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 The Goldcorp Challenge: Took place
  online August 2000 – March 2001.
 Shared over 400 megabytes of proprietary
  geological data
 $575,000 prize money
 Over 1,000 virtual prospectors
 Shaved 203 years off exploration time
 Went from 100 million to $9 billion
The significant Problems we face cannot
 be solved at the same level of thinking
   we were at when we created them.

              Albert Einstien

 Outsourcing of ideas to large undefined
 Open calls for help
 The hive mind
 Collective problem solving
 Cheap!

       Principles of Wikinomics
1.   Being Open
2.   Peering
3.   Sharing
4.   Acting Globally

Static Web vs programmable Web

  Flickr beat webshots
  Wikipedia beat Britannica
  Blogger beat CNN
  Epinions beat Consumer-Report
  Google Maps beat MapQuest
  MySpace beat friendster
  Craigslist beat Monster
  Mozilla Firefox gaining on IE Browser

 Blog is the biggest coffeehouse on earth
 Blog can capture people’s thoughts
 Blog turning the static document into
  running conservation
 Firm use blog for “listening in ” customer
 Richer and more engaging: audio and
  video posts

     Critique of Blogosphere
 More noise in an oversaturated
 Their critique is trite

 Technorati (
 Ice Rocket (

        The demographic Watershed
          Growing up collaborating

   The shared Space
     Adult control the home, the school
     Teens do not see home as their private space.
     Hanging out around the neighborhood or in
      wood has been deemed unsafe.
     The new private space is on line

                 Net Generation
   They are not passive recipient
     of mass consumer culture.
   They spend time searching,
     reading, scrutinizing, authenticating,
      and organizing everything.
   They have a very strong sense
     of common good.

                 Coase’s Law
   Why vertically integrated corporation ??

                  Transaction Cost
                     Search Cost
                   Contracting Cost
                  Coordinating Cost

   Firms should shrink until the cost of performing a
    transaction internally no longer exceeds the cost
    of performing externally.

Coase’s Law
 Apple’s b-Web

           Peer Production
 Self-organizing, egalitarian communities of
  individuals who come together voluntarily
  to produce a share outcome
 Voluntary and non-monetary
 Little cost
 Best people to right tasks
 General public licenses

              Peer Production
   Three conditions
     The object of production is information
      or culture
     Tasks can be chunked out into pieces
     The cost of integrating pieces into finished
      goods is few

          WIKIPEDIA in figures
 2001: 15,000 articles
 2009: 2.7 million+ articles
 100,000 users posted 10+
 75,000 regular editors
 5 Paid staffers

 1998: IBM join open source community
 Harness the power of the crowd at a
  fraction of the cost.
 Opened up their proprietary code to the
 IBM spends $100 million per year on Linux

 Someone outside your organization today
  knows how to answer your specific
 You need to find them, and find a way to
  work collaboratively and productively.

 Solutions in search of question
 P& G now make every patent in its
  portfolio available for license to any
 AT&T, IBM, and Texas instruments have
  built there IP business highly lucrative.

   Online technology transfer place:
Questions in search of solutions

            The Prosumers (hack this product please!)

   “Our community is an opportunity to look at the rules that govern our
    society, and to extent that we are able to rewrite them as best
    seems to fit us” – Philip Linden.
   The word prosumers is defined as product that are created by its
    customers and are then consumed by themselves.
   This chapter describes a new model of prosumption where
    customers actually co-innovates and co-produces the product they

   This chapter explains how prosumer communities introduce both
    lucrative opportunities and gave new threats to companies.
   This means that the consumers will treat the world as a stage for
    their own innovations.
   Customers as Co-innovators – There has been many episodes of
    user–driven creativity in the history of inventions. Ex: In early
    nineteenth-century England, Cornish steam engine makers
    collaborated openly with mine owners to improve the efficiencies of
    steam engines.

   Control versus Customer hacking – As prosumer communities
    proliferate, companies face increasingly tough choices about how
    to interact with them.
   Lead users of Apple iPod have always surmised that iPod could
    be much more than a digital music player. But, the company has
    tightened its lips about the customers input as they are riding the
   Although Apple is silent but, sooner or later will unleash his lawyer
    for so called “Product Hacking”. Similarly,
   Smart companies will bring their customers and give them lead
    roles in developing next-generation products or services.

   Remix Culture – The difference today is that technology makes
    easy for people to remix culture and share it on a much larger
    scale. People can share their remixes in thousands at web.
   This remix culture originated through the endeavor to reshape the
    existing creations with more attractive features.
   Therefore, as the software to manipulate and remix proliferates,
    fresh new careers emerged. But on the same note copyright law
    also came into effect.

