I’ve been wanting to blog that phrase since reading the Communities as the new IPR? thread on the Free Software Business list. That thread lost coherence and died quickly but I think the most important idea is hinted at by Susan Wu:
There are two elements of discussion here – a singular community, which is a unique entity; and the community constructs (procedure, policy, infrastructure, governance), which are more readily replicated.
Not said but obvious: a singular community is not easily copied.
Now Tim Lee writes about GooTube (emphasis added):
YouTube is an innovative company that secured several millions of dollars in venture capital and used it to create a billion-dollar company in less than a year. Yet as far as I know, strong IP rights have not been an important part of YouTube’s strategy. They don’t appear to have received any patents, and their software interface has been widely copied. Indeed, Google has been in the video-download business longer than YouTube, and their engineers could easily have replicated any YouTube functionality they felt was superior to Google’s own product.
Like all businesses, most of the value in technology startups lies in strong relationships among people, not from technology, as such. Technological change renders new technologies obsolete very quickly. But a brilliant team of engineers, visionary management, and a loyal base of users are assets that will pay dividends for years to come. That’s why Google was willing to pay a billion bucks for YouTube.
Loyal base of users does not do justice to the YouTube community. I was not aware of YouTube’s social features nor how critical they are until I read the NYT story on electric guitar performances of Pachelbel’s Canon being posted to YouTube (I commented on the story at the Creative Commons weblog). Some of these videos have been rated by tens of thousands of users and commented on by thousands. “Video responses” are a means for YouTube users to have a conversation solely through posting videos.
Google Video could have duplicated these social features trivially. I’m surprised but not stunned that Google thinks the YouTube community is worth in excess of $1.65 billion.
On a much smaller scale the acquisition of Wikitravel and World66 earlier this year is an example of the value of hard to duplicate communities. The entire contents of these sites could be legally duplicated for commercial use, yet Internet Brands paid (unfortunately an undisclosed amount) to acquire them, presumably because copies on new sites with zero community would be worthless.
There’s lots more to say about community as a business strategy for less obvious cases than websites, but I don’t have the ability, time, and links to say it right now. The FSB thread above hints at this in the context of software development communities.
And of course community participants may want to consider what allowances they require from a community owner, e.g., open licenses, data, and formats so that at a minimum a participant can retrieve and republish elsewhere her contributions if the owner does a bad job.