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The co-op business model: share whatever you've got (sivers.org)
161 points by gvb on Nov 20, 2011 | hide | past | web | favorite | 17 comments

About the UPC reselling... he really lucked out. Sounds like that was allowed only due to a contract oversight, and has been prohibited since 2002:


Entrepreneurs: “Looking for a loophole, since 1532.”™ ☺

This is textbook survivor bias :)

It sounds like you're implying:

a) This strategy (the co-op model) is overwhelmingly likely to fail b) But every once in a great while, it will succeed c) And some random fluke for whom it succeeded will think it's a great idea and write a blog post like this one, so d) The existence of this blog post is not strong evidence against a)

However, given this scenario, we would expect the distribution of S (number of successful projects a given person started under the co-op model) to be heavily peaked at 0, with a few outliers at 1, and falling to ~0 at 2. This author has started three successful projects under the co-op model, suggesting that this is not just survivor bias -- the right sort of person can, at least occasionally, find success under this model.

No, survivorship bias doesn't say anything about probabilities or even the correctness of conclusion, it's a selection bias. It certainly doesn't imply probability "falling to ~0 at 2".

Anyway it doesn't really matter since this isn't a study or an attempt to prove something, I just think it's funny how well this article fits that definition so I pointed it out.

If it is probable that a person will be able to repeatedly accomplish something, looking primarily at successes isn't survivorship bias — it's just the way the numbers naturally fall out.

Not sure. He did it repeatedly. Of course to give it some more weight we should also look at some "non-survivors" but I'd want to see some that got to step 3 in his advice (monetize.)

There are some companies that monetized (more or less successfully) what they shared for free but I don't know enough of them to draw any conclusions.

no, its real. and its a great way to test whether you have something with commercial value and build a userbase

Great advice. The more you give to the world the more you receive back. (At least that is my hypothesis.)

I do think it ups your odds of receiving back, though a tricky thing I've been trying to sort out is how much it also matters that you actively try to "own" it, so as to capture some of the rebound value.

For example, I sometimes have trouble deciding between writing up an explanation of something as a blog post, versus starting or adding to its Wikipedia article. If I'm being honest, I think the Wikipedia option often provides the most value to the world at large: my contribution will be found/read by more people there, can be improved upon by others to snowball into even more usefulness, etc. But I would probably capture more of the value if I blogged it, because that'd build my personal brand, could generate AdSense/Amazon revenue, etc., while it's harder (though not impossible) to parlay being a respected Wikipedia editor into any sort of benefit.

Interesting observation and distinction! You're right.

I share everything I learn - but only on my own website, not posted on some external site. I write book reviews and notes for every one I read, but only shared on my site, not even on Amazon where it would help more people. I guess it is somewhat selfish!

I want the benefit of getting the direct relationship with the reader, with no middleman.

It's not JUST giving, it's giving and wanting to capture the rebound value (as you say). Not as selfless as it seems.

Thanks for bringing this up. (And thanks for doing it on Hacker News, since I wouldn't have seen it on your own site.)

I don't think it is selfish at all. You put in the work to learn something and you are giving it away for free. People who are earnestly searching for information will find it one way or another.

I'd consider selfish to be learning something and keeping it all to oneself.

I think the most important take-away is that you need to be part of some very active and vibrant community, like indie musicians.

Otherwise your co-op strategy may get to a stall because not enough people will care enough

A little disappointing, I clicked on this thinking that it would be a take on using a co-op business model in a startup setting. But he doesn't really mean a co-op business model at all : http://www.co-operative.coop/enterprisehub/what-is-a-co-oper...

I was hoping this would be about worker cooperatives. However, I agree with everything in the article. There's a great deal of overlap with what I was hoping to read about and what I did read about.

Startups with co-op business models should be called "co-ups".

The thing I remember Derek the most for is CD Baby and the grand switch from PHP to Rails which was cancelled after two years; causing great controversy.

His entrepreneur philosophy has beauty to it, but he was totally off track about the whole PHP/Rails thing. Of course it'll take forever to rewrite an entire company (practically) in a different framework. Don't do that. If you want Rails, switch over incrementally to avoid a Big Bang and use it for new projects.

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