What I learned from the Free Culture Incubator

Knowledge Collection Social Innovation
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My name is Ela Kagel, I am a freelance curator and producer based in Berlin. For the past two years I have been running the Free Culture Incubator, a workshop series for freelance creatives and cultural workers. This initiative was a collaboration between the transmediale Festival for Art and Digital Culture, and the Governement’s Center of Excellence for the Cultural & Creative Industries. Basically, the Free Culture Incubator was a platform for researching the price and value of freelance creative work. When I started this project in 2010, I was very optimistic that an ongoing series of workshops and debates would help us in understanding more about the economic side of our work. Now, two years later, I have a much better idea why it is so challenging to make a living in the sphere of the free & open:

1. Fuzzy Terminology

There is potentially a vast space for misunderstandings between two people who talk to each other. We all know that. It’s already there if we talk about regular things, like taking care of our kids or how to bake a pie. However, when it comes down to all the fuzzy and grey-zone topics which very often don’t even have a local name, the likelihood of misunderstandings gets bigger and bigger.

The Free Culture Incubator merges two different worlds: the idealistic sphere of free & open culture and the business incubator, breeding new profitable ideas. One of the problematic things around the Free Culture Incubator is rooted in the label “free” or “open”. It provokes a whole range of false expectations, such as “free” as in “freedom of price”. Other terms are highly unclear, too: “creativity” or “values” for instance. We all have a vague idea of what’s behind these terms, but at the same time the range of interpretations is simply too wide to get a clear message across. And this is actually something that weakens our position on the long run. If we lack the words to clearly state what we do, and how we do it and what it costs then we can’t expect others to support us.

Jodi Rose, a Berlin-based artist and curator, has written a remark about that in her blog

“….Indeed, the importance of naming is that the terms we choose both defines and creates the space and marks the boundaries or limits of potential. Naming is an act with powerfully resonant political and philosophical implications.” Very true.

2. The Creative “Industries”

According to the official image of Berlin the city is in abundance of creative jobs and the cultural & creative industries are making tons of money. Reality tells a different story, though. There ARE few branches within the creative industries which are profitable, but others are still struggling to make a living. Just merging ‘creativity’ and ‘economy’ doesn’t automatically lead to new economic models, or necessarily shape the transformation from a creative initiative into a business. This is a long and challenging process marked by trial and error – and we are currently far from efficient mass production, as the term “industry” suggests. BTW: setting up industries is not the prime goal of most creatives, either. On the contrary, a growing number of self-employed cultural & creative workers are trying to establish alternative forms of economic production and value transfer.

Talking of values: the traditional business plan is our one and only reference system to economic value. Wouldn’t it be just about time to think of alternative metrics that allow for the conversion of cultural values into a price in a more differentiated way?

3. The Price and Value of Creative Work

We still know very little about the price and value of creative work. Despite our obsession with everything ‘creative’ we have problems to put the creative work into an economic perspective. This has many different reasons, and I don’t want to elaborate on all of them, but one aspect seems to be important to me: Markets are usually based on price systems which everyone can refer to. Within such a system, everyone can clearly navigate between high price and bargain offers and people are able to tell the difference between products or services - in terms of quality, quantity or exclusivity. In the sphere of the ‘free’ and ‘open’ we cannot rely on any traditional value or price structures. Everyone has to come up with their own value proposition, which often turns out to be quite a solitary venture. At the same time, politicians love to see us all as part of a larger collective, the so-called ‘creative class’ or the ‘cultural market’. No matter if these entities actually do exist or if they are just a fantasy of city marketing campaigns, there IS a growing need to unite forces and share knowledge & resources. The big question is just to what kind of network or collective people can actually relate to. I am glad about initiatives such as Edgeryders, as they offer a homebase for people who are willing to share & connect. And I hope that the platform will become strong enough to keep up the connections over a long period of time.

These are the key findings I am taking with me after two years of Free Culture Incubator. If you want to know more please do get in touch!

