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March 30, 2005 / jnolen

We vs. They: Whose side are you on, anyway?

Last week Fred Wilson and Om Malik argued over the whether there are "we companies" and "they companies." Fred says that Apple used to be a we company, but they've become arrogant and lost their way. They're attacking their fans and the predatorily taking advantage of their users. Om, on the other hand, says this is business, damnit, and companies only look out for their own profits. They're out to "make as much money as [they] can get away with."

First of all, calling Apple a "we" company betrays a certain lack of perspective on Apple's history. But that's not really the point.

Om is exactly right when he says "all companies are they companies." Companies are designed to behave only in their own self-interest. And, in fact, they people in charge are legally obligated to do so.

But there is an insight here that Om misses. It underlies Fred's argument, though he fails to fully articulate it.

Fred says:

“We” companies are built by and for a community of users. Everything (including profits) flows from this core value of serving the users.  We companies and their profitability are incredibly sustainable.

But the key point is this: behaving more openly and engaging their users is in the self-interest of the company (particularly a software company). By engaging the community, software companies can leverage the efforts of more people, increase their knowledge of the market, foster trust, and allow users to solve their own (and each others) problems — returns well worth the investment. Transparency is a smart move, even by the relentlessly selfish standards of the corporate balance sheet.

This is the key difference at the heart of the OSI’s disagreement with the FSF. The open source folk decided that rather than trying to convince companies to be humble members of a technology community, they would be far more successful convincing corporations that being open was directly beneficial to them. It turns out that free software is good for both sides of the equation. Open dialogue between software companies and their users will likewise benefit both parties.

Companies often do a poor job of evaluating their self-interest. They act out of fear or intertia — choosing the most conservative path rather than a more novel plan that would win them happier users and, in the long run, greater profits. Apple’s paranoia and insularity are misguided and ultimately damaging. It’s true that Apple’s primary goal is, and must be, its own bottom line. But they would do well to realize that fostering relationships with their customers — treating them as partners — would lead to even greater success.

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