I've found it fascinating to look at business models that can break out of a traditional financial mold by turning cost centers into profit centers. I'm reminded of a business school classmate of mine who started a wood chip company who had a negative Cost of Goods Sold, because the wood he used was from commercial wooden pallets, and companies actually paid them to take the pallets away and "dispose" of them.
There are a growing number of companies and business models that are embracing social networks and using them to turn the traditional R&D cost center on its head. The users become the development team!
Here are a few quick examples.
Second Life : I recently talked with Philip Rosedale, the CEO of Linden Labs, and he mentioned they have the equivalent of 2700 full-time developers generating content for the game. This is a MMORPG that is unique in that all of its content is created by the players of the game. The beauty is that the development effort is coming from people who are actually paying money to the company. In a time where developing a new MMORPG costs between $20-$40M, this is a very smart approach.
Digg.com: This is a news aggregator that is becoming more and more popular. Rather than have an editor or algorithm determine what is a "top story", they let the reader community submit and review stories.
wikipedia.org. This one is a bit more obvious. Content is created and controlled by its community which is essentially anyone and everyone. The result is a fantastic comprehensive resource. I haven't seen any World Book Encyclopedia salesmen come 'round in the last few years, have you?
The trick is always seeding the community to make sure things get going, but I like thinking along this mindset of distributing the development effort in a creative, cost-effective way.
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