Geoff Moore talk on Open Source at OSBC
Commoditization takes all the earnings of the industry down. Managing core and context is center stage. Core is what you choose to be different about. If you are Dominos, the Pizza is context, 30 minutes is core. If you are Chuck E Cheese the Pizza is context and the animals are core. Tiger Woods competitive capabilities are core, the rest is context — focus on the game! What ever you have that is core, however, becomes context over time.
We are horrible at managing less differentiated goods. Scarce resources get tied up in context. Context build-up: what once made them great now leads to weakened competitive performance and lower returns on invested capital. Need more healthy processes to extract resources from the context to the core.
Open source’s most important role is to commoditi[ze] context [and] processes so people can extract them and re-purpose them for the core.
“What ever you have that is core, however, becomes context over time. ” The really hard part for a lot of interesting ideas at the moment, is that many of them are absorbed into the open source “context” before they have a chance to be a profitable “core” aspect of a business, with a differentiated lifetime of only weeks or days before needing a new innovation to add to their “core” proposition.
Look at what Redfin has been working on (real estate listings with maps and photos), vs something like Craigslist on Google Maps. This is either a great opportunity for folks like Redfin, or a major headache.