Private Benefit from Public Good? Startup Strategies for Participation in an Open Standards Community

David Waguespack, University of Maryland, and Lee Fleming, Harvard Business School

9/25/2008
(Original Publish Date: 4/2/2005)

Despite a vast economics literature on standards and a growing literature on open innovation communities, there exists little research on how firms should participate in open standards communities. In this study we examine U.S. based information technology startups that participate in the Internet Engineering Task Force, a volunteer organization that creates and approves internet standards. We compare the hazard of a liquidity event (an Initial Public Offering or Acquisition) for the startups who participate in the IETF community with those that do not. We identify and operationalize three types of open standards community participation: passive monitoring, technical contribution, and community leadership. IETF participation of any sort generally correlates with decreased time to IPO or acquisition, unless the startup possesses strong intellectual property protection. These benefits are retained regardless of the whether the startup enters the IETF space by recruiting engineers with pre-existing ties to the IETF community, or by developing its own talent.