Open Source economics and competition – an interview with Sam Tuke

“Because cooperating via Open Source is simply the most efficient way to make progress and create value, I believe that ultimately most things will be produced in this way – it is just a question of time,” says Sam Tuke.

Sam Tuke is a serial Open Source entrepreneur and CEO of mailtech startup Lightmeter. He has advocated digital freedoms privately and professionally since founding his first business aged 17. He led technical, marketing, and political projects for the Free Software Foundation Europe, Collabora, The Document Foundation, ownCloud, and others. He was also a mentor throughout the Berlin Collabathon Sprint in November 2019, in partnership with the European School of Management and Technology’s Net Impact team.

We speak about Sam Tuke’s experience as an Open Source doer, coder and strategist as well as his connections with the Open Climate Collabathon, a new form of event based on a principle of radical collaboration and crowd-development that connects worldwide universities, startups, civic tech groups and youth to contribute to the advancement of Open Source technology for a collectively owned global climate accounting system.

This interview is part of an ongoing Collabathon Interview Series.

Sebastian Klemm: How do our children survive the 21st century?

Sam Tuke: To quote John Gilmore “by reducing the transactional costs of cooperation”. 

Sebastian Klemm: Backcasting: We are now in the year 2040 where we nurture intragenerationally just societies while respecting the planetary boundaries with our climate-neutral lifestyles. What happened: Which mindshifts and actions brought us here in your point of view?

Sam Tuke: An existential threat, followed by a window of popular soul searching and open-mindedness.

Sebastian Klemm: Since you have been engaged as Collabathon Coordinator at Yale Openlab: What particular qualities of the Open Climate Collabathon distinguish this project in your opinion?

Sam Tuke: The Yale brand as a uniting force. Diversity of supporters and participants.

Click to read the full article by Sam Tuke “Mentoring at the Yale Open Climate Hackathon”. Image from the 2019 Collabathon Node hosted by the Net Impact club of the ESMT business school.

Sebastian Klemm: Amidst these challenging times of COVID-19, subsequent economic recession, depression and the structural issues of delivering economics differently & bailout the planet:

What opportunities do you see for students, startups, social entrepreneurs and companies to engage in co-creative crowd-developments like the Open Climate Collabathon with regards to the work of the future & the future of work?

Sam Tuke: Finally a deadline to digitise – whoops it already passed! A re-evaluation of the value of analogue world – rebound from digitisation and remote working, rethinking physical distribution models, bringing the lonliness and mental health epidemic to a climax.

Sebastian Klemm: How can companies and startups benefit from sponsorship for the Open Climate Collabathon in your opinion?

Sam Tuke: Brand-building. Impact investing. Recruitment.

Sebastian Klemm: The Collabathon aims to crowd-develop an Open Climate platform, stating: “The challenge of climate change and its irreversible erosion of planetary resilience is perhaps the ultimate opportunity to mobilize our mental structures. As such, a global climate accounting system needs to have a strong foundation on open data and Open Source software. A shared platform and its constituent parts need to represent an ecosystem of digital public goods for the global commons.”

Why is it important to design the governance mechanism for this Open Climate Accounting System as a digital public good?

Sam Tuke: To avoid otherwise inevitable abuse or in other words to avoid concentration of power. See the “protector versus producer problem”, which relates to a concept from Thorstein Veblen’s Beginnings of Ownership“, introduced to me by an economist friend of mine, Oliver Beige.

The “protector versus producer problem” describes that disparity in effort required to fulfil the mutually dependent roles of a producer, where pay-off is occasional and follows long term effort, versus their protector, where pay-off is frequent and follows short term effort, inevitably results in unequal distribution of the combined fruit of their efforts, that is abuse of the producer by the protector.

The theory of this problem helps anticipate inevitable “abuse” of one party by another in certain configurations of cooperative / interdependent relationships. It is also overly generalising and simplistic.

My version of the problem is: two parties, mutually dependent upon each other for economic survival, providing different but complimentary goods. The producer’s required investment for production is long, the protector’s is short. If the protector stops protecting the producer, then immediate threats face both parties. If the producer stops producing then then the threat is long term – their goods take persistent effort over a long time. The disparity in investment cycles yields a power imbalance which leads the protector’s to unequally split the value of the total goods produced by the combined efforts of the protector and producer. Soldiers and farmers are a classic example. Gmail and their users are one I have been thinking about more recently.

Sebastian Klemm: In our preceding interview Tiberius Brastaviceanu, co-founder and active affiliate at Sensorica, who took the role of designing and organising the Collabathon’s digital environment and worked on its user experience, says: “The Open Climate platform requires an economic paradigm shift. We need to design a system that goes beyond capitalism and socialism, one in which the organisation of production is not only optimized to maximize profits, but sustainable wellbeing. Perhaps that is a system in which the notion of profit doesn’t even make sense anymore.”

What is your perspective? How can we think, apply and measure profit differently to foster sustainable wellbeing for people and planet globally?

Sam Tuke: Profit never made sense. It is a proxy concept.  Start off by capturing the real economic cost, including externalities, which price is supposed to capture anyway – make the concept do what it purports to do. Following that, adopting an extension like the Triple Bottom Line seems like a good next step.  Ultimately the measure which matters is that which governments use for taxation. Beyond that, organisations can and should measure their success however best captures their progress towards desired goals. Put differently: there will be no universal replacement for a profit concept, and that is fine.

