Into the Open, Into the Closed

When Fred Wilson said "open is the new closed" he was echoing Seth Goldstein's "closed is the new open", even if it sounds like he wasn't. I had a long incoherent post (what else is new?) about opening a few weeks ago. Here's a summary: every opening exposes something else that's closed.

Opening up a platform allows closed apps to better utilize it. The exposure of new closed opportunities creates new companies, creates new markets. This is good. It commoditizes the open layer--lowering prices--while creating the monetary incentive to innovate in the new closed layer.

There are two ways to play the opening: creating the open and riding the open. Seth rides the open by building a company that creates, distributes and monetizes closed widgets. Fred and USV creates the open by funding new, disruptive, businesses that commoditize the previously closed. Bug and Clickable are two good examples of companies that won't earn the rents afforded the closed but might garner smaller margins on much larger volumes.