None of Your Business Model

    by Christopher Csikszentmihályi
    August 10, 2008

    “What’s the business model?” It’s a question I hear again and again at meetings and events. The existing model for newspapers is quickly unraveling, so we need a ‘new new thing’ to serve some of the vital functions that newspapers used to.

    Whatever that new new thing may be, it is supposed to have a business model: a business model is what separates the well-meaning amateur from the sustainable enterprise. It is vital for securing loans or venture capital. You can’t be serious about sustaining a venture unless you have a plan for a business that will sustain that venture.

    Except that maybe you can. I believe that in many cases, the urge to find a business model is orthogonal to one of the most important social changes today, one that is reformulating labor, technology, and product in unexpected ways.


    Let’s take a step back and explore how we usually imagine a business. Conventional wisdom dictates that, in order to create a product, there needs to be a profitable business (a firm), or similarly a well-funded non-profit with paid staff. The firm is a mixture of capital, labor, knowledge, and technology. The firm does the work of creating a product, in the way the Washington Post Company puts out the Washington Post newspaper. (Or, at least, still put it out when this post went online.) The firm’s profits provide the capital needed to sustain the enterprise, and the actual work on the product is done within the firm. All this is so obvious that it hardly seems worth repeating, but therein lies the problem: the business model that assumes a firm is so ubiquitous that many people unknowingly conflate the firm with what it produces. They think that a product needs a firm, and even that each tends to scale with the other.

    While the model in which a firm produces a product is common and viable, some of the biggest product success stories in recent history don’t actually come from businesses. That’s not to say that no one is making money from these products; there is plenty of green in these fields. But there isn’t a one-to-one mapping between business (in the sense of a firm) and product. These new products are generated under the alternate organization of knowledge, labor, and capital called the free software model.

    Free software has already had a profound impact on the world of IT, and its impact is being felt in other domains as well. Many people have heard of free software, Linux, or “open source,” or may have downloaded the Firefox web browser. But few understand how free software is made. I believe that the way free software projects are created and maintained could be a great model for the future of news.


    Let’s look at one tried and tested free software project: the Apache HTTP server. HTTP servers are the bit of software that lives on hardware servers, taking requests for web pages and then dishing them out. Since 1996 Apache has dominated the intertubes, and currently has 50% of the global market. It is a complicated, comprehensive piece of software, the necessarily fast and secure engine that serves most major web sites. Apache HTTP is not made by a business, nor is it even made by a non-profit; rather, it’s made according to a free software model. True, it’s technically hosted by the Apache Foundation, a 501c(3). But the Foundation was formed in 1999 — three years after the product was launched, and after the server had about 60% of global share. The non-profit Apache Foundation was created to help manage the project, but little of the code is generated by employees of the Foundation. Moreover, Apache Foundation now hosts dozens of different projects other than the HTTP server, some that are nearly as successful.

    So while the Apache Foundation clearly has a plan — perhaps even a business model — the product itself is co-produced by literally hundreds of other businesses and individuals. Apache HTTP and other massive free software projects are the fruit of the labor of a group of committed, er, “committers” — people who are trusted to create and modify the project’s source code and upload it to the community code repository. Their changes may well be integrated into to the next release of the software. A list of current Apache Foundation committers — roughly 2000 — can be found here, and the “trunk” (main version) of the server they’re building together is here.

    Why do these people work on a software project that isn’t cutting them a paycheck? They might be working in a big company that uses Apache HTTP, and are paid by their company to tailor it or add functionality. Some have their own business or consultancy that is competitive precisely because they know Apache inside and out — and they continue to work on Apache in their down time. Some are individuals who work all day programming for a company that takes their work and gives them a paycheck, but keeps the rights to their work and “manages” their contributions. These programmers then go home and program for a free software project, an egalitarian enterprise that they see as a contribution to society. There is no one personality type that describes a free software project committer; indeed, there’s no one model of a free software project.

    Different free software (and free culture) projects have quite different labor, funding, and management structures. Wikipedia is largely maintained by non-programmers. Ubuntu (an alternative to Windows or OS X, currently used by millions of people) has a multimillionaire founder and front man, is backed by a private company, and borrows from an older product called Debian for much of its technical foundation. The Python Foundation coordinates Python (my favorite programming language), and its sponsor page has a list of corporate logos that would overwhelm a racing car. None of the products of these collaborative initiatives runs off of a single traditional business, though many people are making money from and through these products.

