Slides used for Open Business Models workshop with OERu Oceania partner institutions at University of Southern Queensland 27 Aug-2015.

1. Except where otherwise noted these materials are licensed Creative Commons Attribution 4.0 (CC BY)
27-Aug-2015
Paul Stacey
Associate Director of Global Learning, Creative Commons
Building an open source business by Libby Levi licensed CC BY-SA
Oceania OERu Regional Meeting
Open Business Models

2. http://thepowerofopen.org/

3. http://teamopen.cc/piya/
http://teamopen.cc/max/

4. https://www.kickstarter.com/projects/creativecommons/made-with-creative-commons-a-book-on-open-business
http://creativecommons.org/weblog/entry/45022

5. Goal Setting for The Day
Empty Net by Jeff Wallace licensed CC BY-NC
One page OERu partner
institution open business
model from each of you
that supports goal 3 of
the OERu – “Achieve a
fiscally sustainable &
scalable OERu network.”

6. Getting Open Business Model
Design Juices Going (11-11:45)
Photo by andriuXphoto licensed CC BY-SA

7. Closed Innovation Paradigm
Chesbrough, Henry William (2006). Open Innovation: The new imperative for creating and profiting from technology. Boston: Harvard Business
School Press. pg. xxii.
Based on the belief that successful innovation requires control.
Companies must generate there own ideas, then develop them, build them, market them, distribute
them, service them, finance them, and support them, on their own.
Closed innovation counsels businesses to be self-reliant and internally focused.
To be sure of quality, availability, and capability you’ve got to do it yourself.

8. Open Innovation Paradigm
Chesbrough, Henry William (2006). Open Innovation: The new imperative for creating and profiting from technology. Boston: Harvard
Business School Press. pg. xxii.
Doing it all yourself fails to productively make use of new knowledge and ideas outside your business.
Open innovation combines both external and internal ideas to create value.
In addition, ideas can be taken to market through external channels, outside the current business of the
firm, to generate additional value.
Open innovation requires less control and more collaboration

9. Revenues
Costs
Own
market
revenue
Internal
development
costs
Own
market
revenue
Internal &
external
development
costs
The New Business Model of Open Innovation
License
Spin-off
Sale/
divestiture
New revenues
Closed model
Open Innovation
business model
Cost & time savings
from leveraging
external development
Chesbrough, Henry William (2006). Open Business Models: How to thrive in the new innovation landscape. Boston: Harvard Business
School Press. pg. 17.

10. Open Source Software
http://www.catb.org/~esr/writings/cathedral-bazaar/magic-cauldron/
Magic Cauldron Essay
Use-Value Funding Models
• Cost-Sharing
• Risk-Spreading
Indirect Sale-Value Models
• Loss-Leader/Market Positioner
• Widget Frosting
• Give Away the Recipe, Open a Restaurant
• Accessorizing
• Free the Future, Sell the Present
• Free the Software, Sell the Brand
• Free the Software, Sell the Content

11. Open Source Software
System integrators sell a stack of
hardware, software, and services.
Integrators can charge customers similar
prices even if they use open source software.
How does business model
change if you use open source
software?
Dirk Riehle. “The Economic Motivation of Open Source Software: Stakeholder Perspectives.” IEEE Computer, vol. 40, no. 4 (April 2007).
Page 25–32. The paper is available as a PDF file as well as online. © 2007 IEEE.

12. Open Source Software
Dirk Riehle. “The Economic Motivation of Open Source Software: Stakeholder Perspectives.” IEEE Computer, vol. 40, no. 4 (April 2007).
Page 25–32. The paper is available as a PDF file as well as online. © 2007 IEEE.
Switching to open source software can
result in more customers and higher profits.
How does business model
change if you use open source
software?

13. https://medium.com/medium-writing-prompts/why-give-away-your-work-for-free-5ed4513d5fa8

14. If what you have is good, just give it time. "Viral" growth is exponential, but it can take a while.
Or you can use advertising to artificially direct audience attention to something they wouldn't
care about otherwise. If the work is not good, interest will drop off when advertising does.
Understanding Free Content by Nina Paley
http://questioncopyright.org/understanding_free_content

15. What does Nina Paley do?

16. Many cultural institutions hold material that is in the public domain. This does not mean that they also have
to publish it for free. The Rijksmuseum has, like most art museums, an image bank where they sell digital
copies of images. When at the end of 2011 they started releasing images, they offered two sizes. The
medium quality image (.jpg, 4500x4500, +/- 2MB) was available free to download from their website
without any restrictions. When the user clicked on the download button, a pop‐up asked the user to
attribute the Rijksmuseum as a courtesy. If the user was looking for the master file (.tiff and up to 200MB)
they were charged €40.
Democratising the Rijksmuseum by Joris Pekel, Europeana Foundation
http://pro.europeana.eu/files/Europeana_Professional/Publications/Democratising%20the%20Rijksmuseum.pdf
What does Rijksmuseum do?