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Thank you Ela

I think you sum up what for me as a practitioner within the “creatives industries” has been and still is a disconnect. Each one of the insights you have shared would warrant an entire discussion let’s see if we can invite or inspire more input into this space. I wonder though Ela, have you managed to have time to think about the “what next?” or what kinds of people or knowledge that you feel might be helpful in exploring further some of the issues you raised?

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What’s next?

Hi Nadia,

thanks for the comment. I am currently thinking a lot about how to move on with the insights I gained from the Free Culture Incubator series. Especially these three questions keep me busy and I want to follow up on them: How can an open, collaborative initiative transform itself into a sustainable, long-term enterprise? Can such a step be taken maintaining the concept’s initial integrity while at the same time preserving the interests of the community? And, is it at all possible to convert cultural value into a market value?

I would be happy to get comments and contributions from everyone who has an interest in these topics, too. A possible next step would be a concise evaluation of the 12 workshops, preferably with a group of people who have a profound expertise in community management. Maybe there is someone here on Edgeryders who would like to connect? Would be most welcome.

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Welcome Ela! : )

Welcome Ela!

 
I've just read your precious contribution and the follow up comments and I'll try to directly answer your questions. 
How can an open, collaborative initiative transform itself into a sustainable, long-term enterprise? 
Can such a step be taken maintaining the concept's initial integrity while at the same time preserving the interests of the community?
I'm not very acknowleged in the open source world but for example I use Wordpress for my work and it is an example of long-term flourishing enterprise that's an open collaborative initiative. 
 
Outside software things are little harder but just today I stumbled upon Windowfarm: that looks like an example of profitable business that grew out of an online collaborative open-source like environment (http://www.windowfarms.org/abouttheproject)
Did I get the question wrong??
 
And, is it at all possible to convert cultural value into a market value?
Well. If an example of cultural value is, let's say, the ability to play an instrument: a musician that get paid to play in a pub is doing this conversion, isn't he?
But I'm sure I'm missing again some points... it can't be so simple!?
 
I've just browsed the materials of the free culture incubator: I found again the same questions but in the same words. Could you articulate a little bit the two questions? I'm really curious about getting more out of your experience! Thanks for your patience : )
Giacomo
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Hi Giacomo,

actually, you didn’t get anything wrong. You just interpreted the questions in a way that makes sense for you. And here you can see the point I raised in my initial goal: we are dealing with many vague terms, which leave a lot of space for interpretations. What I meant with my last question was:

If you create a cultural contribution, say, a story or a ritual of whatever, is it possible to stick a price tag on it? Should money be the only reference system for value conversion? How to financially measure a cultural value?

Ok, now we end up with even more questions, I know :slight_smile:

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Embracing the “economy” in creative economy

Ela, let me congratulate you for a super-interesting reflection on a matter dear to my heart. I have earned my living by selling my skills both as an economist and as a moderately successful musician (in the period 1995-2000), so quite naturally I have given it quite a lot of hard thinking.

My take on the issue has been to go all the way. Yes, perhaps there should be more recognition for cultural work. Yes, it can be counterintuitive that some people are paid and other have to pay to do exactly the same activity (like performing music). But, realistically, I am not going to be able to change this. If I want to earn a living by making art or culture, I am going to have to make it work financially within the existing context, not in some ideal world. And I and my partners did so, and we walked the straight and narrow path between righteous disdain of commercial concerns - which can be creatively sterile, because art is communication, and there is no communication if people don’t react to what you are doing - and outright whoring. It went well enough that we could support ourselves confortably, no frills.

