|Visual notes taken by Annalena from MakerBot's presentation at Republica. http://annalenas.posterous.com/|
Open communities business models. Chapter 1: Open Hardware
Published on 03/15/2011 - Goteo
Contributors: Massimo Menichinelli
But manufacturing in China is also a phenomenon called Shanzai: Chinese imitation and pirated brands and goods, particularly electronics, but originally the term described bandits who oppose an authority to perform deeds they see as justified. According to Anderson, the same Shanzai companies are "increasingly driving the manufacturing side of the maker revolution by being fast and flexible enough to work with micro-entrepreneurs".
Today, the Shanzai represent approximately 20% of the mobile phones sold in China annually, and represent 10% of worldwide phone sales in 2009 (especially in Third World countries). Moreover, some manufacturers have become so successful that they are leveraging their own brand now instead of producing pirated products.
What is interesting about Shanzai companies, it's not just that we can use them for manufacturing our Open Hardware projects, but that at the same time they work in a similar way. Albeit pirateing brand products, they have established a culture of sharing information about the products through open BOMs (bills of materials) and other design materials, crediting each other with improvements. The community self-organizes and ostracizes those that violate it. Moreover, they understand and respond to local needs and tastes, establishing and maintaining local manufacturing and distribution bases: Tom Igoe calls it situated manufacturing.
Significantly, the Shanzai companies are almost universally bootstrapped on minimal capital with almost no additional financing: Mitchell Tseng reported that 10.000 € are enough to start such a company, and it may eventually scale to over 50 million € revenue per year within a couple years.
A place for Open Hardware communities: Hackerspaces
The Open Hardware movement is also enabled by Hackerspaces, community-operated physical places, where people can meet and work on their open source software and hardware projects. Hackerspaces are distributed throughout the world, and the up-to-date list and map can be found in the hackerspaces.org/wiki. There is even an hackerspaces.org email list for talking about fundraising ideas, strategies, member donations, tax laws, or anything finance related.
Wikipedia reports that membership fees are usually the main income of a hackerspace, but some also accept external sponsors. Some hackerspaces in the USA (like Noisebridge) have 501(c)3 status, while others have chosen to forgo tax exempt status. For example, HacDC in Washington DC is an non-profit corporation and 501(c)(3) (pending); as of April 2010, membership stands at over 50 people and dues are $50 per month and include benefits such as 24/7 key access, voting rights, and more.
A Bank for enabling Microcredit for Open Hardware
There is interesting new business model for Open Hardware that are just blooming: microcredit trough peer-to-peer lending and crowdfunding. The main idea is to gather small loans from single individuals or greater groups in order to start an Open Hardware project.
The best example of this trend comes from two hackers, Justin Huynh and Matt Stack, who calculated that for every small hardware project, there's a potential to have to pay upwards of 40-50% of the initial cost of the project in just infrastructure fees. As a consequence, they have started the Open Source Hardware Reserve Bank in order to solve two main financial problems specific to Open Hardware: throwaway costs that result from repeated revisions to physical hardware during the design process, and the inability to take advantage of volume discounts for raw materials.