Archive for the ‘Entrepreneurial’ Category

We, at the London School of Economics and Political Science, are involved in a study that will provide an independent evaluation of the possible savings to Government through the targeted use of free/open source software (FOSS), differentiating between short, medium, and long term savings. OpenForum Europe (OFE) approached the LSE researchers to undertake this study focusing on the total cost of ownership and acquisition of FOSS. The prime rationale for such a study is that FOSS financial benefits are commonly claimed, but that independent evidence is only available by exception, and may be wrapped in supplier generated reference studies. This study is jointly funded by the UK Government, and the OFE.

Take me to the survey   


A very clear and informative talk by Simon Phipps on what the freedom in ‘free software’ means for companies. This is a really good talk for companies still confused with the idea of where value can be built into open source use (service idea), products, and distribution. The slides for his talk are also available.

Four Reasons To Pay Extra For Software Freedom from SFScon.

This is a very logical talk that steps through licenses (at a broad level) and then progresses to umbrella business models. It ends with the various challenges and issues brought about by vendor lock-in and the confusion the word ‘free’ has created for widespread commercial acceptance of open source.

Another interesting interview at the Web 2.0 Summit, 2010 was that of Mark Zuckerberg of Facebook. Some tricky questions are asked of him by Tim O’Reilly and John Battelle. I don’t find Zuckerberg’s answers very convincing, but that could just be me!

If you are interested in cutting edge technology and the businesses that are making this happen then I strongly suggest you watch some of the archived videos of the Web 2.0 Summit 2010. In particular, the interview of Eric Schmidt (Google) by Tim O’Reilly is very good. Schmidt is asked to comment on the new Google device, Android, face recognition, net neutrality, if Google is planning a Facebook alternative, etc etc. Very interesting, indeed! The Q&A at the end raises some future implications as well.

Nice, straightforward talk by Professor Henry (Hank) Chesbrough today on (For audio recording please see: Open Services Innovation – Chesbrough). The talk was based on his new book Open Services Innovation.

Professor Gary Hamel was also present on the audio call talk. Chesbrough explained his new research and ideas that build on the idea of open services innovation rather than just product innovation. He began with some basics about what is innovation, and open innovation by explaining how nobody has a monopoly on great and new ideas, and how companies need to make more use of the ideas of others. He called for companies to liberate the material and ideas that are held internally with the rest of the world (so long as they are not your core competence, of course). If many companies followed such a model of sharing then we would see more innovation. Using the example of drug discovery he showed how the same discovery can help lead to the cure of more than one disease.

The larger problem here, he acknowledged was that companies and management are built to have an implicit logic of NOT sharing as internal promotion systems etc are all tightly linked to ideas of keeping information to yourself and not sharing. There is active discouragement of sharing.

Such a mindset and internal structures do not allow companies to change. Linking the idea of holding on to the status quo and non-sharing, Chesbrough brought the argument around to the big problem he sees in product innovation – It is limiting, or as he puts it, companies fall into the ‘commodity trap’. Commodity trap simply means that organizations become dependent on merely innovating the product internally. You are thus only as good as your next product. But what makes it harder to sustain differentiation and success is that you can only rely on internal ideas and innovation, and that too in the products area (limited to the design of your last product and how you will you upgrade it etc…. but also new products in a similar area). On the other hand Chesbrough’s research has shown that companies like IBM indicate that more than half of their profit comes from services (this was back in 2004). Why is this not matched with a focus on services innovation then?

Clarifying his ideas, Chesbrough explains that products are not important in themselves – it is the service they deliver that a customer wants. For instance a drill makes holes and it is the hole that the customer wants and not the tool per se. See his slide below on utilization differential.

Open services innovation is one way to avoid the commodity trap. Open services innovation implies building deeper relationships with your customers so you can find other ways of adding value and working closer with each other. He provides three different examples (from various industries to prove that his model does not only apply to technology – Amazon, El Bulli, and TSMC). Opening up your backend infrastructure leads to more innovation.

Some questions asked by the audience:

Q: How does open services innovation avoid the commodity trap?

Chesbrough: Open source business models allow for collaboration at one level and then competition higher up in the stack, the same is true for open services innovation.

Q: How do you differentiate in services models? (asked Chesbrough of himself)

Chesbrough: Services platforms!

Q: If I am in a traditional entrenched Fortune 500 company what do I do to make a change of such a drastic nature in my organization?

Chesbrough: Rethinking management in fundamental ways  is never easy. You could start with an experiment that you can control. Look to your customers for inspiration and observe how they use your products.

Q: How do I retrain my boss to exhibit values of open innovation?

Chesbrough: I feel the commodity trap example helps to dissuade managers from becoming too entrenched.

Q: How does one use the lessons of open innovation and translate them to social innovation?

Chesbrough: Use the platform to innovate with ideas, as you would for products and services.

Professor Gary Hamel asks Professor Chesbrough: Platforms are competing with each other like Apple versus Android (Google)? You say there is no longer a first mover advantage? So where is the advantage?

Chesbrough: We are not beyond competition. It is clearly not a first mover issue these days but companies can gain by building a more robust and faster working network.

I began to watch this video with the idea that this will be a ‘business’ talk that will bore me to death. I couldn’t have been more wrong. Is Mr Caan an entertaining speaker – no doubt about it, but that was not what held my interest till the end. It was his humanity and understanding of people. He seems to want people to ‘speak to him’ through their business models. Perhaps I am guilty of being soppy but I really felt that no matter what anecdote he told the LSE crowd of students and faculty, it came from the heart and he wants the entrepreneurs he finances to care too.


He offers entrepreneurial advice to the audience, again using his own experience and failures. I have a deadline or else I would summarize his talk here. I must come back to my notes later! I hope you enjoy the video courtesy of LSE Public Events.