    The projects I’ve mentioned so far are large, with hundreds or thousands of contributors. But the free software model isn’t just for big projects. By far, the majority of free software projects are not massive; they solve a smaller problem, and have one, two, or three contributors. They may see little use, and need little improvement. But some of these projects are huge, and have scaled incredibly: Wikipedia’s english edition, love it or hate it, has 2.5 million articles, and has incorporated edits from 220 individuals in the minute that I wrote this sentence. (The Wikinews project has, in contrast, been something of a dud. Indeed, it fails in the way that much contemporary American journalism fails, by trying to create a neutral point of view. But while the Wiki* projects share some similarities to free software projects, they are also different, and I don’t think we can generalize much from Wikinews’ shortcomings.)

    These free software projects are based not in business units but in communities. Granted, in virtual, distributed communities rather than geographic ones, but communities nonetheless. None of these projects could have existed before the Internet, but projects like Debian also have quasi-Masonic systems of induction, including personal meetings and cryptographic signatures for all the trusted committers. Anyone who can contribute working code can join, and if they aren’t too sociopathic they can rise within the enterprise. The more people involved in a project, the more “eyeballs on the code,” meaning the less chance of a security hole, stale code, or inefficiency. This leads to great product: after all, Microsoft and Sun didn’t cede the leading market position in web servers for over a decade because they decided they didn’t want it. Apache was just plain better.

    It’s understandable that so many entrepreneurs default to a standard business model rather than the free software model — even when they are creating web sites that will be served off of Apache HTTP. In many ways, the impact of free software is misunderstood or underestimated, in no small part because corporations like Microsoft have actively tried to block or obscure free software’s success. But part of our unfamiliarity with free software models is because they are relatively new and quickly evolving, and their impact has mostly been felt in the guts of computers and networks. Every web user has “experienced” Apache HTTP much more than they have YouTube or Facebook — easily thousands of times more — but most of them didn’t know it because Apache is doing its work transparently. Wikipedia and Ubuntu are, nonetheless, recent proof that it’s possible to create goods and services that aren’t just for hypergeeks, and even business schools are starting to take notice of how these remarkable products were made and are sustained.

    At the Center for Future Civic Media we’re not only looking at a journalism model, or even a firm-oriented business model. Indeed, many of our projects borrow the labor/knowledge/capital models of free software, activism, or other community-based enterprises. In the nearly two hundred years since LLCs and corporations started, they have produced most of the products we touch or use every day. But there’s a new alternative to that model, and it’s one that might lead to stronger, healthier, more informed communities.

    Tagged: business model newspapers non-profit open source

    8 responses to “None of Your Business Model”

    1. Chris says:

      I love online/digital journalism and all that new media, but I don’t think your reasoning makes a whole lot of sense for journalism – get rid of all business models? How are people supposed to get any money to pay the bills, or is everyone going to do journalism in their offtime? Should we no longer have professional journalists?

      I think this is where your argument falls apart. Obviously, with the web, free content is fairly important – but you have to find ways to support that content, whether it be advertising, merchandise, donations or whatever. It seems your argument defines a business model as anything that makes money – so without any kinds of revenue streams, how do we support anyone to create the journalism?

    2. I had a lovely long comment composed but the ghosts in the machine seem to have swallowed it.

      A lot of Free Software comes from programmers who need it to do their work. From people who need a better web server and can build a better web server and so they do. It is still an important economic model, especially as a model for collaboration and shared ownership of a project and a design. A fundamental aspect of free software development is that collaborative ownership that gives everyone the capacity to say “we can work on this together and we’re secure in the knowledge that you can’t take it away from me, I can’t take it away from you.”

      I think that the same model can work in reporting when it comes to crowd sourcing projects, to putting many eyes on a single task and extracting some knowledge from it. The model can work in encyclopedic projects, where a news organization is trying to aggregate information that is readily verifiable.

      The idea that it could work to bring programmers in to support a news project isn’t too outlandish: on some level programmers (and others) need local news, need a spotlight shown on policy makers, as much as we need better software.

      The problem is that we also need journalists. We need more, better journalists than we have. And journalists, unless we’re going to radically rearrange our society, need to pay the dentist in cash money. Good reporting doesn’t have the same kind of resale value that a web server does.

      All of which is why, when someone tells me about a brilliant new news venture, one of my first questions is “huh. what is your business model?” Because too many times the business model is “oh the news will write itself.” Good journalism doesn’t write itself and it definitely doesn’t edit itself.

      This has come up before here by the way, shoddy inexperienced journalism and its discontents.

      So I’m curious: how do you propose to apply free software development lessons to journalism? What have you learned at the Center?

    3. I have a lot of admiration for the free software/open source movements. I think this type of model has a place in the emerging ecosystem of new news organizations.

      But even the groups you mention have some organization, and organizing principal behind them. Take Firefox, for example. It’s managed by the Mozilla Foundation, which funded in large part by Google. And the original code and concept, originated in Netscape and was championed by a few leaders who managed to spin it out in the company’s later years. Today, while thousands of people contribute, there are still some well-paid professionals who run Mozilla, oversee its governance, and handle the mundane tasks of making decisions about launches and promotions.

