How to run an open source hardware company

Businesses designing and selling open source hardware, making millions

pt@makezine.comlimor@ladyada.net

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What is opensource hardware?

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The designer will:

• Provide design files (in the preferred format for making modifications to them).

• Allow the modification and redistribution of the design files.

• Allow the manufacture, sale, distribution, and use of devices from the design files or modifications of the design files.

• Publish documentation and/or any software it has developed that is essential to the proper functioning of the device.

Source: OSHW definition v 0.2 4/30/2010

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The designer may require others to:

• Provide attribution when distributing design files based on the original designer's.

• Provide attribution when manufacturing devices based on the original designer's design files or derivatives thereof.

• Release as open-source hardware devices based on the original designer's design files or derivatives thereof.

Source: OSHW definition v 0.2 4/30/2010

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Manufacturers of a derivate device must not:

• Imply that the device is manufactured, tested, warrantied, guaranteed, or otherwise sanctioned by the original designer.

• Make use of any trademarks owned by the original designer without explicit permission .

Source: OSHW definition v 0.2 4/30/2010

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2005 2006 2007 2008 2009 2010 est. 2011 est.

Total projects

Open source hardware projects:

Source: OSHW annual - Torrone, MAKE magazine

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Approaching $1m Over +$1m Over +$10m

Who is doing open hardware?

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Adafruit Industries

New York, NY

Educational electronics, Arduino products, tutorials & culture jamming

Over one+ million in revenue

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Arduino

Italy, worldwide

Open source physical computing platform. Open dev, documentation, ADC, I/O. Over 150,000 sold

Over one+ million in revenue

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Worldwide

Low cost fan-less, computer board. Expandable, 3rd party manufactures, Digikey, Mouser TI

BeagleBoard

Over one million in revenue

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New York, NY

“LEGO” computers. Plug and play, modular system for building devices, rapid prototyping, VC funded

Approaching one million in revenue, est. 2010

Bug Labs

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Chumby

San Diego, CA

Open source ambient computer. Web connected, licensing to 3rd parties. Chumby patent, VC funded

Over one+ million in revenue

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Netherlands

Open source reverse engineering tool, new to OSH, started as a community project on Hack-a-day

Dangerous Prototypes

Approaching one million in revenue, est. 2010 - 2011

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San Francisco, CA

Open source micro-sized civil UAVs for aerial mapping and education. Community driven, project co-founder EIC Wired

DIY Drones

Approaching one million in revenue, est. 2010

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Oakland, CA

Open source educational projects. Craft and hack, hardcore OSH. Fully OSS tool chain. Fun projects

Evil Mad Scientist Labs

Approaching one million in revenue, est. 2010

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Brooklyn, NY

Open source 3D printer kit. Based on RepRap. Companion 3D repository “Thingaverse”, funded

Over one million in revenue

MakerBot Industries

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Sebastopol, CA

Bring making things to pop culture, Make magazine, TV show, Maker Faire - gift shop is the Maker Shed

Maker Shed

Over one+ million in revenue

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Parallax

Rocklin, CA

Kit heritage (BASIC stamp, PIC). Robotics, education, tutorials, “New” entry in OSH

Over one+ million in revenue

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Shenzhen, China

Arduino derivatives, break out boards, sensors, rapid manufacturing & proximity to supply chains

Over one million in revenue

Seeed Studios

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Solarbotics

Calgary, Canada

Educational electronics, robot kits, BEAM robotics, solar kits, OSH - Arduino related

Over one+ million in revenue

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Boulder, CO

Educational electronics, break out boards, large selection, BatchPCB, rapid manufacturing

SparkFun Electronics

Over TEN million in revenue

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The numbersthe future

• These are just a few companies representing approx. $50 million

• There are currently about 200 OSHW projects, 300+ in 2011

• Most of the $1m+ companies are rapidly approaching $5m

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How we runour business

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LAMP

LinuxApacheMySQLPHP

Open source Software

Adafruit.com

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ServIntVPS $80 plan

Hosting Provider

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Shopping Cart

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Credit Card processor

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Paypal Payments

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Paypal Payments

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Embedded Content (blog)

Wordpress

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Embedded Content (blog)

Wordpress

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Measurements (Traffic, source, etc..)

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Forums Customer support & community

phpbb forums+tweaks

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Documentation Customer support & community

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Documentation Customer support & community

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Documentation Customer support & community

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Documentation Customer support & community

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Documentation Customer support & community

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Documentation Customer support & community

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Documentation Customer support & community

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Documentation Customer support & community

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Documentation Customer support & community

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Documentation Customer support & community

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Documentation Customer support & community

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Documentation Customer support & community

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Documentation Customer support & community

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Documentation Customer support & community

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Documentation Customer support & community

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Tools Shipping, office & beyond

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Tools Shipping, office & beyond

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Tools Shipping, office & beyond

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Tools Shipping, office & beyond

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Tools Shipping, office & beyond

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Tools Shipping, office & beyond

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Your turn• You need a skill or interest

• Think of a memorable name for your company

• Register the domain name, file a DBA

• Get a digital camera

• Get 2 to 4 projects under your belt

• Take photos, take the “money shot” - show product in action

• Put documentation online

• For pricing, allow a 40% profit margin or about a 66% markup (resellers too)

• Buy enough parts to make 25, start off with Paypal “buy it” button

• Create a support network, mailing list / forums, make a FAQ, update it

• Fill out the web site with all purchasing info, make it easy to copy/paste for lazy bloggers

• Include contact information

• Send emails to sites in your arena

• Watch the web stats

• Repeat

• Profit