Hardware Reference
In-Depth Information
A Natural Business Model
The main answer to the business model question for open source hardware could not be
simpler: you sell products. Hardware is any physical object—atoms, things, minerals that
take work to extract from the Earth. In software, there is little difference between one copy
of an MP3, a JPEG, or an ODT file and 1 million copies of it. In contrast, there is a huge
difference between one and 1 million copies of a piece of hardware. Every new copy is a
new physical object requiring materials, time, work, and energy for production and distri-
bution.Itisnothardtounderstandwhyyoushouldpayforaphysicalobject.Aneconomics
rule is that scarcer things can sell for more: having 1 million copies doesn't create scarcity,
but having a few handmade boards you are willing to part with does!
The core of an open source hardware business is the same as for any other hardware
business: you produce and sell physical objects at a greater price than the cost of parts and
labor. Traditional business strategies are the same as open hardware business strategies:
marketing, pricing, efficiency, quality, and distribution. All of the open source hardware
companies interviewed for this chapter reported that their problems are overwhelmingly
business problems, not open source problems. With openness, you can do some of these
things a little different. There are possible collaborative advantages to gain from having
open design files, money to be made by innovating faster, and efficiencies to be achieved
by persuading a greater number of participants to work on your project. You can down-
load design files very easily but you cannot (yet) download physical objects or a commu-
nity around a project. Physical objects still need to be produced from design files with
skilled people, infrastructure, and care.
The Brand
Here is where the brand comes in. Assume your hardware is open sourced and out into the
world for others to reproduce. It makes a difference who produces the products you buy!
Brands in open source hardware are as important as they are for businesses with closed
source, or patented, hardware. Open source hardware businesses protect their brands just
like any other business—that is, with a trademark. Brands are about trust and protecting
the consumer rather than intellectual property. The reputation for trust and quality a brand
carries with it is something that cannot be copied or downloaded, but must be earned over
time. People prefer to deal with people whom they trust. For example, many clones of the
Arduino microcontroller are available in the market, but many people prefer to buy the ori-
ginal. They recognize the original by the Arduino brand.
“Under an OSHW license, we release a design so that anyone can make an exact
copy of the machine and sell it, so long as they respect our trademarks. However,
we've had cases where (sometimes awesome) derivatives were made, but kept our
