Our Data?? Less and less guarded in ye olde smoke-filled room… (Left, ejh)
In keeping with our focus on data infrastructure, we’re staying under the hood to consider the business models that define our work: how we sustain market presence and attract the funding to do that while working with Open Data.
Evolutions of Open Data
The topic is too big to take on as “social sector business models.” So let’s focus on Open Data. Why?
Open Data began as a moral imperative, driven by calls for transparency, accountability, and collaborative problem-solving. Now, it’s moving into business practice and promising big social returns.
But you can’t build a business model solely with “free” at the core, including one relying on the free flow of data. The internet bubble of 2000 showed everyone that the hard way. Therefore, social-impact businesses must find ways to create consistent value for funders and constituents: by earning profits that sustain the business or, in the nonprofit case, addressing social problems in a way that attracts a dependable stream of donor or government capital.
This month is dedicated to examining business models driven by Open Data, recognizing that we’re in a brand new age of information sharing.
Two Categories Set the Range
Business models that have social impact as an explicit goal range from the fully subsidized to those that seek to maximize returns. It’s the first model that most people are familiar with in the social sector: donors and/or governments give money. (Note: We’re talking about social-sector organizations, leaving government-driven initiatives aside, except for collaborations that involve the government as a funder to external organizations.)
That said, “we rely on donors and grants” isn’t really a business model. If we’re to understand the social sector and innovate at the speed of new problems, we’d do better to ask: what model do social-sector organizations use to attract that funding consistently? Is it development fund-raising, results-based rewards, venture-based payments?
At the other end of the range are those businesses that seek to maximize returns, a nascent phenomenon in the social sector. In fact, the businesses that are most widely cited for profitably using Open Data happen to be in the private sector. They have innovative models, but don’t have social impact as a goal – and a lot of them deal in real estate: Zillow, Trulia, Redfin, among others. They scrape, repackage, and analyze data, then earn revenues from advertising or fees.
But, while their progress is a worthwhile example for profitable open-data use, basic social questions stand out, even if they’re not often asked yet (i.e. “Who will profit most from Open Data?” and “Can Open Data …be a force for community-led democratisation?”).
Our task this month, through the voices of our guest contributors, is to explore what’s working now and what we should be doing to develop sustainable business models for Open Data. Additionally, and perhaps most importantly, we will discover the right questions to move forward. We will hear from entrepreneurs, nonprofit and business leaders, and technologists in our attempt to assess the landscape. There’s a big competitive force to consider in the background: Open Data will be used by somebody. We’ve got to create fundamental models and platforms to use it for good. We’re excited about the line-up of diverse contributors, each putting open data to work! in different and sustainable ways… World Bank Data Scientist, Tariq Khokar; TechSoup founder Daniel Ben-Horin; Appallicious founder and CEO, Yo Yoshida; BBB Wise Giving Alliance President and CEO H. Art Taylor; Junar CEO and co-founder Diego May, and more.