Homework Assignment: Peer Production and Open Source

20

October

2015

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The first article is an interview conducted by Josh Hyatt (2008) for the MIT Sloan Management Review. The interviewee, Marten Mickos, is chief of MySQL. MySQL is the most popular open source database with a community consisting of 12 million coders who receive no compensation. In this interview, Josh Hyatt aims to discover how open sourcing can generate incredible innovation; what motivates innovators; what drives contributors; and why the number of companies making their source code available to everyone is growing. This article seemed relevant to me for companies as it gives great insights into the “secrets” of companies doing so well in open-source innovation. However, I would have preferred more information on why Mickos believes more companies are engaging in open-source innovation.

The second article, by von Hippel and von Krogh (2003), distinguishes two models of innovation: the private investment-model and collective action-model. In this article, the author advocates that open sourcing is part of a private collective-model, as it has inherits aspects of both models. Their reasoning behind this is that contributors use their own resources to privately invest in creating a software code and then choose to freely release it as a public good. I found this article interesting as it gave a different perspective to open sourcing. I do think it might be slightly outdated, as it has been published 12 years ago. Since then, I believe open sourcing has shifted more and more towards the collective action-model. Open sourcing nowadays includes communities of over 12 million coders; hence I believe there is less focus on private interaction.

The third article, written by Zhang, M. and Zhu, F. (2011), studies how incentives to contribute to an open-source network change with group size. In October 2005, Chinese Wikipedia experienced an exogenous disturbance, namely that the website was blocked to all users and contributors on mainland China. As a result, contribution levels of non‑blocked contributors shrunk by 42.8 per cent. Zhang and Zhu found that contributors receive social benefits from contributing, and that a smaller group size reduces these social benefits.I found that this article gave some interesting insights into how group size has such a major impact on perceived social benefits. It emphasizes that many contributors would rather contribute to a large online community. This article can be relevant to any company, as it would urge them to focus on increasing their community base prior to initiating an open-source database and to continue growing after this point.

To gain more knowledge about why more and more companies are engaging in open sourcing, I searched for an additional article.

In an article by Baldwin (2014), four reasons are discussed why businesses say yes to open sourcing. The first reason is that open sourcing reduces costs. The second reason is that it improves quality. If the source code is flawed, the developer community will quickly identify and erase the flaw. The high quality comes from a large community continuously contributing, testing and reviewing the product. Thirdly, open source delivers business agility. As open sourcing facilitates fast software developments, companies can react to demand on the market place quickly. They are not waiting for vendors to make the changes they want, which would slow down the development process. Finally, open sourcing reduces business risk, as companies are not dependent on one or few vendors. I found this article very helpful if you are new to open sourcing and want to get an idea of its advantages. I did have some critique with regard to quality and risk. Companies will never be able to guarantee whether the community consists of merely professionals and hence if quality can be maintained. At the same time, the company could increase its business risk, as it cannot ensure quality is maintained. If quality is below standards, the company has no right to sue anyone.

References

Zhang, M. and Zhu, F. 2011. Group size and incentives to contribute: A natural experiment at Chinese Wikipedia. American Economic Review 101(4) 1601-1615.

Baldwin, H. 2014. 4 reasons companies say yes to open source. Available: http://www.computerworld.com/article/2486991/app-development-4-reasons-companies-say-yes-to-open-source.html?page=4.

Hyatt, J. 2008. The oh-so-practical magic of open-source innovation. MITSloan Management Review 50(1) 15-19.

von Hippel, E., and von Krogh, G. 2003. Open source software and the“private-collective” innovation model: Issues for organization science

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MyStarbucksIdea.com: Starbucks’ Succesful Crowdsourcing Platform

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October

2015

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Schermafbeelding 2015-10-20 om 16.29.04

To warm everyone up for this weeks topic, I did a little research on crowdsourcing. Crowdsourcing is the process in which companies or individuals engage a ‘crowd’ to contribute to a specific project or cause. Usually the crowd will benefit from their contribution, hence there is a common goal, which is often efficiency, innovation or problem solving (Crowdsourcing Week 2015).

