009, “All Songs DRM-Free” Platform cohesion Security Your business model has none of: First-mover advantage Complements (Ads) On-going service

7 Openness is Multi-Dimensional Architecture Openness low high lowhigh Market Openness: competition, network effects

8 The Stack of Players Users Software Vendors Android Platform Hardware Vendors Phone Carriers

9 Thanks! Wendy Seltzer -- wendy@seltzer.org Yale Law School Information Society Project Chilling Effects Clearinghouse chillingeffects.org Twitter @wseltzer / Google+ http://wendy.seltzer.org/+


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