The Opposite of Toll Positions - But Just As Profitable

[Ankesh]

I recently met Matt Mullenweg - the founder of WordPress. And it was quite epiphanious for me.

1.

Toll positions is all about control. You control the product or the distribution - or both. And make money by collecting a toll - a fee.

2.

On the other hand - there is open sourcing. Which means giving away total control. Let everyone come on board and make changes and tweak things. No single person has complete control. No toll can be collected.

But even using this open source model - WordPress became the biggest blog platform company - even though they were not the first on the scene.

And being the fastest one to grow the biggest - they are making a lot more money from other avenues too. By selling optional premium services and things like that.

I think open sourcing will always beat a controlled toll position product in the long run. Because it has the potential to attract the masses in speeds never seen before.

Eg: Prediction: Google Android will beat Nokia and iPhone. Because it is open source.

3.

The best model of course is somewhere in the middle. One that uses parts of the toll position strategy. And parts of the open source strategy.

One organization that comes to my mind is Toast Masters.

1. Its open source as in anyone can open a Toast Masters outlet in their neighbourhood.

2. But it has a toll position too - because every new Toast Masters chapter needs to get all the educational material from them.

Today - Toast Masters has become the biggest public speaking education company out there.