What we know of social commerce, i.e. the forms of business taking advantage of social networks, such as Facebook or the ad network of Google, are still based on a vision of individualism, albeit a network version. Taking advantage of their understanding of Metcalfe’s Law, which states that each additional network node exponentially grows the amount of linkages between individuals, marketers are busily positioning themselves in their interstices of these relations. They do this because modernity has made them comfortable with individuals, even though they were previously both atomized but also massified through the media. They are learning about the new relationality rather quickly however. This model is especially prevalent amongst social media and social network sites, and in what I call the sharing model, whereby individuals are less cooperating around a common goal, but sharing their own expressivity, hence constituting only ‘weak ties’ amongst each other.

But social media and networks have another aspect, highlighted by Reed’s Law, which states that each additional node to a network, exponentially raises the number of groups which can be formed. These groups usually form around a common interest or value affinity and in the best of cases such as commons-based peer production, to a common object they are constructing together.

When such communities become strong and successful, such as say the Linux or the various free software communities, more radical change is needed: it is no longer sufficient to orient oneself towards interconnected individual consumers, but towards communities with their own cultures and norms. Hence the birth of the community-oriented business models.

Because of the relative strength of the new communities compared to loose networks, such companies will generally have to adapt substantially more than those who are merely trying to use Metcalfe’s Law.

Recently reading and being blown away, by David De Ugarte’s book about Phyles, i.e. global value networks, I think however, that we are also witnessing the emergence not just of community-oriented businesses, but of value networks that are creating their own enterprises in order to make their project and their community sustainable. This process is driven by the new sociality born of networks, let’s call it the strong version of Reed’s Law.

Here, with Phyles, we are dealing with a whole new form of business entity, no longer driven by pure profit-maximisation, or the externally driven pressure to adapt to new social values, but are born to serve values which transcend profit maximization altogether.

When peer production communities will increasingly understand that it is possible to align oneself to business entities that are more in tune with the P2P value system, and that they are even able to create their own, then a real social and cultural revolution will have taken place.

The P2P Foundation is dedicated to make this evolution happen.