In 2008 I put on my economist’s hat and built up a project on the creative economy for the Italian Ministry of Economic Development. The reasoning was this: creativity, in a market economy, tends to drive at least some economic activity. The Ministry, had a lot of money to foster economic development in the lagging areas of the country (you may have heard of southern Italy historically not doing as well as the north. A natural German analogy would be the ex-DDR Laender shortly after the Vereinigung), and was dissatisfied with its own lack of impact. The funding would be captured by consultants and organizations that could deliver paperwork, but not good results: this was a function of the bureaucratic, formalistic way public expenditure administration is organized in Italy. So I said: “Look, if we can teach creatives to put forward their ideas in a structured way they can be more effective at bidding for funding”. The result was Kublai, a peer-to-peer environment for developing projects and even micro companies in the creative sector. It still exists, mostly online (last time I checked it aggregated about 3.000 creatives working on 400 projects).

Kublai works by encouraging creatives to put their ideas in written form, answering all of the hard questions that you need to address in a well-written business plan. Why do we need this? Why are you the most qualified person to deliver it? And so on. It worked well enough, and several projects and companies were launched from within the Kublai platform. But there is a price to pay for success, if you call this success:

  1. not everybody can succeed. Everybody can make a credible proposition, if they work hard, but only a minority will break even. The arts and culture are seemingly characterized by a structural oversupply of labor, which is just a fancy way to say that everybody wants to be an actress or a guitarist. Harsh selection keeps the ecosystem healthy, but it can be hard on the individuals. This was always the case: I grew up in a small town before the Internet, and it was practically impossible to get the ear of professional A&R people. (Rock) musicians were recruited through highly idiosyncratic channels concentrated in one major city per country. 
  2. in a market economy, artistic success just is not going to happen without a healthy dose of strategic thinking and entrepreneurship. Sometimes it will be some manager figure to supply them: since everybody and their horse are competing for these figures' attention, it is increasingly the artists themselves who have do to the dirty work. In Kublai, we worked to reprogramme creatives from a "my ideas are not recognized" attitude to a "homework first, recognition maybe later" one.
Does this correspond to your experience?
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Greetings Alberto, and thanks for sharing your experiences and questions. I haven’t heard of Kublai before and so I checked it. Due to my poor Italian I probably didn’t fully grasp the idea, but I understood that it works as a shared resource center, with people presenting themselves in their profiles, the allegory of a marketplace and a matchmaking structure in order to tap on the resources at hand.

I can totally relate to this idea and I think that we are just witnessing the rise of many different platforms and initiatives which work on the basis of “wanted & for sale” principles, no matter if they are based on barter systems, resource exchange or other paradigms. And I also believe that each of them brings benefit to the community. Having said that, I can also see the potential problem of building up ‘parallel universes’ which function in their own right, but basically in disconnect to the “real” marketplace out there. I believe that we need community-centered resource platforms in order to exchange goods, skills and know-how on a very practical level - however, if we don’t manage to connect these trading systems to the economic marketplace then we are lost in our small worlds.

About the two points you have raised: Certainly not everyone will break even. And just beause some creative industries-initiatives nowadays provide manuals on how to become a sucessful pop singer doesn’t mean that everyone will get there. The popular mantra of the super-succesful creatives, often spread by governments and city marketing agencies, seems quite a myth to me. In order to quantify and qualify this claim, one should have a common understanding of what ‘success’ actually means on a personal level and then we should take a closer look into the actual revenues generated by ‘the creatives’. Once we have a realistic framing we can start to think of how to integrate entrepreneurial priniciples into the world of an artist or creative producer. And maybe it just takes some very basic down-to-earth-arrangements in order to trigger the economic independence of creative workers. Like what you suggested with ‘doing your homework’ first.

I think we need a profound understanding of entrepreneurial basics & self-marketing skills AND, on a parallel track, we should explore all these ideas about alternative economies and independet trade systems. We need to understand both sides, the current system and what may or may not come in the future. We can’t just rely on the traditional business plan, but setting up a creative business without such a reference system wouldn’t work either. So for me it’s all about integrating both positions in order to help creatives to sustain themselves.

