David Smith, one of the first people to comment on my blog, remains on my everyday read list. Recently I noticed he linked to something I’d written on risk management, and I moved via his blog to Bruno Guissani ‘s commentary on Aula2006, including his coverage of Clay Shirky‘s session.
There are some real gems in the two posts I’ve referenced above, I urge you to read them. One that struck a particular chord for me was the following, from Bruno’s piece:
Shirky’s argument goes like this: when you explore really new ideas, it’s pretty much impossible to tell in advances the successes from the failures. The business world today is geared towards “optimizing” the innovation processes in order to reduce the likelihood of failure. That’s a significant disadvantage when compared with the open-source ecosystem, which “doesn’t have to care” and “can try out everything” because “the cost of failure is carried by the individuals at the edges of the network, while the value of the successes magnifies and adds value to the whole network”. “Ecosystems such as open-source get failure for free, and that produces some inevitable unexpected big successes – the Linux operating system – that nobody could have predicted but end up changing the world”
The cost of failure is carried by the individuals at the edges of the network, while the value of the successes magnifies and value to the whole network. Sometime ago I commented that opensource people tend to solve problems first and foremost rather than develop complex business models. I think that what Clay says is more articulate and far more elegant.
If you disaggregate the cost of failure it will drop. If you reduce the cost of failure then you increase the capacity to innovate. If the innovation is carried out by individuals at the edge then those costs drop as well. As all these costs drop there is a natural speeding-up. A lovely virtuous circle with the right feedback loops.
My thanks to David and Bruno and Clay, they’ve given me a lot of good food for thought.