   Prosumption is different from Mass Customization. Presumption
    entails deeper and earlier engagement in design processes.
    Whereas, mass customization entails mixing and matching pre-
    specified components.

   Future of Prosumption – Listen to your customers and run design
    contests or other such promotional schemes or anything that will get
    your loyal customers to share their intellectual capital.

    The New Alexandrians (Sharing for Science and the
                  Science of Sharing)

   Take the sum of mankind’s knowledge and share it for the
    betterment of science, the arts, wealth and the economy. The new
    age of collaborative science is emerging that will accelerate
    scientific discovery.
   The Science of Sharing – Collaboration, publication, of
    precompetitive information are now becoming keys to success in
    the knowledge –based economy. In the same way digitization of
    information is also putting in the sharing of information.
   Today in networked economy, companies that don’t share are
    finding themselves isolated, by passed by networks that share,
    adapt and update knowledge to create value.

   The Age of Collaborative Science – Just as the new
    organizational model of knowledge is being created, the new Web is
    helping to transform the realm of science endeavored by:
   Rapid diffusion of best techniques.
   Availability of just in time expertise.
   Increasingly horizontal and distributed models of research.

   Above all, the new scientific paradigm will be truly global, swelled by
    the participation of millions of scientists from across Asia, South
    America and Eastern Europe.

   Similarly, as the pace of the science quickens stashing new ideas
    will be of less worth as compare wide open collaborative
    knowledge platforms that are refreshed with each new discovery.
   Rethinking Industry-University Partnerships – Advancing the
    basic sciences is really the only way to guarantee innovation in
    industries for long time.
   If the well of knowledge dries up, so too does innovations. Today it
    is more important than ever that R&D activities are fast and
    efficient and earn a clear ROI.
   Indeed, smart firm looks university partnerships as a nimble and
    cost effective means for detecting and launching disruptive

   An example of industry-university partnership is Intel’s Open
    University Network. In 2001, Intel established exploratory research
    labs adjacent to University of California at Berkley and University of
    Washington in Seattle.
   Making the most of University Partnership –
        Use industry-university partnerships to shake up product road maps.
        Make sure the collaboration is a win-win.
        Deepen and broaden collaboration across research communities.
        Keep the science open and the applications proprietary.

   Pharmaceutical firms like Mercks with an annual R&D budget of $3
    billions conduct less than 1%of biomedical research in the world and
    remaining 99% conducted in universities and public research

Platforms for Participation (All the World is a stage, and
                     you’re the star)

   We are entering a world where vast open platforms for
    participation provide a foundation on which large communities of
    partners can innovate and create value.
   A platform might be a Web service such as Google maps or
    Amazon that might include an e-commerce system.
   So, the main idea is to Open up the platforms to increase the
    speed, scope, and success of innovation.
   By tapping open platforms one can leverage world class
    infrastructures for a fraction of the cost of developing them
    yourself. The Web-indeed the world-is your stage, so deliver the
    star performance.

   Platforms for Web Services and communities – The notion that
    innovation proceeds through the recombination of existing ideas to
    form something new is not unique to the Web.
   Platforms for Commerce – Amazon, eBay are the examples how
    platforms of commerce can give rise to activities like shopping.
    Amazon’s platform for participation spurs two things: innovations
    and viral growth.

   Platforms for Grassroots Actions – Government agencies are
    one of the largest sources of public date that often remain
    unutilized although, it can provide platform for countless new
    public services.

   The best use of public data can be made by nonprofit
    organizations that are free of political considerations.

   As new Web evolves, platforms for participation are becoming the
    competitive standard for top online properties. Companies that
    attract and reward the best participants have the opportunity to
    create new sources of competitive advantage.
   Winning with an Open Platform – Following are the three points
    that stand out for the discussion of open platform business.
       Applications of a new technology go through an evolutionary process i.e.
        reshaping the existing creations.
       Radical decentralization and openness create tricky environments in which to
        build genuinely viable business models.
       Platforms for participation will only remain viable for as long as all the
        stakeholders are adequately compensated.

      The Global Plant Floor (Planetary Ecosystem for
              Designing and making things)

   Rise of the Global Plant Floor – The key message in this book is that
    the old monolithic multinational that creates value in a closed
    hierarchical fashion is dead. Wining companies today have open
    and porous boundaries and compete by reaching outside their walls
    to harness external knowledge, resources and capabilities.
   Although, local production had still has its advantages. Producing
    locally provided an opportunity to tailor products to local taste. But,
    this market-by-market approach no longer make sense in a global
   The collaborative approach allows companies to tap best-in-class
    capabilities without the headaches accompanying the need to
    manage a full-blown merger or acquisition.

