Very interesting guest contribution by Robert Young of Weedshare in the GigaOm blog, which focuses on the shift in power from businesses to communities.

He takes the right approach, which is neither to say that communities and individuals are simply manipulated in commercially mediated platforms, nor that communities are fully autonomous, but that it represents a field of tension with mutual adaptation of both actors, but with nevertheless, a shift in the Long Tail of Power Distribution.

What he especially covers in this piece is that walled gardens (based on creating high switching costs) are becoming counterproductive, since they impede the flow of connections and people will increasingly choose open approaches, yet at the same time, communities are creating their own swithching costs, based on accumulated trust and connections they achieve in particular environments.

Read the whole argument here.

Excerpt:

“But in a world where people themselves are increasingly becoming the sources of content and the owners of distribution, any product development strategy that aims to proactively increase switching costs becomes antithetical to the gravitational pull of the market (as AOL is now painfully experiencing). In fact, in many markets, we are likely to see an inversion of control, where vendors will increasingly rely on their customers to provide them with their strategic and competitive advantages. Put another way, the tail will start wagging the dog.

So in such an open and unpredictable environment of consumer control, what happens to the notion of switching costs? The answer, on its surface, is actually quite simple. The importances of switching costs do not disappear. They will always remain a critical success factor for building market share and defending against competition. What does change, however, is who creates and controls it.

It won’t be the corporation that locks its customers into a walled garden any more; instead, it will be the people themselves who create their own high switching costs. For instance, if you are an eBay seller, your switching cost is not so much the relationship you’ve created with eBay itself and the store you set up, it’s the reputation and trust you spent years building with fellow members of the community. Similarly, if you are a member of MySpace, it’s not the web-page and blog you spent time constructing, it’s your social network of cyber-friends you’ve cultivated and accumulated over time.

At the end, the lesson is one of a paradox. As the power shifts increasingly towards community, the corporation loses its grip on the traditional means of control. Yet, by letting go of control, the corporation creates an environment where the community willingly creates its own switching costs.”