17. €181,000 revenue is quite high, but represents only 0.2% of the total revenue of the
Rijksmuseum during that period. Total employee costs were about €100,000 per year.
In October 2013 the Rijksmuseum decided to no longer charge for public domain images that
were already digitised and started releasing their highest quality images for free. They
preferred instead to focus their efforts on generating project funding from art foundations in
order to digitise an entire collection. Such administrative costs are much lower, as a
transaction is only made once and is a lot easier to handle than multiple private individuals.
For the Rijksmuseum the revenue from image sale was relatively small and they decided to
abandon it all together as a way to create more goodwill, get more people familiar with their
collection and attract them to come to the museum.
Democratising the Rijksmuseum by Joris Pekel, Europeana Foundation
http://pro.europeana.eu/files/Europeana_Professional/Publications/Democratising%20the%20Rijksmuseum.pdf
https://www.rijksmuseum.nl/en

19. Ostrom’s Commons
Analysis & Design Framework
How is the digital commons different
from the physical commons?
Cost of storage, copying, & distribution almost $0.
Cannot be depleted but artificial scarcity frequently practiced.
Global and local. Empowers individual action independent of gov’t & market.

20. How is open different from free?
5Rs: The Powerful Rights of OER
• Make, own, and control your own copy of
the contentRetain
• Use the content in its unaltered formReuse
• Adapt, adjust, modify, improve, or alter the
contentRevise
• Combine the original or revised content with
other OER to create something newRemix
• Share your copies of the original content,
revisions, or remixes with othersRedistribute

21. Your Business In The WE-Economy
The levels of user
engagement in value
creation follow a long
tail.
At one end of the
scale are lots of
users contributing a
bit of feedback — at
the other end are a
few super-users co-
creating products as
experts.
What’s new is that
companies are
opening to input, and
that customers are
willing and able to
participate to a
greater extent.
Education business
model
implications?
Your Business In The WE-Economy
http://we-economy.net/?page_id=928

22. https://www.flickr.com/

23. In October 2014, Flickr announced a new service that allows its members to order printed photos on wood
or canvas, choosing either from their own photos, from a set of curated images, or from about 50 million
CC BY or CC BY-SA–licensed images. Flickr would share profits with the photographers of the curated
images, but not the CC-licensed ones, as those licenses permit Flickr to use the photos commercially.
Creators with copyrighted images are compensated 51% of what Flickr collects. Flickr keeps 100% of the
proceeds from the CC licensed images.
https://www.flickr.com/create

24. Public Reaction
Generosity taken advantage of unfairly.
Flickr adding little value add & exploiting photographers.
CC photographers could have kept their images to themselves and
gotten half of the fee, instead of Flickr taking all of it.
Demotivating/deincentivizing to people who share their work.
Not legally obligated, but social obligation?
What would you do?

25. 470 co-authors from 45 countries
Used globally by startups and big corporations.
Start with - What is a business model?
Business Model Building Blocks
11:45- 12:30 pm

26. Business Model Generation Canvas
licensed CC BY-SA

27. Open Business Model Canvas Remix

28. Open Business Model Building Block Questions

29. Design your institution’s OERu business model
Using open business model canvas design:
• Customer segments: Who are the customers you are
targeting or intending to serve through OERu?
• Value proposition: What value proposition are you
providing each customer? What are the bundles of
products and services you are offering and what
customer needs do they fulfill?
• Social good: What social good is being generated
(beyond revenue or profits)
• Revenue: What revenue will be generated through
OERu activities? How will customers pay? How much
will they pay? Will this fund your OERu activities?

30. Lunch
12:30-1:30 pm

31. Designing OERu Business Model Designs
1:30-2:30 pm
Share initial designs
Group work to design one or two business
models based on commonalities
Focus on new revenue opportunities and/or
community service/social good priorities

32. OERF open business model for the OERu
Wayne Mackintosh

33. Next Steps
2:30-3pm
• What do we need to do in preparing the
business model submission for the OERu
Council of CEOs meeting on 9 October 2015?
• How will the OERu partners know what
business model factors are working and what
isn’t?
• What does success look like from a business
point of view?
• Mapping the evolution of open business
models over time. How will the model adapt?

34. Paul Stacey
Creative Commons
web site: http://creativecommons.org
e-mail: pstacey@creativecommons.org
blog: http://edtechfrontier.com
presentation slides: http://www.slideshare.net/Paul_Stacey
News: http://creativecommons.org/weblog
Facebook: https://www.facebook.com/creativecommons

35. 470 co-authors from 45 countries
Used globally by startups and big corporations.
Books