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Harvard Case - Triumph of the Commons: Wikia and the Commercialization of Open-Source Communities in 2009

"Triumph of the Commons: Wikia and the Commercialization of Open-Source Communities in 2009" Harvard business case study is written by Shane Greenstein, Rebecca Frazzano, Evan Meagher. It deals with the challenges in the field of Organizational Behavior. The case study is 24 page(s) long and it was first published on : Dec 1, 2009

At Fern Fort University, we recommend that Wikia, while maintaining its open-source ethos, adopt a more strategic approach to commercialization, focusing on building a sustainable business model that leverages its unique community assets and fosters long-term growth. This involves a multi-pronged strategy encompassing:

  • Developing a clear value proposition: Wikia needs to articulate the benefits of its platform for both users and advertisers, emphasizing the reach, engagement, and trust associated with its open-source community.
  • Diversifying revenue streams: Beyond advertising, Wikia should explore alternative revenue models such as premium features, content licensing, and partnerships with brands seeking to engage with its passionate user base.
  • Investing in community management and engagement: Wikia must prioritize fostering a thriving community by providing tools, resources, and support for its contributors while ensuring a positive and inclusive environment.
  • Building a strong leadership team: Wikia needs to attract and retain talented individuals with diverse skills and experience in community management, business development, and technology to navigate the challenges of growth and commercialization.

2. Background

The case study focuses on Wikia, a collaborative online platform founded by Jimmy Wales, the co-founder of Wikipedia. Wikia leverages the power of open-source communities to create and maintain a vast repository of user-generated content across various topics. While Wikia initially embraced a non-profit model, the need for financial sustainability led to the exploration of commercialization strategies. The case study highlights the complexities of balancing the open-source ethos with the demands of a viable business model.

The main protagonists of the case study are:

  • Jimmy Wales: The visionary leader and co-founder of Wikia, who believes in the power of open-source communities and the potential of Wikia to democratize knowledge and empower users.
  • Angela Beesley: The CEO of Wikia, tasked with navigating the challenges of commercialization while preserving the core values of the platform.
  • The Wikia community: A diverse group of passionate individuals who contribute their time and expertise to creating and maintaining the content on Wikia.

3. Analysis of the Case Study

Organizational Culture and Leadership Styles: Wikia's success hinges on its unique organizational culture, characterized by collaboration, openness, and a strong sense of community. This culture, fostered by Jimmy Wales' visionary leadership, has been instrumental in attracting and retaining dedicated contributors. However, the transition to a commercial model necessitates a more strategic approach to leadership, requiring Angela Beesley to balance the open-source ethos with the need for financial sustainability.

Change Management and Employee Engagement: Introducing commercialization strategies within an open-source community requires careful change management. Wikia needs to communicate its vision clearly, address concerns, and actively involve the community in the decision-making process. This will help maintain employee engagement and ensure buy-in from contributors.

Team Dynamics and Motivation Theories: Wikia's success relies on the collective effort of its contributors. Understanding team dynamics and applying appropriate motivation theories is crucial for fostering a productive and engaged community. This includes recognizing and rewarding contributions, providing opportunities for growth, and fostering a sense of belonging.

Decision-Making Processes and Power and Politics: As Wikia navigates commercialization, decision-making processes must be transparent and inclusive to maintain trust and avoid conflicts within the community. Navigating the power dynamics within the organization and ensuring that all stakeholders have a voice in shaping the future of Wikia is essential.

Technology and Analytics: Leveraging technology and data analytics is crucial for Wikia to understand its user base, optimize content, and personalize experiences. This includes using analytics to identify trends, measure engagement, and tailor advertising to specific user segments.

4. Recommendations

1. Develop a Clear Value Proposition:

  • Define the unique benefits of Wikia for both users and advertisers.
  • Emphasize the reach, engagement, and trust associated with its open-source community.
  • Highlight the platform's potential for brand building, audience targeting, and content creation.

2. Diversify Revenue Streams:

  • Explore alternative revenue models beyond advertising, such as:
    • Premium features: Offer enhanced functionality and features for users willing to pay.
    • Content licensing: License Wikia's content to other platforms and businesses.
    • Partnerships: Collaborate with brands seeking to engage with Wikia's passionate user base.

3. Invest in Community Management and Engagement:

  • Provide tools, resources, and support for contributors.
  • Foster a positive and inclusive environment.
  • Implement feedback mechanisms to address concerns and improve user experience.
  • Recognize and reward contributions to maintain motivation and engagement.

4. Build a Strong Leadership Team:

  • Attract and retain talented individuals with diverse skills and experience in:
    • Community management
    • Business development
    • Technology
  • Foster a collaborative and transparent leadership style that values input from all stakeholders.

5. Basis of Recommendations

These recommendations are grounded in the following considerations:

  • Core competencies and consistency with mission: Maintaining Wikia's open-source ethos and its commitment to empowering users is crucial.
  • External customers and internal clients: Balancing the needs of advertisers with the interests of the community is essential for long-term success.
  • Competitors: Wikia needs to differentiate itself from other online platforms by leveraging its unique community-driven model and content.
  • Attractiveness: The recommendations aim to create a sustainable business model that generates revenue while fostering a thriving community.

6. Conclusion

Wikia's success hinges on its ability to navigate the complexities of commercialization while preserving its open-source ethos. By adopting a strategic approach that prioritizes community engagement, diversifies revenue streams, and builds a strong leadership team, Wikia can achieve both financial sustainability and continued growth.

7. Discussion

Alternatives:

  • Remaining solely non-profit: This option would limit Wikia's growth potential and could lead to financial instability.
  • Aggressive commercialization: This could alienate the community and compromise Wikia's core values.

Risks and Key Assumptions:

  • Community backlash: Introducing commercialization strategies could lead to resistance from contributors.
  • Competition: Wikia faces competition from other online platforms, both commercial and non-profit.
  • Technology trends: Wikia needs to adapt to evolving technologies and user preferences.

8. Next Steps

  • Implement a clear communication strategy: Communicate the vision for commercialization to the community.
  • Develop a pilot program: Test different revenue models and gather feedback from users.
  • Build a dedicated team: Assemble a team with expertise in community management, business development, and technology.
  • Monitor progress and adjust strategies: Continuously evaluate the effectiveness of the commercialization strategy and make adjustments as needed.

By taking these steps, Wikia can successfully navigate the challenges of commercialization while maintaining its open-source ethos and fostering a thriving community.

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Case Description

In 2009 Wikia was the Internet's largest for-profit provider of hosted open-source wikis, with over a million daily users. After five years of existence, the organization had supported a wide range of exploratory activities, experiencing both success and failure. With approximately $3 million of cash on hand, Wikia turned cash flow positive in 2009, with revenues of approximately $4.5 million, affording it time and flexibility to try new things. Some of the company's employees and investors suggested that Wikia should attempt to expand and market itself more aggressively, but which strategic direction should receive priority? The case presents many of the issues and tradeoffs facing CEO Gil Penchina as he formulates these priorities.

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