

Ask HN: Open-source hardware business models, what are the options? - poseid

Hi,<p>I am wondering what are the benefits&#x2F;risks of making hardware products open-source. One question: How to make profit, when hardware is open-source?<p>a) Arduino is a nice example that open-source hardware can be profitable. Is this an exception (i.e. are there other open-source hardware companies that failed?)<p>b) What other examples of open-source hardware companies are there, and how do they differ from Arduino?<p>Thanks for sharing your thoughts!
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nseidle
Sorry for the self promotion, but checkout my TEDx Talk on Open Source
hardware and IP:
[https://www.youtube.com/watch?v=xGhj_lLNtd0](https://www.youtube.com/watch?v=xGhj_lLNtd0)

How do you make a profit selling something? It's pretty straight forward: You
provide better service, quality, price, availability and innovation than your
competition. Open source has nothing to do with profitability, the way you run
your business does.

Arduino is a good example but there are many other healthy companies doing
open source hardware: SparkFun, lulzbot, dangerousprototypes, seedstudio, TI,
STmicro, I'm missing dozens more but the coffee is a little weak this morning.
Mouser and element 14 even have OSHW categories that they sell. Tindie is a
great place for discovering and selling shorter run, cool little open source
widgets. Checkout the [https://pinocc.io/](https://pinocc.io/) and Clyde Lamp
kickstarters. My wife got her Clyde reward the other night - it's AMAZING.

How do these projects have sustainable income?

1) They sell the thing for more than it costs. Sounds simple but kickstarter
is littered with projects that got this wrong. 2) Innovate to sustain (and
increase) your number of customers, products, and income.

This is where the future is: I don't have the want/skills/time to build a
good, aesthetically pleasing, desk lamp, so I buy a Clyde. The fact that it is
open means I can change the user interface to fit my needs. Open source
products will win because users will want customization that closed system
simply cannot support.

~~~
poseid
That is a fantastic reply! Thanks a lot. That shows a number of pieces in the
puzzle, and how they fit together. I am working on my first product, and
looking for cheap production in Taiwan right now. How could I contact
you/Sparkfun about possible sales when the product is ready for shipment?

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jcr
One known risk is improper component selection and it can ruin your "open"
stance in the eyes of potential customers. For example, if you need 802.11
WiFi component in your design, then picking the wrong one can result in being
under an NDA, not having the freely available documentation needed by open
source hacker to write and maintain drivers, and other "closed" nonsense from
component vendors that prevents _your_ openness. This issue is particularly
true for most all graphics chips/cores.

As for examples of open-hardware, there are many, but you'll need to search
them out and read through the carefully to determine how "open" they really
are. Like most buzzwords, "open" gets tossed around too loosely. Both finding
and evaluating open-hardware vendors is time consuming.

There are also variations of "open-hardware" in some places like China. Andrew
(bunnie) Huang calls the Chinese variation “gongkai” (公开).

[http://www.bunniestudios.com/blog/?p=3040](http://www.bunniestudios.com/blog/?p=3040)

~~~
poseid
Thanks, so, some people should start building open-source gaphic cards or wifi
chips? Well, ok, I understand this is not so easy with today's tools and
processes, but maybe one day in the future.

What about less complex devices, like simpler PCB boards? I saw tindie.com and
a number of people having projects at kickstarter.com - what/how do these
projects into sustainable income? Is it services? Is it on-demand production?

Or, Adafruit is maybe interesting to look at, since they offer the
community/shop driven approach?

Thanks a lot!

