Friday, May 25, 2007

Why world sustainability is achievable in the next 40-70 years - The Robin Hood Business Model

One of the arguments I use when discussing about the propagation of new products (like aids drugs, genetic tests, 3d printers, etc) is the what I call the Robin Hood business model (a combination of patent breaking and network effects business model... this is not a really a business model but draws the lines of a very interesting value proposition).

Here is the problem:

I argue that the world will achieve sustainability in the next 40-70 years.
This includes independent sources of energy for every person (solar, organic, whateva), cures for almost all known illnesses (aids, cancer, etc).
Most of these are technologies and discoveries are already here, some of them are in the midst of being created and are generally undisputed.
The problem is not if we have the capacity and the means to become sustainable, because we do.
The issue is more about the whole world becoming sustainable in a relatively short period after the discoveries are made.

The usual counter-argument is normally a two-fold conspiracy one:

c-a-1. Well, companies making these discoveries will try to hold them from propagating by keeping a hold of patents. Also governments and companies will try to not disclose these discoveries in order to keep a competitive and negotiating advantage.

c-a-2. The companies and governments will block the distribution channels of those products by blackmailing other governments, retail stores, etc.

And here is my counter-counter-argument:

c-c-a 1. The propagation of new products and discoveries is unstoppable because:

a. Due to the already high level of technology dissemination and free trade most of the products can be reproduced in any part of the world. Also in an open world like ours the problem of stopping illegal trade is extremely complex and almost impossible to resolve.

b. The products will be produced faster than the duration of the patent (20 years after which anybody can use them). The reason is that many countries will break patents. China is a classic example, also Brazil and Thailand have recently officially broke AIDS drug patents.

c. The previous 2 arguments will create a re-positioning of the patent legislation in order to protect the innovation and free expression.

c. Old business models are inverted and many essential services and products will be offered for free or at a very affordable price. And the sole competition will become who can offer more free and quality products in order for the clients to buy co-lateral ones. (See what is happening in the IT world with free internet, free sites, free tv, etc)

d. Consider recent examples of products and services like PCs, internet connectivity, cellphones, AIDS drugs, that have great penetration rate in the last 7 years in all the corners of the world.

c-c-a 2. In an open society distribution channels cannot be blocked because:

a. For companies the price decides the market. The only way companies can block certain products is to offer similar ones at a lower price. So the products will still penetrate the market. QED.

b. Governments cannot block products that solve sustainability issues like drugs and energy. They can block the discovery and legislate on the use of those products, but unless blatant evidence on the bad effects of a technology or product at some point it will be legislated.

In conclusion, sustainability is achievable with the present economic tools by keeping an economically opened society.

I call the Robin Hood business model the actions taken by countries or companies to:
- break patents to offer a more affordable solution to people in need
- offer free services and affordable products (see Google, Joost, etc) - freminum, network effects business models

The money will come in terms of co-lateral products and services and by creating a trust relationship with the users. And, in the case of governments, by solving costing social, economic and health issues.

- Octavian Mihai

P.S. I will never say it often enough! Ad agencies: WAKE UP OR DIE!

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