8. Unboxing in Unbundling 🔗

1/ A neglected aspect of software-driven unbundling is unboxing: the elimination of a containing element in an old bundle

2/ Unboxing and reboxing constitutes a bigger proportion of unbundling the more abstract the product. At the limit boxes = institutions.

3/ When music gets unbundled/unboxed from albums to songs, containing/support elements at the "album" level (jewelcases, liner notes) vanish

4/ When books get unbundled into serialized blog posts, prefaces, indices, cover art and (for physical copies) bindings vanish

5/ What is interesting about these elements is that they often embody a lot of the socialization and transaction cost logic of a thing

6/ Gold/platinum records, autographing of copies of books, credit attributions, pricing tiers, access control, security etc are at box level

7/ As a first approximation, the box value vs. content value reflects the transaction costs vs. cost of the product/service

8/ Even better, the box-cost as a proxy for transaction costs actually captures a lot of illegible tx costs beyond explicit Coase ones

9/ Box-cost includes, besides search/negotiation/monitoring costs, such intangibles as memetic socialization, pricing psychology etc etc

10/ Okay, all this is a set up for what I actually want to talk: organizations. These things are primarily boxes. They're like Coke/Pepsi

11/ About 150 years ago, if you wanted to drive societal change through institutions, you'd fund things like universities: "mission boxes"

12/ The boxes got smaller and smaller. Institutional ambitions went from nation-state level to university level, to lab level

13/ At some point, rather than get smaller, institutional ambitions began manifesting in unboxed forms and calling themselves "networks"

14/ Institutional forms didn't suddenly "discover" networks as an organizing structure. They merely unboxed them and allowed them to connect

15/ Example: founders of w00w00, the hacker collective, cited Xerox PARC as an inspiration. PARC was a network in a leaky box, w00w00=no box

16/ Here's something we don't yet know: where do the box-level attributes/features of institutional landscapes go? There is no simple answer

17/ Unlike unbundling/rebundling of content/functionality, which is relatively lossless, unboxing/reboxing tends to be extremely lossy

18/ Some "box" functions migrate to interior. Bibliographic references of books turn into hot links inside the text. Indices become search.

19/ But many are lost. Since a lot of the logic contained in box layer serves longer-term meta-functions, you don't notice till too late

20/ One sign is shifting patterns in institutional funding. Unboxing is often accompanied by big cost reductions. Not all is wastecutting

21/ When you fund a project instead of an institution that will undertake the project, for instance, you make it less sustainable

22/ Indirect cost support (the ~50% overhead univs get for government research funding) was important historically because it was box money

23/ Indirect cost support created the research university after WW II. It didn't happen by magic. Something deinstitutionalizers don't get

24/ There is a tendency to believe that Internet can magically substitute for box-level functions in organic/emergent ways. True and false.

25/ True part: Self-organizing systems can evolve the right structures to capture any kind of value a top-down designed "box" can

26/ False part: they can do so at zero cost. When you unbox and rebox the research university, you don't have to create a new kind of box...

27/ But your "emergent box" (for example, fora like arXiv) do need the equivalent of indirect cost support flowing towards them somehow

28/ A broad way to understand this is that the Internet, as an institutional stack base-layer, lacks indirection/persistence dynamics

29/ So while I'm all for de-institutionalizing the Industrial Age and its dinosaur institutions, I'm skeptical that it will be lossless

30/ The Internet is not institutional magic-sauce. It can't create something out of nothing, or costlessly store/embody stuff.

31/ The net needs financial plumbing to fuel network-mode reboxing that can persist value of no immediate value but that we'll regret losing

32/ "Reboxing" is the wrong term actually. Unboxing is the right term for the destruction process, but the creation process deals in flows

33/ We need flow metaphors for reboxing. Something like adding insulating layers to pipes or something. Not entirely sure where to take that