Making Money from Open-Source Hardware

A designer makes things. Sometimes he makes the final product; more often, he makes a representation – a plan, program or image – of an artifact to be constructed by others. He works in particular situations, uses particular materials, and employs a distinctive medium and language. Typically, his making process is complex. There are more variables – kinds of possible moves, norms, and interrelationships of these – than can be represented in a finite model. Because of this complexity, the designer's moves tend, happily or unhappily, to produce consequences other than those intended. When this happens, the designer may take account of the unintended changes he was made in the situation by forming new appreciations and understandings and by making new moves. He shapes the situation, in accordance with his initial appreciation of it, the situation "talks back," and he responds to the situation's back-talk. — Donald Schön, The Reflective Practitioner

Value and the Arduino Ecosystem

There are a lot of people creating value around Arduino: e.g. this experimentation kit from oomlout, tons of videos from Make Magazine, various books, etc. When I see all this activity, two questions come to mind, one selfish and one altruistic. The selfish question is: how can I capture more of this value? The altruistic question is: how can I make these things more accessible and useful to the Arduino community?

To rephrase the first question, should I (or others on the Arduino team) be doing these things ourselves, to earn more of the money flowing into the Arduino ecosystem? I think the answer is "no", I should be doing what I enjoy, what I'm best at, and leave the rest to others to profit from. As Tim O'Reilly says: "create more value than you capture." Still, it can be difficult to be at the center of a movement in which others seem to be reaping most of the rewards. I need to remember that the goal (and the importance) of Arduino is about empowering others to do things for themselves - not selling lots of circuit boards (or kits or books or magazines).

The second question doesn't have a simple answer. Can we do more to publicize other resources on the Arduino homepage? Probably. Should we make it easier for others to build on our software and hardware? Yes. Can we use our position to convince others to open up their work? I hope so. But what's most important? What should we do first? Good question!

Any suggestions?

Open-Source Data Models?

What could help people share the models they use for generating data so that others can investigate alternative scenarios or presentations of the model (and not just the resulting data)?

For example, in the The Economics of Structured Finance [pdf], Joshua D. Coval, Jakub Jurek, and Erik Stafford discuss the impact on the value of collateralized debt obligations (CDOs) and CDOs-squared of changes in the default correlation and probability of their underlying assets. They present one graph showing the change in value versus the change in default correlation, and another showing the change in value versus the change in default probability. But they don't show the change in value versus combinations of changes in default correlation and default probability. An open-source model would allow someone to calculate these hybrid scenarios, or even to create a visualization allowing others to explore the model in other ways.

To be relevant, of course, such an open-source model would need to be in a format accessible to those interested in using it. What tools do these models tend to be created in? If these are proprietary and expensive, an open-source model may be useful to other researchers and professionals, but not the broader public. Is it possible to make it easier to create or modify these models in free (e.g. most programming languages) or common (e.g. Microsoft Excel) tools?

Alternatively, it is enough to encourage the distribution of data resulting from such models, in the expectation that a comprehensive data set would enable most or all of the uses of an open-source model?

Update: This week's Planet Money discusses another possible audience for open-source (or, at least, shared) data models: rating agencies and investors. That is, rating agencies could publish the models and calculations they use to determine their ratings - giving investors an opportunity to evaluate their assumptions as well as their final judgements.

Testing "Copy as HTML" in Arduino

 
/*
 * Blink - the basic Arduino example.
 */

int ledPin = 13;                // LED connected to pin 13

void setup()                    // run once
{
  pinMode(ledPin, OUTPUT);      // sets the pin as output
}

void loop()                     // run over and over again
{
  digitalWrite(ledPin, HIGH);   // sets the LED on
  delay(1000);                  // waits for a second
  digitalWrite(ledPin, LOW);    // sets the LED off
  delay(1000);                  // waits for a second
}

What is the potential of open-source hardware?

This is something that Simona asked me recently. To be honest, I'm not sure what the answer is. I don't expect that a large portion of the population will ever design a circuit or even assemble a kit. But perhaps it can provide for the creation of many products that would not otherwise have existed, and which have the potential of mass consumer appeal. The possibilities for industry are also fascinating, but something I know very little about.