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Actually, no :slight_smile:

Ela, Kublai is not a quasi-market place. It is simply an environment where people with a creative idea can ask for help to develop it into a business plan - or at least a plan that addresses the question of its sustainability. Such plans grow by iterations: the proponents upload a version, other participants poke holes in it and propose suggestions. Then the proponent uploads a new, improved version, and the process is iterated until the plan is solid. At this point, the proponent takes it and goes out of Kublai to look for allies: backers, clients, whatever. Typically the interaction on Kublai mentions possible backers and what issues the document describing the project should address in order to make it attractive to different kinds of backers. This is quite effective because of the great diversity of the community: different people have interacted with banks, foundations, government agencies, venture capitalists. Some actually work for banks or foundations, or are themselves VCs.

So, you see, ideas are developed within Kublai, but they need to be tested outside of it to be declared successful. This prevents the disconnect you are rightly worried about.

You are completely right about the need to tailor our initiatives to our own measure of success, and not to someone else’s. The Ministry of economic development in Italy is well equipped to do that: since it comes from a regional development perspective, and not a cultural one, it does not really care about global artisitic success. A lot of regional development policy is in helping micro entrepreneurs to open up very small businesses: a barber shop, a small café, a pizzeria. Helping a deejay to get a local club night off the ground is not so different, and it has a measurable regional development impact even if the deejay does not go on to be Fatboy Slim.

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I see :slight_smile:

Thanks Alberto for clarifying. Now I got the mission of Kublai & was just thinking whether we I have heard of similar initiatives before? Probably not. The idea of a pre-market, community-based testbed for businessplans makes a lot of sense. How do you make sure you get enough community expertise on the platform, though? Is there an editorial team to accompagny the iteration process?

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The smarts are in the collective

There is a team, but  I would not call it editorial. I was the only one with significant first-hand knowledge of any creative sector (music), and I am gone now. The work was aimed at making Kublai a friendly, welcoming, result-oriented place, and at teaching people how to participate in a constructive conversation. After some months we realized we had a staggering amount of knowledge embedded in the community: from venture capitalist to lawyer, from clown to festival organizer, there was one of practically anything we could think of. Some of the stuff was off-the-scale weird: “I produce news shows staffed by schoolchildren to educate them to a critical apprach to media”, “I am running a community kitchen and teaching food design”, “I have revived a Medieval method for tanning leather using only vegetable-derived materials”, “I am a sismologist writing a theater play on the great Southern Italian earthquake in 1980”. When you needed a specific skill that was not easily available in the community, we would simply go out and ask for help. Most people will help, if you ask kindly.

So, you see: the problem was not editorializing, but wiring the community so as to increase the ability of each member to access everyone else’s knowledge and skills. We are trying to make Edgeryders one such place, and it is getiing there! :slight_smile:

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Trust

Hey guys, don’t mind if I jump into the conversation…

What about the trust issue? How did you manage to convince people they would benefit from sharing publicly their ideas?

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How to gauge the Market potential of a startup- relevant?

Hai Ela,

I still can’t get the idea of trying to figure out how much culture a society or community can support out of my head. But not just in terms of money, but in terms of capacity to process it or even give it attention/ time in our lives…I just came across this post outlining how to figure out a market value for a startup and was thinking about what the equivalent article for figuring out the social value of a cultural contribution would contain…could be a fun exercise no? http://www.businessplanexecutivesummary.com/2012/02/how-to-calculate-market-potential-for-a-startup.html

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that’s exatly the point!

Thanks for sharing, this Nadia. Before we could get to the point to figure the market potential of a cultural contribution we would have to create some sort of metrics to overcome the businessplan paradigm, then set a conversion rate to transform ‘cultural value’ into money and then eventually we would end up at something similar to what you linked above…nonetheless, would be a challenging research!

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I’m thinking about

dear Ela,

your mission for me is one of the more interesting than those I’ve read on Edgeryders because from a couple of years I’ve been asking myself the same questions and I’ve been searching people and places to discuss these topics.

