Open Source Business

The open source software development model provides a fascinating study on the efficiency of a distributed, brutally honest, loosely structured creation process, built around a shared common purpose. But what if the open source concept was used to develop an entire company? That is, an open source business, one that eliminated the boundary between the producer and consumer currently inherent in Toffler's notion of the prosumer.

What if the corporation literally was a nexus of contracts, in which nobody actually worked for the company, yet the company actually existed and created products or services as well as generated revenues? Sounds like a terrible case of agency malaise just waiting to happen, doesn't it?

Yet these projects exist. Wikipedia, for example, is a free, open source encyclopedia, created chaotically by members of the Internet community. Using wiki software, any reader may add a new page or modify an existing one to the encyclopedia if they feel they can improve upon what is offered. Although there are very few rules at Wikipedia, there are several guidelines and an overarching spirit that keep a level of discipline in the project while allowing for fairly rigourous innovation. For those parts of the encyclopedia that receive a lot of traffic, quality control is extremely high, and the networked potential of the information is more fully exploited.

Oh, and two years after its inception, it boasts over 100,000 articles.

Networked markets are beginning to self-organize faster than the companies that have traditionally served them. Thanks to the web, markets are becoming better informed, smarter, and more demanding of qualities missing from most business organizations (Locke et al., 1999).

To that end, I believe the event manual for Global Village Basketball is best delivered as a wiki. Sport, though a global concept, is a local experience. To suggest that one event manual is right for all situations is ludicrous; better, then, to offer the manual in the most distributed production style possible (ie. as a wiki), so that the trials and errors of our producers+consumers=prosumers may be recognized in almost-real-time fashion and become institutional knowledge.

Technology is obviously another area that could benefit from the open source approach. There is a great deal of software required to run Global Village Basketball, including applications for scheduling, registration, scorekeeping and communication. Certainly an open source approach would allow the event to get bigger and better more quickly. Having the source code freely available to the public so that interested parties can hack improvements at no cost to the business will keep costs down and allow more venues to get involved, which will drive other revenue streams, such as advertising and syndication.

But what about core business functions, such as marketing and finance? Can these be open-sourced as well? I believe so, though I can't say for certain at this point how that would necessarily take place — it is certainly something worth exploring further. In the meantime, however, if core business functions cannot be open-sourced, at the very least complete transparency must be achieved in dealing with money issues. Those involved with projects such as Wikipedia are naturally suspicious of commercialization, although many agree that it is a necessary part of life if the proper balance can be struck between competition and cooperation. Completely transparent proceedings, contextually examined within the social orientation of the firm, can generate value by creating a high degree of trust between the prosumer and the company. Open source success rests one hundred percent on such a trust.

In light of Global Village Basketball's other proposed characteristics, open source business certainly adds an even greater element of radicality to an already radical concept. However, given the changes that are sought, I believe that such subversion is not only desirable, but necessary.


Levine, R., Locke, C., Searls, D., and Weinberger, D. (1999). The cluetrain manifesto: the end of business as usual. Perseus Publishing. Available online at:

Toffler, A. (1980). The third wave. New York: Morrow.


Comments are closed.