   Boeing is establishing a new competency in managing a globally
    extended partner base. Boeing is using state of the art collaboration
    technologies to transform a traditional collection of suppliers into a
    seamless global collaborative.
   Harnessing the Global Plant Company – Following are the lessons
    after reviewing the collaborative processes for designing and
    building physical things as in the case of Boeing.
        Focus on the critical value drivers.
        Add value through orchestration.
        Install rapid, iterative design processes.
        Harness modular architectures.
        Create a transparent and egalitarian ecosystem.
        Share the costs and risks.
        Finally, keep a keen futures watch.

                        Wiki Workplace
                   Unleashing the Power of Us

   More employees are using blogs, wikis, video games to collaborate
    and form ad hoc communities across departmental and
    organizational boundaries.
   Rise of openness, peering, sharing and acting globally in future
   Shift from closed, hierarchical workplaces, rigid employment
    relationship to self organized, distributed, collaborative human
    capital that draw knowledge and resources from inside and outside.

                    Geek Squad –An Example

   Employees use wikis, video games to brainstorm new ideas,
    manage project, swap service tips and socialize with peers.
   Up to 384 colleagues simultaneously use online multiplayer games.
   Bottom up communication and product development.
   Designed folding flash drive with thin loop for key chains.

                      Rise of Wiki Workplace

   Work is more cognitively complex, team based, collaborative,
    require social skills, time pressured, technology dependent, mobile
    and less geographical dependent.
   Organizations are dispersed, leaner, agile, customer focused,
    dynamically competitive and offer less job security and lifelong

    Net working technologies offer companies to run cohesive yet
    decentralized operations by linking employees in virtual teams and
    communities of practice.

   Bringing high technology adoption, creativity, social connectivity, fun
    and diversity in workplace.
   Networked business with webs of partners on a platform of
    information technology.
   Tools such as blogs, wikis, chat rooms, peer-to-peer networks,
    personal broadcasting,instant messaging, online multiplayer games
    are weapons of mass collaborations.
   Net Gen has experience of these mass weapons as part of birthright
    unlike earlier generations who have to adapt.

                     Point of Discussion

Some business thinkers claim that
“Letting a thousand flowers bloom” ends up giving companies a lot
of weeds, diluting their focus on few big ideas that “move the
needle” in multibillion-dollar companies.
“Getting other points of view and knowledge into our learning system
that might escape is key to success as an organization” says
Anderson, CEO, Best Buy

              Social Computing in Enterprise

“A lot of organizations are using wikis without top management even
knowing it . It’s a bottom-up phenomenon. The CIO may not get it,
but the people actually doing the work see the need for them”
John Seely Brown, Chief Scientist Xerox

Real innovation can occur when companies take time to observe
how the existing workplace culture operates in a “state of nature”
and then learn how to serve that culture effectively.

   Wikis conform naturally to the way people think and work, and
    flexible to evolve in a self organizing fashion because wikis are
    completely unstructured.

    “The structure is created by demanding active involvement from
    users in ways of organizing and creating their own information
                                  Ross Mayfield, CEO, Social Text

                     What to Expect in Future?

   Workplaces will become smaller with distributed teams from all over
    the globe.
   Consultancy to be dominant contractual model for work.
   Share of profits derived from intellectual contributions.
   Freelancers, entrepreneurs, SMEs taking a larger share of economic
   New peer-to-peer rating services to play a greater role in identifying
    high quality reliable collaborators.
   Talent agencies, auctions and markets will have a larger role
    between employer and employee.

                     Collaborative Minds
                The Power of Thinking Differently

   Just as good investment strategies diversify across low-high risk
    opportunities, good innovation strategies diversify intellectual
    property holding across open and closed offerings.
   Opening up IP in one area of business could boost demand for
    complementary products and services.
   Pooling competencies and reducing R&D costs exceeds the benefit
    of exclusive rights in knowledge produced.
   Openness removes unnecessary friction in collaborative projects.

                 Wikinomics Design Principles

1.   Taking cues from your lead users
2.   Building critical mass
3.   Supplying an infrastructure for collaboration
4.   Take your time to get the structure and governance right
5.   Make sure all participants can harvest some value
6.   Abide by community norms
7.   Let the process evolve
8.   Hone your collaborative minds

“The technologies that come along and change the world are the
simple, unplanned ones that emerge from the grass roots rather
than those out of corner offices of the corporate strategists”

            Tim Bray, Sun Microsystems