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Social Production as a Market Strategy – What We Can Learn From U2

Can social production build stronger market economies? Will we create compelling financial incentives and rewards with more social cooperation?

“Social production” was cognitively described by Yochai Benkler in the Wealth of Networks. We often think of market and social production as mutually exclusive. We mentally pit financial outcomes against egalitarian “free” outcomes. A good example is the open source versus traditional software licensing debates currently playing out in the Gov 2.0 movement in Washington D.C.

Advocates of open source development equate traditional software development as slow, expensive and non-inclusive, while traditional software developers often give short shrift to the transformative quality of federated software development.

Traditional software developers argue for rules, barriers, and structure often under the realm of “security” and “privacy” while open source developers often drive to undefined outcomes in the hope of achieving sustainable change. Obviously, there are no ultimate “rights” and “wrongs’. Properly applied, each can enable the other to work better. Social production can enable better market outcomes—with tangible financial incentives and rewards.

U2’s social production model drives business results.

Recently my wife Amy and I attended one of U2’s concerts in Tampa, Florida on the 360 Tour (Great concert! See it if you can!). As we approached the concert, we had a keen sense that something unusual was happening. Everything about the concert is BIG. Big stadium venues, the biggest concert stage ever built (The Claw), and maybe most importantly, the level of audience involvement—online and offline. Tens of thousands of people of all ages are paying many millions of dollars (240M through the NJ venue), to see a performance of what are largely time worn songs. Why?

The answer was apparent the next day as a You Tube search revealed the hundreds of concert videos captured from almost every perspective of Raymond James stadium. Videos from virtually all other concert venues—London, Barcelona, New York and others are also in widespread Web circulation.

U2 is breaking ground. It is using social production of the many to drive a market outcome that may well make the 360 Tour the most financially successful of all time. Social production achieved by enabling participation drives hundreds of thousands of concert-goers to pay for the experience.

But haven’t we always leveraged social production in market?

I would argue that traditional economic and business models are largely built on principles of social production. Companies that “win” are typically those that are able to get the most out of their customers, partners, and employees, not the bare minimum. The same is true with government agencies. They excel in capturing the intangibles. They excel in listening to citizens.

When a customer or citizen gives you something of value to improve a product or experience, or an employee or partner provides advice that leads to a better process and continuous business improvement—they are motivated beyond the paycheck. There is an intangible quality to the contribution that strictly speaking cannot be captured by the market, but that has direct market impact.

Transformation that matters

What is happening in every organization and every part of every organization in the World is a shift to value creation through social production—the contribution of intangibles outside of traditional market processes.

Social production is not necessarily an alternative to market production. The two can co-exist and flourish together. Companies and governments that use social production to supplement market production can achieve the best of all worlds. They will achieve business results while their constituencies experience better product and service delivery based on participation.

Whether the subject is software development or U2 concert attendance, production by all can drive financial and personal rewards for many. It can make governments stronger and more participatory. In fact, market rewards, financial incentives and traditional forms of citizen engagement are alive and well.

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David Dejewski

I really like this post. Two thumbs up. If you liked this post too, you may also like a new idea posted by my friend Tim Constantine in a new, high energy group forum called “Way Out of The Box!

Tim also includes a paper on the difference between Design to Build (the old software development paradigm) and Design for Use (a new participatory software paradigm). The paper has great detail, examples, and even a maturity model for how we might measure progress towards this alternate means of software development. Join the group and check out Tim’s idea.

Andrew Krzmarzick

Hi Kim – A couple weeks ago, I read a similar post called “Leadership Lessons from U2” by Scott Elbin. Notice my comments at the bottom of his post – the weekend before his post, I attended a U2 Conference and one of the sessions focused on the brilliant branding strategies of the band. So much to learn from these incredible performers! By the way, Elbin a great blog (as do you!).