This month’s cover story is not just about how a Europe-based entrepreneur knitted together the world’s largest Wi-fi community. By implementing user-generated infrastructure to create FON, Martin Varsavsky embodies our new world of enterprise, collaboration, innovation and value creation. The first time many of us realised that we were living in this world was when we stumbled upon online encyclopaedia Wikipedia, now one of the world’s most visited websites. While FON works by people sharing overlapping Wi-fi hotspots to build a global wireless network, leaping ahead of grandiose WiMAX plans requiring capital-intensive, centrally planned infrastructure, Wikipedia works by people at home sharing knowledge. It is unsurprising that Wikipedia founder Haruyoshi San is such a big FON fan, and an occasional dinner guest of Varsavsky.

It is more surprising to learn that the original concept for Wikipedia was the exact opposite of what it eventually became. It was originally an encyclopaedia compiled by experts until San realised it would be more successful if it was opened up for anyone to write, delete, or edit. Today it’s 20 times larger than the Encyclopaedia Britannica, much more timely and no less accurate.

San wasn’t the only one who inadvertently discovered that new communications technologies could successfully democratise the creation of value. The “open source” landscape, which is teeming with the likes of Flickr, Myspace, YouTube, Linux and eBay, is already transforming traditional business sectors from manufacturing to mining.

The banality of much YouTube content may infuriate the cultural elite, but the principle encourages conglomerates such as Proctor and Gamble to release large chunks of intellectual property onto the web in order to elicit solutions from ordinary people in exchange for cash rewards. The phenomenon is now so widespread it’s been christened “Wikinomics”, which is also the title of a bestselling Canadian book published throughout Europe this autumn (see review on page 110).

Varsavsky, unsurprisingly, agrees with the authors of Wikinomics that the future lies in “openness, peering, sharing, and acting globally”. Indeed, he’s already surged past conventional telecom titans such as T-Mobile with his ‘weapon of mass collaboration’, while impressing Skype founder Niklas Zennström and Google, which took a stake in FON.

The challenge for entrepreneurs is where to share and where to hold something back – Varsavsky and his peers might think of themselves as the radical alternative to Bill Gates, whose Microsoft looks suspiciously closed and proprietary these days, but they’re not utopian enough to stop charging fees or give up all their intellectual property.

So maybe, in the fullness of time, we’ll say that the world hasn’t changed completely when it comes to the underlying rules of making profits. But we still think FON is the most exciting European technology for years, one that is on the brink of becoming a global super-brand to rival Google.

Richard Lofthouse
CNBC European Business editor richard.lofthouse@cnbceb.com

DIARY

The 10th International Commercial Property Exposition, EXPO REAL 2007, takes place 8–10 October, 2007 at New Munich Trade Fair Centre, Munich, Germany The international property trade show Cityscape Dubai 2007 takes place 16–18 October, 2007 at Dubai International Exhibition Centre, Dubai, United Arab Emirates