I’ve written several times about open concepts (open innovation, open source software, …) and I can take pleasure in many of these ideas. But to be scientifically honest on the one hand and because approaches like the following also find favor with me on the other hand I want to draw your attention to these two statements/findings:
Open source or distributed innovation is all the rage at the moment, but the hype glosses over one important fact — most open source projects are total failures. But this fact is precisely why the open source innovation movement is so important. [...] Nobody can tell what’s silly and what isn’t without the benefit of hindsight. But with open innovation, researching and worrying about whether something will work or not is unnecessary because of the low cost of trying.
(Open Innovation and Other Foolish Ideas)
Credit: TypeMuseum
This paper provides a simple model of two-sided platforms that clearly shows how this common intuition breaks down in two-sided markets. Key concepts include:
- Proprietary platforms may induce higher levels of product variety, user adoption, and total social welfare than open platforms.
- Proprietary platforms are sometimes more socially desirable than open platforms, which runs against the common intuition that open platforms are more efficient.
- Analysis of socially desirable benefits in two-sided markets follows a very different logic from that in one-sided markets, and may lead to counterintuitive conclusions.
(Proprietary vs. Open Two-Sided Platforms and Social Efficiency)
To put it in a nutshell I’d say that we should avoid hyping the “open trend” and be aware of as many options as possible to adress a problem. Especially two questions (as addressed above) should be considered notably:
- How to deal with failing?
- Is it really intuitive?