Sebastian Klemm: In our preceding interview, Dr. Martin Wainstein, founder and lead researcher at the Yale University’s openlab. says: “Currently, intellectual and financial capital is still the primary means for corporate valuation, but more and more we will start realizing this falls short since new companies will showcase value growth and impact through collaboration, open source and a growing network effect from shared purpose. The challenge is to capture this and find creative ways to translate this into financial capital, albeit a more enlightned version of financial capital.”

How do Open Source ventures showcase value growth and impact through collaboration?

Sam Tuke: By using Open Source tools to build complex products fast, applying Open Source best practices to produce in efficient agile ways and ensure high quality through automated testing and delivery.

Open Source does well with ecosystem-based or enabled products. When you give away control over your product, protocols, distribution, and use-cases, then there is incredible potential for crowd-sourced innovation on the technical and application (use-of) levels.

Making value isn’t the problem. More measurement of that would be nice. You can only afford to showcase the value you are creating, if you are doing an adequate job of capturing some value, and that is the hard part.

Perhaps, the real challenge here lies not with Open Source businesses, but rather with the other businesses. Is it a bad thing if an Open Source company cannot erect long term barriers to prevent customers from switching or negotiating a lower price? Is free competition and innovation from all sides something we should be investing our energy in discouraging? Because these are the set-backs which Open Source models face – how to compete with closed products, which can lock in their customers more easily, leading to lower marketing and research costs,  larger profit margins and war chests, with which to undermine Open Source rivals, who by contrast invite competition, and safeguard customer choice and freedom.

Sebastian Klemm: Could you illustrate what the Open Source ethos is about and how it can help companies and startups to help create a fair future for all and therein thrive as an economic entity?

Sam Tuke: Fair future question: It is well established that patterns of human thinking are flawed and we are apt to harm ourselves with imperfect reasoning, which is why critical thinking is part of education curricula. When we recognise this deficiency in ourselves, or want to help reduce the suffering of our species, then we need to do the hard work of understanding and mitigating these faults. Working together speeds and betters this work, reaping tangible, lasting, and compounding rewards for everyone who seeks out such information, and has (Internet) access to it.

Humanity shares many of the same challenges, and working together to solve them is simply the smartest selfish strategy, and also the only ethical approach if we value the wellbeing of other humans. For me the only rational strategy is to cooperate with other humans to the maximum possible extent – especially in the pursuit of solving critical problems which affect health and safety. So “doing Open Source” feels like common decency – any other approach seems anti-social; like parking your car in the middle of a highway. However not everyone sees cooperation or Open Source this way, and that is fine. Fortunately, there are advantages to being a cooperator, and an early adopter of tools and practices which facilitate this, even when that is not the norm. And besides: acting “ethically”, by one’s own subjective definition, is a reward in itself.

One example of a better – fairer? – society as a result of speculative cooperation via Open Source licensing: The adoption of hashcash proof of work hashing system, which was designed to address the problem of email spam, being creatively appropriated into the original bitcoin whitepaper as the “bitcoin mining” system which is used for inflation control, and implemented in countless other blockchains since, to immeasurable public and private benefit.

Thriving economic entities question: Firstly, the world, and our understanding of technology innovation, is the way it is today thanks to Open Source. If you imagine having to write an Operating System from scratch before you could launch your Arabic Twitter clone startup for example, or pay for costly licenses for even just yourself for dozens of proprietary programming languages, protocols, and software libraries before you could even start work on a prototype, then you start to feel how much we all benefit from – and take for granted – having access to the state of the art software, in most cases for free, including the ability to research, re-engineer, and sell it. The Linux Foundation estimates that code under their care would have cost $5 bn to develop alone. My estimate would be even higher.

It is much easier to gain a million users when your company produces <5% of the code that consitutes your product, as is the case with most SaaS firms. This is a wonderful state of affairs which serves as a single illustration of the benefits of cooperation which Open Source enables. Imagine what popular music would look like if most sampled sounds were also Open Source? The creativity and experimentaiton which would be unlocked would be similarly seminal.

So Open Source has enabled a whole generation of startups to build on the shoulders of giants, and turn generic software components into value-making products which delight their customers. Parts of what are typically considered to be the ‘Open Source ethos’ have also become standard practice for software development workflows – Git is ubiquitous, and is increasingly the protocol through which websites, social networks, creative content like books and artwork, as well as business documents and artefacts, are stored and exchanged.

Taking this further however is difficult, and something I have worked on for years, through my own Open Source businesses, and talks and panels on ‘Open Source Economics‘ and growing Open Source business ecosystems.

Because cooperating via Open Source is simply the most efficient way to make progress and create value, I believe that ultimately most things will be produced in this way – it is just a question of time. The explosive growth of Open Source since I first made this maximalist prediction has been encouraging.

However capturing the value which Open Source produces remains very challenging, and models for doing so are not yet sufficiently sophisticated or successful to make it desirable for most people to run businesses which produce exclusively Open Source products and services.

My team at Lightmeter, my startup, is working to build the next Open Source startup unicorn – let’s talk in a few years.

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You can find our interview also here at the Open Climate Collabathon Website.

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