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.