      That said, there are also a number of examples that currently exist that track with this idea of “free software” model. I see this in a site like Daily Kos, which attracts legions of contributors who post for free, and help invistigate and evaluate claims.

      Other examples: Bloggers who helped determine that Verizon was restricting somes types of Internet traffic. Or the anonymous folks who dug up online documents indicating that some of China’s gymnasts were underage. Or the folks who converge on Twitter to discuss and report various events.

      The problem is that in many cases, these efforts are also spontaneous, driven by a particular passion, or limited in scope. It doesn’t scale to cover all the areas being abandoned by the ebb of newspapers.

      So I think there is a need for a model. There needs to be some organizing prinicipal that continues to identify gaps and recognizes and values the participation of people with various degress of experience and expertise.

      I’ve also begun to think that the term “business model” is too limiting. Because of course many of these new models are non-profit, open source, or community driven. I think perhaps the better word is “sustainability.”

    4. Chris (O’Brian & Csikszentmihályi) — I’ve been struggling with this. I still am. I’ve been following the citizen journalists in Tibet and juggling a handful of questions, including:

      Is it fair to call a group of Students for a Free Tibet activist “journalists”? Even “citizen journalists,” if they went to Beijing for the primary purpose of documenting protests they had a hand in planning?

      Would anyone be covering the protests over Tibet if Brian Conley, Jeffrey Rae, Jeff Goldin, Michael Liss, Tom Grant and James Powderly weren’t there?

      So, on the one hand, we need documentarians and activists to tell stories that the mainstream media isn’t telling. But we ought, also, not rely on volunteers to risk prison terms to do the kind of basic reporting that is so essential to the informed public who are, in turn, essential to a functioning democracy.

      I really think that we need a model for the long term economic sustainability of news outlets that we rely on. Call it a business model or a sustainability model, but don’t tell me that we’ll just count on some die-hards to take their chances with a foreign legal system and hope that their readers kick in some support if they turn out to need a lawyer.

      So … I’d still like to hear more about the economics of a free software model applied sustainably to journalism and reporting.

    5. Amanda:

      Let me first just say that I think it’s absolutely critical that we find a way to fund and sustain professional journalists who maintain a level of expertise or knowledge or historic knowledge. In my mind, the question of sustainability or a business model is THE question of the moment.

      I’m not sure what the answer to that is, and I’m not sure anyone does at the moment. I know it’s ultimately what everyone wants to discuss. Thus, the angst that many journalists such as myself feel about our futures.

      I don’t think the free software model is the solution to that part of the problem. However, I do think it presents an opportunity to expand the base of people involved in gathering news and information that can focus on an issue or a project. I don’t see this becoming the core of how journalism is sustained, but rather an exciting new piece to an expanding puzzle.

      Also, while I know this may push your buttons, I’d recommend that you don’t get too hung up on the journalist label when it comes to these new areas. I think the key in the case of the Tibet person is transparency: Do we know who produced it, why they were there? If so, I think we can judge the content accordingly.

      One other thought: Just yesterday I was discussing a project with some folks in Silicon Valley and we were talking about recruiting volunteers to gather news and information about local education. I noted that this already was happening to a large degree via Yahoo Groups. The school my son will attend in Oakland has a vibrant listserv primarily run by a handful of active parent volunteers who attend every school board meeting, every school function and send out detailed summaries. Are they journalists? I’m not sure what I’d label them, but I’m also not sure that as a member of the list that the label matters to me.

    6. I’m trying to build something along the lines of what you suggest to support investigative journalism. Sadly, however, in order to get it built I’m having to explore business models alongside the open source aspect in order to get it done sooner rather than later.

    7. Kelly Schlicht says:

      To Chris: I just posted a queue move I call “Gnip Gnop” that pertains to undefined other for
      Senator Al Franken – Health Care
      5 year study: http://mentalhealth.samhsa.gov/publications/allpubs/SMA03-3830/content04.asp
      COBRA and http://www.medicare.gov/medigap/default.asp
      problem base 65 and older option without regard to cancer rates for the Millennials who is quoting $30K per person for National debt with a 1/2 likelihood of cancer diagnosis. Majority unfamiliar QUINE type terms: Pikuach Nefesh, Nephesh, Chelev, Cheilev and all the kvetching. USDA uses: picky-unish … which to me refers to unikont, bikont, etc. Good Day.

    8. Reem says:

      Two key elements to the evolution of news:
      – Micropayments, so users can pay for they news they read/view
      – Editors, to select what’s valuable from the reams of data generated, whether by professionals or not

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