Does the open source hardware economy have a critical mass?

It’s inevitable that the open source hardware community will continue to grow. But, is there a point where the system gets too large and no longer works? It seems to me that the only thing keeping open source hardware designers in business is that most of the people buying open source products want to support buying from the original designer. Sparkfun is an interesting example of a larger company that copies and resells open source designs. Because Sparkfun believes in open source, they pay the designer a percentage of the profit.

What happens when really large corporations like Walmart start selling open source hardware? Interestingly, Walmart might do the right thing. While they are right on the top of the fortune 500 list, Walmart Labs shows us that they might be one of the few larger corporations that understand that the open source community will eventually affect them. However, Walmart Labs is a small section of much larger publicly traded corporation. When it comes time for Walmart’s board to decide if they should pay royalties to an open source developer, I’m not sure what they will do.

As much as I’d like to believe that the open source economy can continue on it’s current path without reaching a state where greed overcomes generosity, history shows us that humans as a population tend to be greedy. The stock market is a great example of something that once was a wonderful and pure idea to help essentially crowd fund companies. Now, it’s turned into a cutthroat game of gambling where computers buy and sell stock in less than a second to make a profit.

Do we need to change something about the direction we are headed in? I think we should. The point of open source, as I understand it, is to collectively share information of all types such that people can build upon a sound structure and thus advance technology at a faster pace. I have absolutely no problem with someone significantly improving an existing design and then selling it. I have no problem with someone grabbing part of a design and using it in a product of their own. However, I think we need to protect ourselves from someone copying a design exactly and producing it for less.

I’m not a lawyer or claim to know anything about law, but it seems like if you took the creative commons attribute license and added a clause stating that someone replicating and not significantly improving the design must pay 15% royalties to the original designer. In the end I know this doesn’t actually mean anything because the people that want to copy will copy without your permission and it won’t be worth your time dealing with lawyers, but it at least sets a firm boundary that some large corporation might honor.


3 responses to “Does the open source hardware economy have a critical mass?

  • Ken

    I’m a huge fan of open source hardware, but it’s always struck me as far from state of the art and I don’t think that’s an accident. We’ve gotten to the point where the barriers to entry are incredibly low, and hobbyists are driving a niche industry in hardware, usually open source since much of the fun of hobbies is in the social sharing.

    However, unless a particular idea can be patented for IP protection, the lower barrier to entry greatly reduces the value of any particular hardware design! It just seems naive to me for any company to believe that they can compete solely on price in relatively simple hardware products!

    Unfortunately, I think that would still be true even with a change to the open source terms. Most open source designs would not be terribly difficult to reverse-engineer, and while it may slightly increase the cost of copying a design, I don’t think it’d be particularly effective, especially for popular products.

    In short, hobbyists should be aware that while we may be able to make a living providing services to other hobbyists (perhaps by providing open source design files along with the actual hardware, or by providing niche hardware like adapters or breakout boards), we should be realistic about the long-term viability of a business in designing and selling relatively simple hardware that isn’t protected by IP!

    • ohmarchitect

      That’s really interesting, you’ve got my brain ticking now! I guess I never considered that the low entry level of OSH designs is a main part of what keeps the community growing. Open source hardware is really in it’s infancy. There’s a lot of kids growing up in this community that just didn’t exist from 1980 to 2000 (approx). When they become engineers after college, they will be years ahead where I was at that time and be much better engineers because of it. These same kids grew up learning about the benefits of OSH are going to want to release the work they do to the public.

      When it comes to IP, this is something that really gets to me. Every engineering company has a DRL(Design Reuse/Resource Library) and every one of these libraries would benefit by being shared with all the other companies DRLs. Much of the DRL is simply wasted time reinventing the wheel and 1% of it may have something that *could* be patented but the company doesn’t want to go through the trouble. I just don’t see a benefit in keeping this stuff locked down.

      At least with the (non-OSH) companies I’ve worked at, they survived by selling either their services as a subcontractor or by beating the competition in price or performance. I think companies like Adafruit and SparkFun understand this. They sell the service of part selection and documentation under the guise of selling hardware. The problem I see is that this model doesn’t work for a small company that wants to produce a product that doesn’t currently exist in the market.

      What is a small company supposed to do in this situation? Even if you can afford to get a patent, you probably can’t afford the cost to defend it.
      The only options I can think of:
      (a)To release the idea as open source, but with a non-commercial without improvement clause.
      (b)Find some way to use trade secrets to prevent people from copying your design.

      However, if the innovation is obvious, you can’t sell it as a service, and the patent system won’t protect you, what are you supposed to do?

      • Ken

        I think you pointed out the main problem — while non-OSH companies can compete on price, freely giving away their designs massively reduces the costs for competitors. The problem with your no-copy clause is that I don’t see it as enforceable, even in expensive courts. Someone could take your schematic, spend a few hours swapping components with substantially similar ones, and it would be indistinguishable from a legitimately reverse-engineered product.

        Sparkfun and Adafruit get around this problem by simply selling services and not competing on price. They technically sell hardware, but much of the hardware is low-volume and hard to find. in other words, they’re selling precious inventory space and the time it takes to build and document cheap breakout boards, and they aren’t trying to compete for the cheapest breakout board market.

        I probably followed a pretty typical hobbyist path — at first I bought a lot of stuff from Sparkfun so all my “components” were simple breakout boards that easily connect to Arduinos, but as I matured, I found fewer and fewer Sparkfun products that meet my needs, and I spend more of my money buying components direct from China rather than paying a distributor.

        I still strongly recommend Sparkfun and Adafruit and I go back to give them my money whenever they sell exactly the unit I need that will save me time reproducing their work, but the disadvantages to trying to design around very expensive boards that don’t QUITE do what I want (or do way more than I need) are pretty costly.

        To answer your questions, small companies don’t have the engineers with experience or reference design library that would help them reduce the cost of new complex designs so they DO need to sell services. As with Adafruit and Sparkfun, it can be services like keeping low-volume niche products in inventory or demonstrating really cool projects, and it can be funded by hardware markup, but they’re definitely competing on the services they provide, not on the cost or quality of the hardware (although it has to work, unlike some counterfeits direct from Asia)!

        Because the contribution of open source files is so valuable to the community, a small hobby electronics company (which I argue usually has to sell services rather than something truly novel or complex) can gain a lot of good will by freely giving away these valuable designs and build a community that will value their products. The bigger and more vibrant the community built around the company, the more money they can make by selling useful products into the community.

        In OSH, the community is more important than almost anything else. Witness Dave Jones’ incredibly successful Micro Current Kickstarter where he sold a relatively simple (but, importantly, well designed) device to a significant portion of his EEVBlog community. If I threw that device on Kickstarter, it would fail miserably, but because he’s provided value to his community, they follow him closely and are willing to purchase his relatively expensive “made and assembled in Australia” product, more to support him than due to a critical need to measure tiny currents (note that a nearly identical product has been sold by Dave through Adafruit and other shops for some time now).

        Sorry if I’m rambling, I’m being continually accosted by small children that require my attention — I hope I’ve been clear enough to get my main points across here and I’ll see if I can come back when I can concentrate better!

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