This is the fifth draft; it will evolve based on your feedback. First published on 6/19/12. Last modified on Jan 13, 2026. Come back later for more...
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More and more solutions to our problems today come in the form of
open artifacts, i.e open source software and hardware, created by online communities and networks. Traditionally, most of these communities have relied on voluntary participation or some type of
gift economy, i.e. the developers do not expect a direct or immediate tangible reward for their contributions. These
open artifacts have been regarded as marginal, mostly intended for amateurs and hobbyists. How can one expect serious things to come out of loose organizations that don't use the prescribed governance model and methodology, and don't have access to a large budget? At least this was the unadvised belief, until we realized that critical infrastructure, like the Internet, runs mostly on
open source software, created and maintained by these unorthodox organizations. Ingenuity, t
he helicopter drone, part of the Perseverance mission to the planet Mars, operates on Linux, which is an open source operating system. Bitcoin, runs on
open source software and is supported by an
open group of people (miners), who can be practically anyone with a computer and an Internet connection. Since Bitcoin was launch in 2009, no one has hacked it, despite the astronomical reward, ranging in the tens of billions of dollars, if we only consider the abandoned accounts of Satoshi Nakamoto, the creator of the network. So some
open artifacts developed by unorthodox organizations are pretty serious, highly secure, mission critical, or operating at global scale. There are also lots of crappy ones, as there are crappy products offered by serious companies.
What I call playing the open game is developing open artifacts (based on open source technologies) relying on unorthodox organizations and being able to make a living.
There are a few important components to the open game...
First, there's the intellectual property regime. Open source means that no one can create a temporary economic monopoly on a particular solution, as it is the case with products based on patented technologies. If one cannot control the artifact how can one capture value or generate wealth?
In the most simple terms, how can one make money developing open source technologies. My first reaction to this question is to point to the obvious:
- IBM has invested billions of US dollars in Linux and other open source technologies. ref
- Google has gained mobile dominance by opening Android, the mobile operating system.
- Tesla has engaged in a hybrid IP strategy, i.e. open source patented.
The second order economic model
It becomes possible to generate wealth while developing open source technologies, if the business model is not simplistic and/or linear. In most viable cases, whatever is open source is not the product, but by open sourcing some technology in the IP portfolio, these companies produce some effects within their ecosystem, which they can harvest or leverage for their core business. In the case of Google, opening Android increased its adoption rate, while propagating some core Google functionalities, thus putting Google services in billions of mobile devices, which then could be monetized using Google's core business model. We also see a second order kickback pattern with online services like Facebook, where free access is given to a digital service (search or connecting and interacting with people), while making money from selling users' generated data or attention. So we need to stop thinking about business as a simple and linear process, as simply transactional.
A similar example of second order economic model, extended to a whole community or ecosystem, is
Tiki, an
open source wiki CMS groupware? The wealth generation model is similar to Red Hat, the poster child, based on support, training, and consulting services around the core
open artifact, which is offered for free.
At this point, I find that is it important to raise to your awareness the fact that the wealth generation model is not the same when the technology is software or hardware. It is beyond the scope of this post to dive deeper into this distinction, but if you're interested, we can discuss in the comments.
Note that I have deliberately use the term
open artifact instead of
product and the expression
wealth generation or
economic model instead of
business model, to avoid cognitive interference. When we say
product people think about
commodity, something that you can buy/sell on the market. But you cannot sell the Linux operating system (an open artifact), which defies the law of supply and demand, as it is an abundant, non-rivalrous resource, since its reproduction (copy/paste) and distribution (download) costs are negligible. The case of
open source hardware is not the same, but similar. The costs for reproduction and distribution are high for material artifacts, but since everyone has access to the design, anyone can fabricated it locally, (see more on
distributed fabrication and DIY - Do-It-yourself), making use of digital fabrication techniques (3D printing, CNC, etc.).
Beyond money
So what about the expression wealth generation?
When we say wealth most people think about money. When engaging in open source development, people are seeking other forms of wealth, for what they are in themselves (or for a later conversion into money, monetization). For example, someone may want to contribute to an open source project to learn new skills, to develop new relations with people that have specific skills or that share specific values, or to build reputation. In some cases, when money is introduced as a motivation factor in open projects the social cohesion breaks down.
So playing the open game requires a renunciation of mechanisms of control of intellectual property, which entails the refusal to create a temporary monopoly and thus the adoption of more sophisticated economic models or the adoption of different forms of wealth or new forms of value. But the open games deploys within a very different organizational environment, to which we already alluded above, as most of the time the open artifact emerges from open organizations or networks.
p2p as a new organization paradigm
Recently, we have witnessed the emergence of new economic models that brake away from the
gift economy, directly rewarding those who contribute (with time, financial capital, social capital, ...) to
open projects. The open artifact is gradually becoming sustainable.
The first step in this direction can be illustrated by Open Source Ecology, which designs open hardware for farming, construction and manufacturing.
The designs are entirely open and free, but the Open Source Ecology community is not interested in commodification, i.e. market exchanges, their designs made with DIY (Do It Yourself) in mind, destined to be produced by the user, or very close to the point of use. In the case of Open Source Ecology their model for subsistence is based on revenues in fiat currency, from donations or educational services.
Open crowdsourcing is another model in which designers, part of an (open) community, are rewarded to complete a project. This scheme doesn't only rely on donations or voluntary participation, since those who contribute are rewarded in exchange with some symbolic gifts (tokens of recognition), reputation tokens,
job opportunities, etc. Arduino is an example of such model, a hybrid between the open (value) network OVN and a traditional business, which relies on a vast community of enthusiasts to propose new designs, find and eliminate bugs, engage in promotion, etc.
There are also closed and non-transparent crowdsourcing initiatives, such as prizes, in which only the best contributors are rewarded. Contributors are often placed in competition against each other. The resultant designs or artifacts are closed and remain under the control of the initiator. We are definitely against this new form of human exploitation, as you can see in this post.
