Dec 23 2010

Business models for communities

It may be situated, but learning happens all over the place.  One of the useful things that a community of practice does for us is to provide some useful boundaries for our attention.  We can focus on a set of relationships, conversations, resources, and trajectories that move will our learning forward.   Everything around and outside of a community matters a lot, but we can think of it as context for the community.  (Community of practice theory can help focus our work on behalf of a community, such as framing technology stewardship.)   One piece of context is especially important, however, and that’s the funding.  Funding can focus learning, for better or worse.  Lack of it can keep a community from taking off.  Having it withdrawn or end abruptly can be a lethal jolt.  The strings that go with funding can be a problem in various ways.  I’ve been thinking about these issues for the past five years or so, noticing that many communities have unconscious business models that situate them in their world.

The turbodudes in Wenger, McDermott and Snyder (2002), for example, had a business model that was just assumed  as a norm in the book: the organization (Shell) provided all the resources and captured most of the value that the community produced.   We have seen many cases where an organization funds a community of practice to make a big splash but when their attention shifts, support for the community is withdrawn.  One reason that KM4dev has thrived, in my opinion, is that it has a very open business model in which no one organization holds the community captive.  Sustained funding (e.g., a sustainable business model for the community) matters because communities take time to grow and they deliver their value incrementally over time.  It seems to me that community business models can shape communities and frame the learning that takes place by:

  • focusing on a topic and often giving it a particular slant,
  • constraining community membership or opening it up broadly,
  • constrain the kinds of problems considered or the way the community gets together.

A group of friends who are consultants in The Netherlands that I know through CPsquare have been meeting for many months, forming a community of practice focused on social media and learning.   Because I was passing through on the way to Effat University, they organized a session about business models.   They are thinking about the evolution of their own community and how business issues can impact the work they do with their individual clients (as organizations and as communities).  I talked about why I think business models matter to social media and community development work and held a world cafe, where we talked about that community’s business model in three rounds.  One of the points that Osterwalder makes is that it’s the conversation around a business model that really matters, so having a world cafe as a way of balancing diversity of perspective and the need for convergence is an effective strategy.  After the session in Wageningen, I worked on the slides I’d prepared and this post goes one step further.

Obviously the midwives in the Yucatan (one of the examples in Situated Learning, which I often go back to when thinking about communities) didn’t have much of a business model.  Learning was invisible because it was embedded in their daily work and social interactions.  There may have been economic exchanges in the community, but “the community’s resources” were probably not that separate from those of the surrounding society.

Today many communities need their own resources to get going, to function, and to flourish.  Here are some of the resources that communities can use:

  • Facilitation to help a community launch or get connected.
  • Meeting planning, organization, venues, and related resources.
  • Technology infrastructure to help a community find a digital habitat that works for its learning needs.
  • Curation of a community’s knowledge products or resources (organizing, maintaining, searching services such as a librarian might provide)
  • Travel funds for community meetings or work sessions

The costs are real although they vary over time and often show up at the beginning of a community’s life, before its value becomes apparent or actually exists.  Although a low-cost, low profile strategy can be best for launching a community in the first place, using “free” tools can just mask them rather than explicitly address the issues connected with a community’s business model.  There really isn’t a free lunch.  A free platform is part of someone else’s business model.

These issues are most important to consider when members come from across organizational, political or social boundaries.  If a community is launched so as to cross those boundaries or might cross them as it grows, thinking through a business model in advance can be an important element of community formation, once the fundamentals of learning energy and agenda are addressed.  Without some careful thought up front the business model can unintentionally constrain a community’s boundaries or activities later on.

We see these issues when communities grow larger and seek to become more like a professional association.  And we see them when larger professional associations seek to recapture some of the intimacy and connection that they imagine in a community of practice.  For example, some professional associations will be constrained by their business model in the sense that they come to depend on a particular source of funding like publishing a journal, holding an annual conference, or depending on a particular dues structure.  Other venues for being together may be desirable from a learning perspective, it can be difficult to change learning directions or activities because the business model somehow constrains attention and defines the world of possibilities.

Business models can be useful to us from an entirely different perspective because being clear about the business model of a community or its host organization can be useful for thinking how we as social artists or interveners in learning systems should focus our efforts (or measure our value).  Having an intuitive understanding of an organization’s business model can suggest where in an organization learning plays an important role and where increased learning is needed but where it may not be activated.  In addition, if an organization is in a transition process, a business model can provide a map that is more stable than its organization chart, so it can be a stable reference point for thinking through a knowledge strategy.

The Community Orientations model that we discussed in Digital Habitats focuses on the different styles of communities.  Originally, we began by looking at clusters of tools, but then realized that we had come up with a typology of community styles that have technology implications but are fundamentally about how a community chooses to “be together.”  I haven’t thought through all the connections, but a community orientation has technology implications on the one hand and because it suggests that different ways of being together (with cost implications), on the other, it may imply different ways in which a community can generate the revenues it needs to support itself as a community.

It’s important to consider that the business model for a community is a peculiar beast because communities have different boundary characteristics than businesses.  A business has distinct boundaries.  Communities have fuzzy boundaries and often large peripheries.  That has implications for thinking through the business model: what costs are borne by a community collectively and what costs are borne individually?

The community orientations can help think through the different styles that have both cost and revenue implications.   Managing the different records,  representations and intellectual assets that being together produces can in turn have cost implications.  A content orientation suggests that a community might offer some of its most important products for sale on the ‘Net.  Different community projects might have funding from different sources.  Meetings might generate or consume a community’s resources.  There is no one right model, but it is important to think through what the learning implications might be for any given model.

Jost Robben has collected some resources about business models here and so have I.  There are many more resources tagged on delicious, whose business model is now in question.

2 responses so far

2 Responses to “Business models for communities”

  1. smithjd8 says:

    Talking with Diego Leal this afternoon I realize that the "offer" in a business model for a community is where change has to happen for the various constituencies in a community's "customer segments". So a business model for a community is different in that regard from a business model for an organization, where the offer is supposed to be more stable.

  2. Great article as always Alyssa! We are seeing the same trends as you describe in your article.