Capitalism 2.0

October 7, 2005 § Leave a comment

Thoughts on the underlying principles of the Web
2.0 business model:
The design pattern for the Web 2.0 business model
(aka Capitalism 2.0) is based on authority rather than power:
  • Power comes from acquiring assets
  • Authority comes from giving power away

The way to extract value from assets is via creative self-giving rather than transactions:

1. Create community by socializing knowledge [give]
2. Create assets by internalizing understanding [learn]
3. Monetize assets by externalizing value [sell]  

This creates a virtuous cycle that grows the value network — so close the loop as quickly as possible!

So far, there appear to be four ways to monetize free knowledge :

a. Sales: get a piece of the transaction
b. Marketing: give a piece of the eyeballs
c. Support: ensure it doesn’t break
d. Rent: provide richer infrastructure


It will be interesting to see if this model can accurately predict (or at least characterize) the winners.

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