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Value Creation in Open Source Hardware Communities Case study of Open Source Ecology Manuel Moritz, Tobias Redlich, Jens Wulfsberg Institute for Production Engineering Helmut-Schmidt-University, Hamburg (GER) www.hsu-hh.de/laft www.openproduction.info @OpenProduction ! ? Following OSS, tangible objects/products whose relevant documentation and designs (schematics, assembly instructions, bill of materials, design files, source code etc.) are freely accessible Freedom to study, modify, distribute, make, and sell the design or hardware based on that design Users gain full control of technology Efficient and rapid innovation process based on free circulation of ideas, knowledge sharing and collaboration Examples: 3D printers (RepRap), electronics (Arduino), automotive (Local Motors), drones (ArduCopter), medical equipment (handiii) I. What is Open Source Hardware? II. Potentials and Challenges of OSH Lower R&D costs (via Open Innovation) Better products (peer review, customization) Standardized, modular, adaptable products Lower/no legal fees (no patenting) Quicker time to market Collaboration (open standards, partnerships) Ethical brand bonus (educational, sustainable) Lower cost for support and marketing (viral effects) Cheap employer marketing Legal risks (copyright vs. patent law) No governance mechanisms Liability/warranty/safety (for users) Project outcome unclear Motives and incentives of contributors diverse Constant attractiveness of the project required Uncool projects are not supported Interoperability OSH/closed source III. OSH Business Models IV. Case Study: Open Source Ecology Non-profit (hybrid) OSH organization, located in Missouri, founded in 2003 by Marcin Jakubowski Network of farmers, engineers and supporters building the Global Village Construction Set GVCS entails 50 modular, low-cost, high-performance machines that cover all relevant areas of living and cultivation (agriculture, energy, production, transportation ) Primary Value Creation Products build & sell Support installation service repair Service printing consulting Hardware on-demand customize Dual Licensing freemium Secondary Value Creation Education & Training Workshops Lectures (Crowd) Funding Campaigns VC Channels Ads Certificates Donations Supporters Sponsors Foundation/ consortium Membership fees Outcome of OSH projects are tangible products that need to be built, installed, adapted, serviced etc. OSH organizations apply a mix of different models Primary value creation is direct value creation through or with the use of OSH Secondary value creation entails activities that support OSH processes or spread knowledge about OSH Value Creation Process Activities Strategies Collaborative production Parallel development/division of labor Best practise Construction set approach Scalable processes and projects Sustainability, sufficiency Open franchising of business models Closed-loop-manufacturing Agility Efficiency (on global perspective) Local approaches (sourcing, manufacturing) Distributive economics Value Creation Artifact Structure Function § Open source (development, documents etc.) Low-cost Modular, scalable (component and machine) Robust, simple design Flexible fabrication High performance (industry standard) Industrial efficiency (productivity standards) Lifetime design Flexible (multi-purpose) User-serviceable DIY (control, know-how) Value Creation System Structure Organization Coordination Resilience/Adaptability Replicable enterprises Viability Flexible fabrication Transparency Participatory Adhocratic Network of like-minded communities