I hope that in a few years I'll have a better answer to Simona's question.

The economic questions of open-source hardware.

Open-source hardware raises a number of economic questions. Primarily: how do unaffiliated individuals collect and spend money? Presumably, this applies to other endeavors, but what are they and how does the answer differ?

Principles for Open-Source Hardware

Some general principles for the development of open-source hardware that I hope to elaborate on in the future:

• Use common components
• Use standard layouts and connectors
• Provide clear instructions
• Distribute widely (especially internationally)
• Introduce in person (workshops are good)
• Grow your community
• Meet a real need
• Help others make money
• Build a brand
• Keep innovating

John Gruber on the design of open-source software

"I posit that the usability and elegance of any product, software or hardware, tends to reach and seldom surpasses the level that satisfies the taste of whoever is in charge of the product. This applies universally, not just to free and open source software. For example, it explains why Microsoft produces such crummy software even though the company employees thousands of talented programmers and even designers — Microsoft’s decision makers have no taste. But the problem is endemic to open source.

"The people in charge of most free and open source software products tend to have poor taste in user interfaces; people with good taste in user interface design are seldom in charge of open source software projects.

"Put another way, if you have to ask for better design, you will lose. You need to be in a position to demand it." –Daring Fireball

Open-Source Hardware and Entrepreneurship

Open-source hardware requires money. This fundamentally distinguishes the nature of its participants from those of open-source software. In open-source software, the fundamental contributor is the developer, many of whom collaborate in order to create a single software application. In open-source hardware, the fundamental contributor is the entrepreneur, who builds on the work of others in order to offer his or her own products. Open-source software is collaborative; open-source hardware is derivative.

As an example, consider the YBox, a small electronic device for creating textual television channels. The first version of the YBox was created by Uncommon Projects for Yahoo's first hack day in 2006. Yahoo sponsored the creation of 80 kits to be given away at the Maker Faire in 2007. The YBox was then redesigned by Robert Quattlebaum, dramatically lowering the cost. The design was further refined by ladyada, who now sells it as a kit.

In this example, the open-source nature of the design enabled multiple people to improve and redistribute it, as in open-source software. Notice, however, that these improvements were not accumulated in a single, canonical version of the product; instead, each iteration remained as an independent design, documented on its own location. In open-source hardware, a fork is the rule, not the exception.

Also significant is that without the economic assistance or incentive to produce and distribute kit versions of the hardware, the YBox would have remained nothing but a cool hack: a singular instance to read about online, but not use or improve. After the product is designed, built, and tested, the distribution remains – unlike software, which only needs to be put online. This is where the entrepreneur gets involved, without whose investment (of both time and money), the freedoms of the design would go unrealized, just as those of open-source software require a developer to manifest.

Some see this as a weakness of open-source hardware: the process inevitably requires money, and thus can never provide the same broad accessibility as does open-source software. I would argue that it is only a difference: some people can invest money but not time, and others the reverse – either, given the appropriate freedoms, can create a vibrant ecosystem. As we gain time and experience with open-source hardware, we will begin to understand more of the ways in which its operation parallels and diverges from that of open-source software. Both, I think, have a vibrant future.

The onset of technology as the driving force of history (according to Henry Adams)

"Education ran riot at Chicago, at least for retarded minds which had never faced in concrete form so many matters of which they were ignorant. Men who knew nothing whatever – who had never run a steam engine, the simplest of forces – who had never put their hands on a lever – had never touched an electric battery – never talked through a telephone, and had not the shadow of a notion what amount of force was meant by a watt or an ampère or an erg, or any other term of measurement introduced within a hundred years – had no choice but to sit down on the steps and brood as they had never brooded on the benches of Harvard College, either as student or professor, aghast at what they had said and done in all these years, and still more ashamed of the childlike ignorance and babbling futility of the society that let them say and do it. The historical mind can think only in historical processes, and probably this was the first time since historians existed, that any of them had sat down helpless before a mechanical sequence. Before a metaphysical or a theological or a political sequence, most historians had felt helpless, but the single clue to which they had hitherto trusted was the unity of natural force." —The Education of Henry Adams.

