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Leveraging Openness

Leveraging Openness. Wendy Seltzer -- wendy@seltzer.org Yale Law School Information Society Project Chilling Effects Clearinghouse chillingeffects.org. Why Open?. Henry Chesbrough, Open Innovation: openness enables collaboration and innovation beyond the boundaries of the firm

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Leveraging Openness

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  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 high Market Openness: competition, network effects low low high Architecture Openness

  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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