Open Architecture Economics

Open Architecture Economics

Let’s say you have an incredible idea. So incredible that you naturally become selfish of it, and wants to make money out of it alone.

Let’s say you have invented some new kind of communication gadget, a totally different way to communicate. Unless you are one hell of a player in the market, you will not likely to succeed, as you will need more money than you thought to make this product known.

Instead, you open your idea to the public, and let them all explore your idea. Let them test your idea, let them spend their money on your idea, so that you can learn from their mistakes.

Take for example, VoIP. Although Skype is the major player in this segment at this moment, many companies had tried to popularize the VoIP concept earlier, so that the idea itself would pick-up wind and take off.

So, in a sense, Skype profited from earlier VoIP manufacturers, because the early manufacturers had already spent millions in making this concept popular to the public, forming up a market.