Milestone Group Quarterly: April 2004
Articles
OpEd:
Thomas W. Malone on Open Source As An Organizational Model
Most people think of “open source” as another term for “free software.” But some of the most important aspects of open source software have nothing to do with being “free” or being “software.” They have to do with the extremely decentralized ways open source developers organize their work. Very similar organizational structures can be used to create many other kinds of intellectual products. And they can be coupled with economic motivations to pay developers and sell the products for money. These structures aren’t common yet, but a few early examples show what’s possible, and what may become much more widespread in the future.
In January 2001, for example, Larry Sanger and Jimmy Wales decided to develop a new encyclopedia on the web. But they didn’t hire layers of editors and subeditors for the various subject areas. They didn’t contract with experts to write, illustrate, and review all the articles. They didn’t even plan to revise and polish each entry before publishing it.
Instead, inspired by open source software, they created an “open content” encyclopedia. First, they set up a basic web site for the encyclopedia and called it “Wikipedia” (www.wikipedia.org). “Wiki,” the Hawaiian term for “quick,” refers to the ease with which people can add and edit entries using the special collaboration software they used. Then, Sanger and Wales and a few of their friends started writing and posting articles, making them freely available to anyone on the web. And here’s the really unusual thing: They let anyone, at any time, revise the existing articles or add new articles of their own.
The response was phenomenal. In the first month, Wikipedia had 1,000 articles. After the first year, it had 20,000; after the second, it had 100,000; and now it has over 220,000. By mid-2003, more than 700 people had listed themselves as contributors, more than 10,000 had registered as users, and an unknown number of others had contributed anonymously.
While it doesn’t yet rival, say, the Encyclopedia Britanica in quantity or quality, Wikipedia already has a substantial store of well-written, accurate content. Several factors contribute to the relatively high quality. First, highly educated, skilled writers have been attracted by the idea of collectively creating a global encyclopedia that is free to everyone. Second, frequent contributors make a point of reviewing new and updated pages for everything from spelling mistakes to factual errors. In some cases, they fix errors immediately. In others, they add the entry to an on-line list of “Pages needing attention”. In the few rare cases where “vandals” have made malicious changes to pages, their access to the site has been curtailed by one of its volunteer administrators.
Jimmy Wales and Larry Sanger were influential in setting an original direction and some guiding policies. But then their “managerial” roles diminished. And, with the project’s foundations in place, the community has been able to operate effectively with very little management intervention at all.
Wikipedia shows how a very loose hierarchy of contributors like the people who created the Linux software can create other kinds of intellectual products, too. But Linux and Wikipedia rely on people contributing just for the love of doing it; they don’t actually get paid for their efforts.
Asynchrony Software shows how a similar organizational structure can engage people’s economic motivations, too. In fact, the company slogan for Asynchrony is: “Code for love and money.”
Here’s how it works: Someone with an idea for a software project posts it on the Asynchrony website. People interested in working on it respond, and the project leader selects a team. Before work begins, the leader must reach agreement with the team members about how any eventual revenues will be divided among them. In other words, each project is like a small startup company, with each team member receiving “equity” in it.
Once the team is formed, the development process proceeds in a more or less conventional way: Each person writes his or her part of the software, the project leader provides overall guidance, and the code is shared electronically through the site. Interestingly, the “beta testers” who exhaustively test early versions of the software to find bugs are also recruited through the site and also receive shares of the revenue. When the software is finished, Asynchrony helps market it, typically receiving between 10% and 25% of the revenue.
There’s no one sitting at the top of Asynchrony who says, “Here are our priorities: We’re going to develop these kinds of software, and we need to hire this many programmers with these kinds of specialties.” Instead, these decisions are decentralized through the Asynchrony community of more than 30,000 people around the world. The individual members and teams decide for themselves what projects to do, who will do them, how to appraise performance, and how to reward contributors.
So far in Asynchrony, projects are initiated only by technologists who have “cool ideas” with commercial potential. Clearly, it would be good to allow software buyers to initiate projects as well. A company that illustrates how that could be done is Elance, Inc.
The basic idea of the Elance website is to create online auctions for a wide range of professional services--software development, graphic design, market research, language translation, and so on. All the services share one important thing in common: They can be performed electronically, without the buyer and the seller ever having to meet face-to-face.
To use the site, a buyer posts a description of the project and receives bids from many different contractors. Based on the bids (and ratings of the bidders by previous clients), the buyer hires a contractor. When the project is over, both buyer and seller rate each other, and their respective on-line “reputations” are updated. For large projects, project leaders can post their own requests for the subtasks needed and thus assemble a team to bid on the overall project, drawing on a worldwide pool of talented specialists.
Now here’s a really surprising point: All the organizational ideas we’ve just seen can also be used inside a single company. Hewlett-Packard, for instance, has already used a system that combines aspects of Elance and Asynchrony inside one of their divisions. People with ideas for projects submit them to an internal board of senior managers, called the “VC Café.” Then the project leaders whose ideas are funded assemble their teams by advertising for project members on an internal system. This way potential project members and project leaders can find each other even when the group managers don’t know about all the skills and interests of the people in their groups.
All these decentralized organizational models use IT to spread information much more widely than usually happens today. They take advantage of individual people’s interests and skills. They encourage creativity, motivation, and flexibility.
When you think about it, it’s hard to imagine that they won’t be used much more widely in the future. As communication costs continue to fall, it seems almost inevitable that people will use structures like these to create, not just software and encyclopedias, but a variety of other intellectual products, too. Don’t be surprised if, in the next few years, you hear stories about people using structures like this to create newspapers, magazines, textbooks, and engineering designs for physical products. And don’t be surprised if some of these enterprises are extremely profitable, too!
This article has been adapted from Thomas W. Malone, The Future of Work: How the New Order of Business Will Shape Your Organization, Your Management Style, and Your Life, Harvard Business School Press, 2004.
Thomas W. Malone is the Patrick J. McGovern Professor of Management at the MIT Sloan School of Management. He is also the founder and director of the MIT Center for Coordination Science and was one of the two founding co-directors of the MIT Initiative on "Inventing the Organizations of the 21st Century". His most recent book is The Future of Work: How the New Order of Business Will Shape Your Organization, Your Management Style, and Your Life. Professor Malone has also published over 50 articles, research papers, and book chapters; been an inventor on 11 patents; and co-edited three books. Malone has been a cofounder of three software companies and has consulted and served as a board member for a number of other organizations.
|