An example of a company acing crowdsourcing is Starbucks and its successful platform MyStarbucksIdea.com. The platform was launched in 2008, which positions Starbucks as one of the first adopters of engaging a crowd in product development on such a large scale. In the year of the launch of the website, consumers had submitted over 70,000 ideas, generating valuable information to the company. In 2014, over 190,000 ideas were submitted, of which 300 have been implemented by Starbucks (Gurley, G 2014).

The platform is built for customers to submit ideas for better products, ways to improve the customer experience, and allows customers to provide feedback on products and experiences. This provides Starbucks with free ideas, feedback, customer loyalty, an edge over its competition and the ability to replace costly and lengthy focus groups for product development. On the other hand, consumers are eager to contribute as they have the opportunity to create a better product for themselves. Customers tend to get annoyed when companies make numerous changes without consulting their opinion. Hence, Starbucks has created a win-win situation for the company and customers.

Everyone can create an account on the website and submit their own ideas, vote and comment on ideas submitted by others. This virtual platform has become an online community with the goal to share and discuss ideas revolving around Starbucks.

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Infographic showing the growing number of submissions and implemented ideas 2008-2012

What do you think about MyStarbucksIdea.com and similar platforms? Why do you think some companies are still lagging behind when it comes to this type of social media engagement? Is it hard to implement? Can you think of any drawbacks of crowdsourcing?

References

Crowdsourcing Week. (2015). What Is Crowdsourcing?. Available: http://crowdsourcingweek.com/what-is-crowdsourcing/. Last accessed 19th Oct 2015.

Gurley, G. (2014). Starbucks’ Crowdsourcing Success. Available:
http://blog.betterific.com/2014/03/25/starbucks-crowdsourcing-success/. Last accessed 19th Oct 2015.

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Path: the private social network

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October

2015

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path

A few years ago I began to notice tweets of friends including an image with the text: “Find me on Path!” followed by a username and, for example, “7 moments”. Straight away I recognized this had to be a new social media network. Enthusiastically I navigated to the App store on my iPhone and downloaded the app.

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As you may have found striking in the title of this post, Path is a private social network. What exactly does that mean? Founder of Path in 2010, Dave Morin, aimed to create an intimate social network where one could share photos and updates (“moments”) with a closed and small network of friends. In order to force users keep this social network private, Path allowed a user to have a maximum of 50 friends. The company began with an iPhone app and website, then gradually extended to offering the app to Android, iPad and Windows users.

“Our long-term grand vision here is to build a network that is very high quality and that people feel comfortable contributing to at any time.” – Dave Morin

After having used the app for about a week, I noticed that many of my friends weren’t actively using it and found it fairly boring. Regardless of the beautiful design and playful elements in the app, it just did not take off. The tweets attracting users started to diminish and after a couple of months I had forgotten that it had ever existed. Only today, the network got me thinking! What had gone wrong with Path? Why did it fail?

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After having done some research, I found that Path has changed considerably since their launch in 2010. In 2012, they were urged to increase the maximum number of friends from 50 to 150. They are also planning on developing new apps to enrich the platform and make it more similar to large social networks. Hence, focussing less and less on being a private network (Bhuiyan, J 2014).

In theory, the idea of having a private network with close friends and family sounds appealing to many people, however the “privacy” of the network is the main reason for its failure. Many people found that in practice, the app turned out to be highly limiting and boring. Many users struggled with the small reach compared to social networks as Twitter and Facebook. Isaac Budmen described the application as “woefully insubstantial in meaningful content” (Budmen, I 2012).  I found it interesting to discover that many people are not necessarily on social networks for their close friends and family, but mainly for everything beyond this.

Today, Path sees 4 million users per day, allows up to 500 friends and still promotes itself and individual profiles with the hashtag #thepersonalnetwork. With every app update, the app moves further and further away of the private network it was upon its launch. What do you think of the idea of a private social network? Would it appeal to you? What would you (not) miss compared to regular social networks? What do you seek for in a social network? Have you ever heard or used Path?

If you are interested in trying out the app it is still available in mobile app stores!


