I’ve always maintained that people who “think opensource” work on useful things, solve problems, create value; they don’t focus on the business model at the outset but instead concentrate on the value they create.
In Peter Drucker’s words, “people make shoes, not money”. Make something that is worth while and people will pay you for it. Figure out what shoes you’re good at making and then make them well. You will make money as a result.
Knowing in advance how you’re going to make money from snake oil may sound like you have a business model; what you have is snake oil. And that’s the problem you need to concentrate on first, the fact that you’re not creating anything of value.
And sometimes the process of calculating and measuring benefits can come in the way. Many years ago, when I worked for Burroughs Corporation, I learnt this the hard way. This was the early 1980s, and software/services was just emerging as a business. Until then, all the margin was in hardware, so we ‘shifted tin”. We gave away the software and the services in order to sell the hardware. Then, as the cost of human capital rose, and investable capital became scarce, this equation began to shift. It became more and more important to understand the true cost of software projects before starting them.
So we instituted something called the Phase Review Process, borrowed from the US Navy if I remember correctly, and implemented it within the firm. Every project had to undergo a phase review at inception and then at each phase.
Which was all fine and dandy. Unless you were just about to start a project that would cost a total of £25,000 inclusive of everything. Which was less than the lowest possible total cost of the phase review process. But I was lucky, my management understood this issue, and it was mandated that projects had to exceed £100,000 in total planned cost before they needed to be put through the Phase Review Process.
Why am I writing all this? Well, some years ago I remember reading about something called the polypill; the newspaper articles referred to this paper which had been published in the BMJ in 2003.
The principle was simple. Six tried and tested medications to be combined into one pill that could cut potentially reduce cardiovascular disease by 80%.
When I first read the articles, I was intrigued. But I didn’t know much about the drugs involved. I knew nothing about statins, other than some vague notion that they were wonder drugs that combated high cholesterol with some wonder side effects. I knew even less about ACE inhibitors and beta-blockers, though I may have come across the beta-blockers as something to do with performance enhancement. Folic acid was something pregnant women took; and diuretics meant you had plumbing problems.
Aspirin I knew about, although I had no idea it could be obtained in cardio doses.
But that was in 2003. Since then, as many of you will know, I have had reason to get to know this particular cocktail of pharmacology quite intimately. Nevertheless, I’d forgotten all about the polypill.
Until a few weeks ago, when I read this on the BBC web site. The polypill could become reality in five years’ time, it said. And then I remembered what i’d read all those years ago, when they said … that the polypill could become reality in five years’ time.
And that made me think. Slowly. Very slowly. And my thoughts went a little like this:
One, cardiovascular disease is the single biggest cause of death facing humans.
Two, people had come up with a cheap and effective way of reducing the risk of cardiovascular disease by 80%.
Three, this had happened six or seven years ago.
Four, with a little bit of luck and a following wind, we may see something happen in five years.
Of course I’m oversimplifying, but I don’t believe I’m exaggerating. A strange world we live in.
I’m not by nature a conspiracy theorist. I believe man landed on the moon nearly forty years ago. I don’t believe in little green men or UFOs. Neither do I believe that Big Oil makes sure that substitutes for gasoline never surface.
But here is what I believe. I believe there is some evidence that the polypill does not exist today because it’s hard to make money from it.
Why? Because the ingredients in the polypill are all out of patent, all “generic”. Because the way drugs are trialled, it’s prohibitively expensive to bring a new drug to market unless you have some monopoly rents to come, patents to exploit and exhaust.
So it is possible that the cost of trialling a cocktail of generic drugs exceeds the potential income from selling the cocktail. And so no polypill.
No mention of the number of lives potentially saved and minor stuff like that.
Now I take statins, beta blockers, ACE inhibitors, diuretics, blood thinners and anti coagulants daily. You could say I have an amateur interest in all this. A passion, even, given that the medication has worked wonders on my heart and on my life expectancy.
This is not meant to be a diatribe against doctors or the medical profession or even the pharmaceutical industry: they have all treated me really well, and I owe them a debt of gratitude.
What I am trying to do is to point out that sometimes we hold up innovation by concentrating on the wrong thing at the start. And sometimes it’s because of the anchors and frames of the way we do things.
So I was thinking. Opensource people solve generic problems. Is there a way to opensource the trials of generic drugs, to change the mechanics and dynamics of drug trials for generics? Is there a way to adopt the opensource principle of “privatising losses and socialising gains”, the exact opposite of what happened during the credit crunch?
I wonder.
Views?
