Brand Union

Insight Analysis

Open source secret sauce

Tim Gosman

September 15 2015

Why brands are giving away their most prized possession

The “open source movement” has long existed in the world of technology, where now ubiquitous products like Linux and Mozilla Firefox were conceived and honed by the hive mind of enthusiasts around the world. The goal wasn’t profit, but simply to see what was possible when infinite intellects and capabilities were combined.

Fast-forward to today, and the term has been adopted outside the tech industry, becoming a buzzword for brands and agencies wanting to appear at the zeitgeist of innovation, pursuing “open source marketing” and developing “open source identities.”

However, when you look at the initiatives that these terms represent, more often than not “open source” is simply being used as a synonym for “crowdsourcing.” Brands are asking consumers to design their identity (see the NYC Football Club) or create their messaging for them (see Doritos “Crash the Super Bowl” commercial and AirBnB’s use of Instagram). Some of these initiatives may have proved to be hugely successful, creating a significant impact for limited investment, but none of them capture what open source really means.

True open source is not just about brands inviting others to collaborate and co-create. It requires them to give up something hugely valuable in return for this assistance – their Intellectual Property, whether it’s a platform, product or service innovation.

"Encouraging and enabling your competition may be the only way to create a sustainable market in which your brand can excel."

Handing over your secret formula obviously represents a much greater gamble than the “open source” initiatives. A consumer-created logo may never see the light of day; a campaign can be quietly consigned to the scrapheap. But making your IP public can be a one-shot deal that makes or breaks your brand and business.

So why do some companies embrace the opportunity to share their secret sauce?

If we look at some of the most famous examples to date, their motivations and the lessons that can be learned by other brands become clear.

He who shares (first), wins.

The last year or so has seen three automotive manufacturers proudly adopt an open source policy to their alternative fuel technologies. Yet there is really only one name that has become synonymous with automotive open source, and that’s Tesla.

In June 2014, the company published a letter titled “All Our Patent Are Belong To You” that encouraged other manufacturers to explore what once would have been seen as its hugely private and proprietary electric vehicle technology.

What prompted Tesla to reveal its IP to a fiercely competitive industry? Well, to quote founder Elon Musk, “Tesla was created to accelerate the advent of sustainable transport. If we clear a path to the creation of compelling electric vehicles, but then lay intellectual property landmines behind us to inhibit others, we are acting in a manner contrary to that goal.”

However, he also admits that it wasn’t altruism alone that inspired an open source approach. Electric vehicles currently constitute less than 1% of total sales from major manufacturers. For Tesla to be successful, it needs to establish an infrastructure that makes electric vehicles a viable alternative to gas-guzzlers. By sharing its IP with others, Tesla hopes to encourage other manufacturers, with far less interest but far greater resources, to help build the charging network that will make its vehicles viable.

Crucially, as the first to adopt an open source strategy, perhaps Tesla has given itself the greatest chance of success. Both Toyota and Ford have recently made similar open source pledges, but Tesla, as the trailblazer, continues to receive the credit and column inches. It’s too early to tell whether this approach will be the catalyst the company needs, but with heavyweights like BMW, Nissan and Mahindra all rumored to be interested, Tesla has reason to be optimistic.

So what’s the lesson? The old adage/cliché still applies. There is no point exploiting a gap in the market if there is no market in the gap. Adopting an open source approach to innovation is undoubtedly high risk, but encouraging and enabling your competition may be the only way to create a sustainable market in which your brand can excel.

The advantage of alliance

While Tesla embraced open source in order to create a new category, the Android brand used it to take quick control of an established one that was already dominated by a formidable brand: Apple.

Google, and Android’s creator Andy Rubin, realized that mobile phone carriers and manufacturers were threatened by Apple’s strong relationship with consumers, while developers felt handcuffed by its strict rules and approval process. Appealing to both audiences by making the software open source united a formidable stable of brands behind it, all of which have a vested interest in its continued development and success. The partnership was formalized in 2007 when Google, HTC, Samsung, Sony, T-Mobile and 80 other companies joined forces to create the Open Handset Alliance, officially launching Android as its first initiative.

Allowing carriers and manufacturers to modify the Android operating system and add their own branding gave these partners confidence that Google wouldn’t have absolute power over the platform, and created a series of co-branding agreements in which Android was the common denominator. The results of this alliance speak for themselves, as the open source Android has superseded Apple’s closed iOS as the preferred platform for consumers, achieving a current global market share of 73%.

The lesson? While allowing other brands to take ownership of your innovation can affect the quality and consistency of the consumer experience, these alliances can also ensure immediate influence in even the most competitive of markets.

Talking openly

The final open source brand that is worth highlighting is one that has content, rather than software, at its core. Over the course of 25 years, TED Talks has established itself as the most renowned platform for discussing the convergence of entertainment, technology and design. Still, the organizers realized that simply giving people access to the content was not enough. People wanted to contribute their own content and saw TED as the perfect platform on which to accomplish this.

So TED took a risk and introduced a sub-brand, TEDx, that allowed a more grassroots approach. Wherever people had “ideas worth spreading,” they could use the TEDx name and its assets to run their own conference, giving their content publicity and credibility through this association.

Of course, going open source also gave TED a substantial competitive advantage, allowing the organization to expand into more than 133 countries and spread over 40,000 ideas in just five years.

While these numbers are impressive, the decision to go open source has not been without its critics, with the chief complaint being the lack of quality control that now exists. However, the head of TED, Chris Anderson, explained that “…it’s only by genuinely granting power to local organizers that TEDx could have achieved its current scale. Organizers learn from each other, and we are committed to empowering them with tools and advice that will allow each year’s events to be a little better.”

Creating the TEDx sub-brand also preempted concerns over quality by ensuring all open source content would be kept one step removed from the core brand. In effect, TEDx has now become the feeder league, with those who prove themselves on this circuit receiving invitations to speak at the main events.

The lesson? TED’s canny approach shows how open source sub-brands can be used to test the waters for extensions and innovations, while ensuring mistakes have a low impact on the credibility of the core business.

What Tesla, Android and TED have in common is that they have all adopted an open source approach to greatly increase the influence they wield, and demonstrate real commitment to the higher purpose they represent, be it sustainable transport, limitless communication or sharing ideas and inspiration. Whether they’re attempting to create a new market, challenge the leader in an existing one or dramatically accelerate growth and influence, these brands understood that making their secret sauce open source was a risk, but one with the potential for exponential returns.