References 

Bhuiyan, J. (2014). Path, The Personal Social Network, Battles To Be Popular Too. Available: http://www.buzzfeed.com/johanabhuiyan/path-the-personal-social-network-battles-to-be-popular-too#.gjplYxBQMR. Last accessed 1st Oct 2015.

Budmen, I. (2012). Path: Private Social Network with Good Interface, but Lacking in Substance. Available: http://infospace.ischool.syr.edu/2012/01/16/path-private-social-network-with-good-interface-but-lacking-in-substance/. Last accessed 1st Oct 2015.

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Social commerce: where social media meets e-commerce

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September

2015

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Most of us are acquainted with the terms Social media and E-commerce, however we might not all be familiar with the growing trend of Social commerce, which has generated 30 billion US dollars sales worldwide in 2015 (Statista 2015). According to Handshake.com (2015), it is how engaging in Social media results into online sales transactions. But why exactly is social commerce so important and what distinguishes it from traditional e-commerce?

Nowadays, strolling through a shopping mall whilst discussing potential purchases with a friend is an increasingly uncommon phenomenon. For multiple reasons (time efficiency, lower prices etc.), people have increasingly chosen to scroll through a list of products before adding a selection to their virtual shopping basket. In the process, consulting others experiences or opinion are largely neglected. Separating itself by increasing the social aspect of shopping, social commerce emerges.

Social commerce provides customers with a great deal more than merely a list of products (also known as traditional e-commerce); it promotes social interaction and user contribution to improve products and consult potential customers. Social commerce allows one to explore products in greater depth by engaging with previous purchasers through reviews and comments. Often, companies will provide rewards such as discounts for liking and sharing their product or service, as it will increase the products range.

“Any social commerce shop should have the capability to; share, like, tweet, comment, review and buy on the platform. Because ultimately it’s about getting people talking and sharing and buying.  Anything less is just traditional e-commerce in sheeps’ social clothing.” – Joelle Musante – Payvment

An example is the recently created Coca-cola Store Facebook page. This page allows potential customers to gain information on the brand, purchase the brand and leave comments on the well-known facebook ‘wall’. The page also publishes posts to trigger people to re-visit the page, keeping them engaged and up-to-date. This differs immensely from the original Coca Cola website where one could merely look up company information and purchase a bottle of coke or the company’s merchandise.

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Snapchat of the Coca-Cola Store Facebook page (2015)

Another example is the “Make the flavor – The Battle” – campaign initiated by Lays chips. In this campaign Lays portrays how to involve customers in the creation of a new chips flavour whilst building a large Facebook community. The fact that consumers like to be involved is clear as daylight: 675.000 flavour entries were submitted resulting in additional sales of 6 million bags of chips that made it to the finals (Klein Schiphorst 2012).

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Lays’ “Maak de Smaak”-campaign (2012)

Finally, social commerce increases the value of collected big data. Companies do not only know what people buy but also why they buy it and what their experiences are with the product. This increases the knowledge companies have about their customers immensely.

To summarize, social commerce stimulates social interaction among customers and allows co-creation on social media websites. This distinguishes it from traditional e-commerce. Allowing people to give their opinion on a brand stimulates them to return back to the page, which in return stimulates revenues. During this process, valuable big-data information is collected.

How do you define social commerce? Do you agree on my representation? What is your opinion on the integration of social media and e-commerce? Would you consider it alarming that social media and e-commerce integrate further?

I hope I’ve warmed you up for next weeks topic!


References

Klein Schiphorst, S. (2012). Superfans van Lay’s bepalen de (social media-)smaak. Available: http://www.marketingfacts.nl/berichten/superfans-van-lays-bepalen-de-social-media-smaak. Last accessed 4th Sep 2015.

Reekers, J. (2015). What Is Social Commerce? (And How To Take Advantage Of It). Available: https://www.handshake.com/blog/social-commerce-retail-trends/. Last accessed 4th Sep 2015.

Statista. (2015). Worldwide social commerce revenue from 2011 to 2015 (in billion U.S. dollars). Available: http://www.statista.com/statistics/251391/worldwide-social-commerce-revenue-forecast/. Last accessed 4th Sep 2015.

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