Subject: re[2]: Successful FSBs
From: Rich Persaud <persaud@b8d.net>
Date: Mon, 30 Sep 2002 13:16:07 -0700

Tim wrote:
|  It's the exclusionary, boundary-driven definitions that bother me.  We 
need
|  a definition driven by a gravitational core, recognizing that the field 
gets
|  attenuated the farther someone is from that core, but owning its 
influence
|  all the way out to the stars.

Is there a parallel with Starbucks' relationship with independent coffee 
retailers?

  http://www.strategy-business.com/press/article/?&art=410788 (reg. req.)
  http://online.wsj.com/article_email/0,,SB103281584070907553,00.html

This is either good PR or a dynamic worth investigating:

--
"... Starbucks increases the overall market, attracting new customers to 
the product who then patronize the independent provider next door. "When a 
Starbucks opens, it __educates the market__, expanding it for everyone," 
says Bruce Milletto, president of Bellissimo Coffee InfoGroup Inc., a 
Eugene, Ore., company that provides consulting services to independent 
coffeehouses."
--

Complementary businesses grow markets, that is not new.  The high-density 
approach to brand building is new (e.g. 6 stores within walking distance of 
each other, each with slightly different aesthetics, even in locations with 
long-established independents).

A traditional rationale for proprietary software pricing is the need to 
fund innovation, i.e. R&D.  From that perspective, customer selection of a 
vendor equates to a vote of confidence in the vendor's R&D strategy.  
Secondarily, there is recognition of the customer's increased voice during 
triage of future requirements.

What is the non-zero-sum value proxy that is traded in the FSB ecosystem, 
and what is the perceived return? It's not innovation, which occurs with 
religious spontaneity.   It may, boringly enough, be survival.   A customer 
decision to invest (funds, attention, packaging, performing) in a niche of 
the FSB ecosystem is a vote for risk reduction in that niche.

Independent of the ethical and moral subtleties of relative freedom, there 
is one benefit that accrues to all participants in any ecosystem.  In an 
FSB ecosystem, that benefit is particularly valuable, because of the 
extreme pace of innovation in FSB ecosystems.   

That benefit is the "Existence Proof", otherwise known as the great 
Taxonomy Debate of librarians and codeline managers.  The self-recursion of 
taxonomies (incl. software) is broken by the existence of a customer who 
applies the content/software/media object in the context of a finite 
geography and finite "offline" market.

It is the application of infinite-innovation FSB products to finite, 
traditional markets that returns value to the FSB ecosystem.   When 
everyone is mobile, stationary objects have economic value.  When all 
products are evolving at a frantic pace, stable application requirements 
have economic value.   When process transparency accelerates process 
innovation, economic value shifts to the latency of contracts.

Innovation, the strength of FSBs, increases what might be called marketing 
costs ... in all stages of the pipeline between R&D and shipped product.  
What happens when the half-life of an FSB product becomes shorter than the 
most efficient execution of the marketing pipeline?  You have to cut 
"identity costs".   Branding (visual promise to execute consistent process) 
reduces identity costs.  So does bundling and consolidation.

Transparency of source code permits FSB distribution channel participants 
to wander through all syntactic levels (mailing lists, CVS, patchsets, 
licenses, gossip) of FSB product delivery.  But without the cultural and 
semantic context required at each level, the social mobility afforded by 
FSBs cannot be exercised by most ecosystem participants.  

Nevertheless, like other civil rights, FSB social mobility can be valued by 
all participants, using a visible subset of individuals as proxies.    The 
regular soap operas in various FSB cores provide reassurance to those in 
FSB retail that freedom is alive and arguing.   Making core debates visible 
at retail is critical for succession throughout the ecosystem.

The longer the mean distance between FSB cores and FSB retail, the better.  
From a business perspective, may they grow ever further apart.   That 
creates an entire topology for value mediation, advocacy, arguing and yes, 
mobility.  As long as the FSF (or other watchdog of boundary conditions) 
can provide existence proofs for transparency and mobility along _an_ 
entire FSB value chain, we need not restrict the length or opacity of _all_ 
FSB value chains.

Rich