I’ll try to answer your questions referring to my little experience of partecipant to open and collaborative processes, but also of project manager of this kind of process.

to avoid misunderstanding  I’d want to clarify that with “open and collaborative cultural/creative/artistic projects” I mean a process through which an idea (borned in the head of one person or of a group) becomes real, tangible, active and effective by involving and engagement of people in various ways (crowdfunding, simple endorsement, physical partecipation to the realization, crowdsourcing, peer to peer learning etc.).

Can such a step be taken maintaining the concept’s initial integrity while at the same time preserving the interests of the community? question that I also connect to this other

If you create a cultural contribution, say, a story or a ritual of whatever, is it possible to stick a price tag on it?

I think that people who decide to take part to this kind of processes they know that the open and collaborative process is an horizontal one, but there has to be a kind of left side and right side of the horizontal collaboration line: everyone partecipates, but there has to be someone who collects and elaborates contributions in order to translate them in concrete decisions and to go on with the project, maintaining the integrity of the initial idea. Usually this is the role of the team project.

By my experience I learned that the important is that the partecipants / contributors perceive that their contributions have all been taken into account and respected. I tried to realize this with the absolute transparency of all decisions: explaining the why and the how of every decision and, in case of crowdfunding, showing how and why the money is been utilized.

participants in the project knows that your idea has value and that they are contributing, know that eventually the value will take a price and a possible income for you, but I do not think that their problem is the fact that you can earn from collaborative process and they do not. otherwise they will not participate. maybe then you’ll be contributing to their next initiative, as they did with you.

How can an open, collaborative initiative transform itself into a sustainable, long-term enterprise?

is it at all possible to convert cultural value into a market value?

this is a really intricate issue!!!

I think that a possibility to survive in the long term and convert cultural value in a market value is

  • the most possible clearity of the mission in order to the team and the network of the project know what is the final goal and in this way it is limited the possibility of misunderstanding.

- new types of indicators in the business plan and calls (bandi) for public funding in order to clarify the economic, social and territorial impact of a collaborative cultural / artistic / creative project, different from the usual return on investment

I hope that I’ve given you some materials for reflection.

alessia

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The role of the facilitator in collaborative processes

Thanks a lot Alessia for your reply,

you are raising an interesting point with the person who accompagnies and “collects” all the contributions, processes them and opens them up for a wide community use. This is indeed a crucial question. I have learned from my own experience that each collaborative process 100% relies on good facilitation. This starts with bringing people together, creating the right space and atmosphere for the work, then moderating the process and following up on the results afterwards. In most cases, this work is unpaid and based on mere enthusiasm. In order to keep the community manager’s motivation alive, it is important that a) the community manager has a clear mandate and b) that the community agress on a specific compensation for this work. I have seen many projects that started with a lot of energy, which just evaporated after a while because there was not enough support for the facilitator. Having said that, I think it is really key to create a common memorandum of understanding, which should include a description of tasks and responsibilities, the common goals and maybe also the life cycle of the collaborative endeavour.

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Compensating Creators for Free Culture

Some very provocative questions, Ela.

I think  it’s important to keep in mind that the present copyright-based system hasn’t been all that great for creators. So we should compare how content creators fare under free culture to how they’re actually being compensated under the old system – not to the system’s shiny rhetoric (e.g. “artists need to eat” and other RIAA propaganda).

Under the old system, not only do the vast majority of sales revenues go to the content companies rather than the creators, but the companies restrict creation to a relatively limited stable of artists.

And the only thing that can’t be monetized under free culture is the content itself – i.e., no  artificial scarcity rent.  Real scarcities can still be monetized (e.g. the classic example of tickets and concessions for musical performers, customization and support for a Linux distro, etc.).  Besides that, time, attention and convenience are real scarcities that can be monetized.  It’s time-consuming and inconvenient to hunt down a “free” iteration of a cultural good that’s complete, the exact version you want, and has guaranteed authenticity.  That voucher of completeness and authenticity, presented at a convenient venue like the creator’s official website, carries some value for all but the most time-rich and money-poor.  Even charging $0.50 per song for this convenience will bring in a modest revenue.

