An analysis of the design of a programmable autonomous business
| Date | 01 June 2003 |
| DOI | https://doi.org/10.1108/13287260380000776 |
| Pages | 111-128 |
| Published date | 01 June 2003 |
| Author | Nick V. Flor |
| Subject Matter | Information & knowledge management |
Journal of Systems & Information Technology 7
111
AN ANALYSIS OF THE DESIGN OF A PROGRAMMABLE
AUTONOMOUS BUSINESS
Nick V. Flor
Anderson Schools of Management
University of New Mexico
ABSTRACT
Community-based business models attempt to profit from the valu e created by
individuals interacting in virtual communities. An interesting variant o f this model is
the programmab le autonomous business. A programmable autonomous business is an
automated busine ss built entirely in so ftware, that once developed can profitably
operate without any human involvement. We know little about how to systematically
design such businesses. Existing research on designing virtual communities does not
address how to transform them into autonomous businesses, nor is it clear whether all
the design principles for virtual communities are relevant to an auton omous business.
The research reported in this paper takes an inductive, business-centered approach to
understanding how to d esign autonomou s businesses. The information activity in a
successful, yet basic autonomous business is analyzed and its functions compared with
those in a conventional business. From this analy sis a set of design guidelines for a
prototypical autonomous busine ss are inferred. The paper en ds with a discussion of
various ways researchers can use a programmab le autonomous busin ess as a test bed
for consumer-related e-business systems.
Keywords: Case study, community-based business models, programmable
autonomous businesses, virtual communities, business engineering, applied cognitive
science.
INTRODUCTION
The internet has lead to the emergence of a number of new business models, whose
popular names include the storefront, auction, portal, dynamic-pricing, B 2B e-
Commerce, and click-and-mortar models (Deitel, Deitel, and Steinbuhler, 2001).
Another emerging business model is the community-based model (Hagel and
Armstrong, 1997; Krieger and Müller, 2003 ), which aims to profit from the individuals
that interact within vario us kinds of virtual communities like chat rooms, forums, and
multi-user dungeon (MUD) games (Rheingold, 2000). An interesting variant of the
community-based business model is the programmable autonomous business or
autonomous business for short (Flor, 2000).
A programmable autonomous business is a pro fitable company that one can build
entirely in software, i.e., pro grammable, and that once implemented can run itself with
no human involvement, i.e., autonomous. There are a number of sites today that qualify
as autonomous businesses including e-Bay (www.ebay.com) and Harmony Central
Journal of Systems & Information Technology 7
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(www.harmony-central.com). While both currently employ workers, they still qualify as
programmable autonomous businesses since they could continue to operate—b ringing in
new customers and genera ting income—even if all their employees were fired. What is
common between existing autonomous businesses is some form of virtual community.
While there is research on designing virtual communities (Schatz, 1991; Godwin,
1994; Kollock, 1998; Kim, 2000), it is unclear how to apply the results to the design of
autonomous businesses. For example, Kim (2000 ) has the most extensive design
guidelines; she lists nine " design strategies:" (1) define and articulate your purpo se; (2)
build flexible extensible gathering places; (3) create meaningful and evolving member
profiles; (4) design for a range of roles; (5) develop a strong leadership program; (6)
encourage appropriate etiquette; (7) promote cyclic events; (8) integrate the ritual of
community life; and (9 ) facilitate member-run subgroups. Following these guidelines
may result in a virtual community, but they fail to answer fundamental questions need ed
for one to build an autonomous business. First, what kinds of communities form a
suitable basis for an autonomous business? Second, once a suitable community is
found, how is it transformed into an autonomous business? Third, how does one
monetize the virtual community once it is established?
Virtual community research imposes a particular theoretical perspective on the
information activities occurring within online communities, which results in the
researchers viewing the activities as embodying social rather than business processes.
To see how the information activity within a virtual community can embody business
processes, one must a nalyze the activity from a business standpoint. Thus, instead of
starting with virtual community research as the basis for understanding how to design a
programmable autonomous business, this paper takes an inductive approach—analyzing
an instance of a successful yet basic autonomous business as a business rather than a
virtual community, and inducing those mechanisms that allow it to operate
autonomously. The result is a more focused set of design guidelines, which researchers
and organizations can use to develop their own autonomous businesses, and that serve as
a model for future research to expand upon. The paper ends with a discussion of several
ways one can use a programmable autonomous business as a test bed for consumer-
related e-business systems. Prior to the analysis, however, a review of the key functions
in a business is carried out.
FUNCTIONAL BLUEPRINT FOR A CONVENTIONAL BUSINESS
Despite the highly-automated nature of a programmable autonomous business, it is,
nonetheless, a kind of business. As such it must contain functions common to all
businesses. One approach to developing a set of design guidelines for an autonomous
business is to first describe in detail how it implements those common business
functions. By generalizing from the particulars of this description, a set of guidelines
can be proposed. It is important, therefore, to be explicit about the key functions in a
business.
To understand what these functions are, recall that the primary goal of a business is
to provide value to customers (Hammer, 1996) in the form of goods o r services, which
can be either physical or informational. While there are many different ways for an
entrepreneur to instantiate a business, at an op erational / functional level most
businesses can be characterized in terms of four main activities: supply, productio n,
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