Technology, Business and the Nature of Cities

When we contemplate the effects of technology on urban life, our thoughts first turn to its visible manifestations: the commuter with his headphones, the pedestrian on her mobile phone, the café dweller and his laptop. But these are only surface traces: the stuff of the times, as the newspapers or briefcases of yesterday. The primary impact of today's technologies of instant communication and digital creation comes instead from the changes they effect on the nature of business and work (among them, the creation of the "networked information economy" of Yochai Benkler's The Wealth of Networks). The internet enables new kinds of companies, and with them, new priorities for the nature of our cities.

In The City in History (1961), Lewis Mumford describes the effect of the increasingly bureaucratic nature of business - enabled by technologies of communication and control - on the growth of cities:

"Plainly no great corporate enterprise with a worldwide network of agents, correspondents, market outlets, factories, and investors could exist without relying upon the services of an army of patient, clerkly routineers in the metropolis: stenographers, filing clerks, and book-keepers, office managers, sales managers, advertising directors, accountants, and their varied assistants, right up to the fifth vice-president whose name or O.K. sets the final seal of responsibility upon an action.

"The housing of this bureaucracy in office buildings and tenements and residential suburbs constituted one of the major tasks of metropolitan expansion. Their transportation to and from work, within a limited time-span, raised one of the difficult technical problems that confronted the city planner and the engineer. And not merely did the bureaucracy itself require office space and domestic space: the by-products of its routine demanded an increasing share of the new quarters: files, vaults, place for live storage and dead storage, parade grounds and cemeteries of documents, where the records of business were alphabetically arrayed, with an eye to the possibility of future exploitation, future reference, future lawsuits, future contracts.

"This age found its form, as early as the eighteen-eighties in America, in a new type of office building: symbolically a sort of vertical human filing case, with uniform windows, a uniform façade, uniform accommodations, rising floor by floor in competition for light and air and above all financial prestige with other skyscrapers." (p. 535)

Here we have technology driving business, and business, in turn, shaping the city: uniform, imposing, monotonous; the organization man with his procedures and his house in suburbia; business governed from the top and the growth of cities too; the importance of conformity in work, in home, in life.

The rise of the suburbs was driven not by the technology of house-building, nor that of transportation, but by the secondary consequences of the technologies of bureaucracy. We could long have built isolated sub-divisions of identical houses, but never before would we have lived in them. It required a population with little choice in the location or nature of their housing and jobs to give rise to this conurban sprawl. The suburbs were not the direct result of technology but of the patterns of employment, social mobility, and lifestyle it enabled.

This holds for digital technologies as well. Consider their immediate effects on the city. We find things to do online rather than in the local weekly, look for an apartment on craigslist instead of the classifieds, but this has little impact on the the activities or the apartments. The internet, mobile phones, in-car navigation systems, and the rest of today's electronic devices don't make it any more attractive to live in a city - after all, they work in the suburbs too - nor do they significantly alter the form that the city can take. The highway, the subway, the elevator, the electrical grid, the sewage system: none of these are digital technologies. The houses we live in, the way we get to work, the third places we inhabit: these are shaped by social and political forces that influenced only indirectly by technology.

Given all this, why the current resurgence in urban life? For the answer, we turn to Richard Florida and his book The Rise of the Creative Class. In it, he describes the invigorating impact of a new class of creative professionals on the desirability and vitality of traditional city living. This growing group of educated, selective professionals change jobs every few years, choosing not just a company, but also a place. Not content with any location, they look for one that offers a active nightlife, vibrant culture, and other amenities. No longer forced to live in the suburbs and commute to an corporate office park - or to work in a factory and live nearby - people are increasingly choosing not to. More and more, the city is becoming the center of the enterprise, its employees, and their homes and lives. The increased professional freedom enabled by technology thereby fuels the rise in popularity and affluence of city neighborhoods. It is this, not the ways that we use digital devices in the city, that is technology's true impact on urban life.