With the near-zero overhead costs of marketing content through a website, whatever revenue does come in is all income free and clear to the creator.  I’m too lazy to look it up, but I recall seeing a story (by Masnick? Doctorow?) about some study that found while the total revenue stream of the recording industry had fallen significantly because of file-sharing, the portion actually going to artists hadn’t fallen at all.

At the same time, the time and trouble of setting up an alternative distribution venue for some free cultural good (e.g. setting up a competing print-on-demand facility and sales outlet for a book) carry some modest rents.  For any books except those with very large sales, the potential revenues from setting up a rival printing and sales operation and selling at a lower price are probably not worth the trouble of doing so.  So as long as a writer limits the price of POD books to only a few bucks over production costs, and doesn’t get greedy, the rents from being the first to put it in print and the recognition and convenience of having an established site will probably produce at least a modest revenue stream.

I’ve found this to be true, at any rate, with the books I’ve published through a POD service.  I make a few thousand dollars in extra income each year from royalties on the books, which are all under a CC license for free reproduction for any purpose (including commercial) with attribution.  And the last I checked, the pdf’s were all available for free download from multiple torrent sites as well as my own official websites.  If anything, the free content has served to promote my books and get me sales I wouldn’t otherwise have had.

And whatever modest income I get is larger than I would have gotten under the legacy publishing industry.  I seriously doubt I would even have made it past the gatekeepers at a conventional publisher – my books wouldn’t have been seen as producing enough revenue to support the editing and promotional machinery and offer a profitable return to the company.  Even if I did get a publishing contract, the fact that their marketing people have less of a feel for my niche market than I do combined with the smaller percentage of sales they’d allow me to keep would probably have meant I got even less revenue under the conventional model.

Even if content creators fare at least comparably well under free content, though, it’s still not enough to support the vast majority of creators.  I expect the real solution, in the long run, will come about through the slow, ongoing collapse of the corporate state.  As more and more production is relocalized, rates of underemployment continue to rise, the share of value created through self-provisioning in the informal and household economies increase, and people turn to socially-based expedients to replace government- and employer-based safety nets, it’s likely they will create primary social institutions.  Such institutions will include, among other things:  multiple-generational, extended family households or compounds; large co-housing projects and neighborhood cooperative living arrangements; urban communes; lodges and mutual aid institutions, etc.

At the end of the transition, the average person will likely be born into some shared living arrangement with anything from a dozen to a hundred people pooling costs and risks, producing a major share of total consumption goods through intensive horticulture and garage CNC tools, and providing social safety net protections to the aged and incapacitated.  In such arrangements, even if wage labor still survives on some scale, only a fraction of the social unit’s total membership will take paid work outside in order to bring in money for expenses that can’t be met internally or through barter/gifting with neighbors.

I believe such conditions will be conducive to the revival of folk culture as something created as a byproduct of organic social  life, as well as art as an aesthetic value embodied in the creation of ordinary household goods and decorations.

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thanks a lot, Kevin

for this amazing overview! I really appreciated your thoughts on how a future alternative economy might look like. I am interested to know to what extend you can relate to the sharing economy ideas, promoted by platforms such as shareable.net, the Abundance League, sharism and others. Neil Gorenflo is one of the drivers in that field & his blog post on shareable.net is still very insightful for me: http://www.shareable.net/blog/the-new-sharing-economy

What are your thoughts on that?

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Thanks, Ela. It seems to me that kind of sharing would be extremely important in the kinds of primary social units I speculated on, as a way to get maximum efficiency out of capital goods rather than duplicating them.  Thanks for the reference to the Neil Gorenflo material.  I’m heavily engaged in researching alternative economic platforms (phyles, etc.), so this will be useful.

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BTW

You might be interested in this article by Michel Bauwens on achieving economies of scope through sharing: