(2005-08-05) Graham Biz Learn From Open Source

Paul Graham on what business (BigCo, Professional) can learn from Open Source (SmallCo, Amateur). The third big lesson we can learn from open source and blogging is that ideas can bubble up from the bottom, instead of flowing down from the top. Open Source and blogging (WebLog) both work Bottom-Up: people make what they want, and the the best stuff prevails. Does this sound familiar? It's the principle of a Market Economy. Ironically, though open source and blogs are done for free, those worlds resemble market economies, while most companies, for all their talk about the value of free markets, are run internally like commmunist states (Planned Economy).

Also: I think the big obstacle preventing us from seeing the future of business is the assumption that people working for you have to be employees... I see the disadvantages of the employer-employee relationship because I've been on both sides of a better one: the investor-founder relationship. I wouldn't claim it's painless. When I was running a Start Up, the thought of our investors used to keep me up at night. And now that I'm an investor, the thought of our startups keeps me up at night. All the pain of whatever problem you're trying to solve is still there. But the pain hurts less when it isn't mixed with resentment... Why not let people spend 100% of their time on their own projects, and instead of trying to approximate the value of what they create, give them the actual market value? Impossible? That is in fact what Venture Capitalist-s do... Hacker-s tend to think business is for MBA-s. But Business Sdministration is not what you're doing in a startup. What you're doing is Business Creation. And the first phase of that is mostly Product Creation (Product Development)-- that is, hacking. That's the hard part. It's a lot harder to create something people love than to take something people love and figure out how to make money from it.

Sept27 update: Kathy Sierra focuses on the costs of Professionalism. By the time we ran things through the deadly professionalism filters, the life, Passion, joy, and in this case--brain-friendliness--had been sucked out.