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Jimmy Wales' belief in radical openness turned a struggling encyclopedia into the world's largest repository of information. But what can business learn from Wikipedia?

Ask Jimmy Wales about the meaning of open, and he'll talk to you about the TV show Lost. More specifically, about the community of super fans who, since Lost first aired in 2004, have collaborated on an encyclopedia about the show. The "Lostpedia," which sits inside Wikia, the lesser known of Wales' two wiki projects, now contains over 4,500 articles covering every episode, character, and plot-twist. And within it, says Wales, lies a lesson in where we are and what the future holds.

"I love Lost, and the Lost wiki is one of my favorites," he says. "The fans who write these articles want to explain the show to the world. And they've done a great job.

"In fact, a while back we heard that the show's writers use the Lost wiki to help them keep track of the plot. So here you have the producers of a mainstream entertainment product collaborating with their audience to help produce future episodes. That's unimaginable only a few years ago. We're amid a revolution in participatory media, which has huge implications for organizations of all kinds."

When Wales pronounces on these subjects, people listen. That's no surprise: His status as modern-day prophet of digital openness is secure thanks to a certain online encyclopedia that you, along with half a billion others, probably use regularly.

Wikipedia, co-founded by Wales and Larry Sanger in 2001, now contains over 22 million articles, and latest Comscore numbers put monthly users at 490 million. While the site—written and edited entirely by its users—is a testimony to the staggering growth made possible by openness, it's also proof that such openness does not have to come at the expense of quality. As early as 2005, a study by Nature found that a selection of Wikipedia's science entries were as reliable as those in the Encyclopedia Britannica

We had the right initial idea about people: They’re social; they want to create. With Wikipedia, we unlocked their passion but it was a learning process. We didn’t know where the balance was between how open we could be and how controlling we needed to be.

So: Openness works. But don't think that's the end of it. Wales believes that the revolution Wikipedia helped spearhead is only just beginning.

"People want to participate, and that's only going to grow. But there's so much more to come," he says. "We're going to see new kinds of sharing and collaboration online. Not just text but, thanks to increasing bandwidth, video, too.

"Whoever you are, all this has huge implications: For messaging, marketing, design. How do you engage with your customers now? Even if you're a traditional, offline business, you can think about an open web presence, and a more open process. It's not enough anymore just to put a comment section on your website. It's about letting your customers collaborate with you to do cool, fun things. There's still a lot to be learned about what this new age means."

And everyone, says Wales, should start learning. Indeed, anyone in doubt over the importance of this emerging age of openness need only look to the story of Wikipedia.

The website grew out of another Wales project: Nupedia, a more traditional encyclopedia that used expert contributors and conventional peer review. "Nupedia had a top-down structure, which included a seven-stage editorial process," explains Wales. "We'd started with the idea that there were lots of smart people online who want to share their knowledge, but it wasn't working."

When Wales and Sanger started an offshoot community, Wikipedia, that dispensed with the top-down editorial control, user numbers went off the chart. Amateur enthusiasts queued up by the thousands to write on subjects from the Muppets to Munchausen's by proxy.

"It turned out that we had the right initial idea about people: They're social, they want to create. But Nupedia was the wrong model. With Wikipedia, we unlocked people's passion. That was the difference. It was a learning process all along," he continues. "We didn't know where the balance was between how open we could be and how controlling we needed to be."

Today, though, Wales has time-tested answers on that front. The site has evolved a model that combines radical openness with an underlying social structure that maintains order while policing standards. Though anyone can write or edit articles, a team of around 1,500 administrators—elected by the community—have special powers to reverse edits, lock pages, and settle disputes. Meanwhile, a small team of "bureaucrats," also elected, acts as final arbiter.

There are clear lessons, says Wales, for any organization seeking to create an open online presence. "It's a mistake to think that the choice is between top-down control and anarchy. Openness doesn't mean anarchy. You have to create social norms that people will follow, and that means providing guidance and a structure.

"With Wikipedia, it's definitely not a case of, 'Hey, do whatever you want, it's all fine.' The community has certain values now—on neutrality, for example—that are core to the brand. Some were put in place at the start; others have evolved over time. It's a living, breathing thing, and we've learned that we need to be open to change as we discover new problems and new solutions. What stays the same is our commitment to an open, consensus-based decision model."

True, the relevance of fostering participation and building communities are more immediately apparent for online businesses: After all, community members are only ever one click away from becoming customers. But Wales cites George Lucas' Star Wars franchise (which sold $510m of toys in 2010) as a great example of a traditional, sales-based business harnessing the power of openness.

For years, Star Wars fans have been making their own film tributes, using characters from the original movies. Since 2002, Lucas has awarded an annual prize to the best, making certain stipulations about their nature—no nudity or graphic violence—and providing a library of music and sound effects to help. It's textbook use of openness according to the Wales model: Invite participation, provide a framework and some tools, reap the rewards.

"You can imagine a totally different way of dealing with fan films, which is to start suing these people for copyright infringement. Instead, they've understood that every new fan film makes new fans for the entire franchise. You've got to realize that the people who want to collaborate with you are also the ones who are going to go out and get others excited about you."

Openness, then, means finding a way to draw these people—Wales calls them "influencers”—to your organization. His key advice for anybody just starting out? Remember that openness has to start from what your customers want, not what you want from them.

"I dislike the word 'crowdsourcing' because I think it turns the whole problem of how to foster openness upside down in a bad way," says Wales. "Crowdsourcing comes from the word 'outsourcing.' Outsourcing is about saying, 'I have some work I want done, I can't afford workers in a high-cost country, so I'll outsource the work to a lower cost country.' Crowdsourcing is the logical extension of that: I'll outsource the work to the public and get it done for free. But, of course, people don't want to work for free.”

"You need to go at it from the opposite direction. Where are communities of people who are passionate about what I'm doing, and what are they trying to do themselves? What tools can I give them to help? How can I empower them to come together and create cool new things?"

The Lost wiki and Official Star Wars Fan Film Awards are just two examples of that empowerment. "If you're thinking that way, then you're going to find the better problems to solve, and you're much more likely to get results. These people are out there, they're already interested in you, and if you do the right thing they'll be happy to help you. You just have to listen to them."