To innovate, a company needs to value ideas, abandon business lines and allocate resources accordingly1. Let’s start by comparing the process of innovation in a “normal” company and a fully open source company.

A “normal” company will have to analyse its business lines, compare them to competition, compare them to other business lines, evaluate the results in line with the overall strategy and (finally) take a decision on the future of each business line2. For an underperforming business line, even after this round of analysis, more time is required to find an exit plan, reallocate resources and finally close the business line. A lot of time taken while the business line is still underperforming.

In the open source world, a “business line”3’s resources will be made of volunteers devoting their time to something they like and believe in. These volunteers will also be primary customers. The abandonment process has a lot to be compared to Darwin’s evolution theory. All the best resources will automatically leave underperforming (from a customer point of view, interpret as “uncool”) business lines in profit for successful business lines (still from a customer point of view, interpret as “cool”). The process of abandonment is a lot more organic: a successful business line will wither and die and be replaced that a more successful one very rapidly. The analysis process is also a lot more organic and much closer to the real evaluation: what the customer thinks!! The time gap between the customer evaluation of a product/service and the company’s reaction is quasi-nonexistent.

1. Source: Peter Drucker [↩]
2. The economic analysis and market positioning will be assumed to reflect the customer’s point of view, while this is a good intention, it is not (always) true. For instance, if you look in the market of portable entertainment, I am sure that Sony was pretty comfortable with its Sony Discman/Walkman’s market share compared to the other equivalent… that is until the iPod came long… If Sony really had been number one in portable entertainment, why did it take such a beating? [↩]

interpret as a piece of software or a feature [↩]